Refinance

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mtowncyclone13

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Just a heads' up the refinance rates now are really low. I've tried to refinance a few times and it was never low enough to make sense for us but this week I locked in a 2.6% 15 year rate with no points and only $1,300 in closing costs. It raises my monthly cost by $6 and saves about $22,000 in interest.

I was talking to my dad about it and he said "Even if you decide to move or lose your job the worst that could happen is you're down that $1,300." That sealed the deal for us.

Anyway, great rates out there now.
 

ArgentCy

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Be prepared to wait. I'm needing a vacation. Just remember people that house prices are generally inversely proportional to these interest rates. Great when they manipulate rates down, but that can't last forever.
 

mtowncyclone13

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Be prepared to wait. I'm needing a vacation. Just remember people that house prices are generally inversely proportional to these interest rates. Great when they manipulate rates down, but that can't last forever.
what does this have to do with refinancing? I was paying $935/month and now I'll be paying about $941/month for a superior rate. what am I waiting for?
 
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ArgentCy

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what does this have to do with refinancing? I was paying $935/month and now I'll be paying about $941/month for a superior rate. what am I waiting for?
It will take you a while to close because everyone is doing the same thing, or at least trying.
 

Sigmapolis

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do you think refinancing is throwing money away? I come out ahead refinancing every time when compared to paying extra on my existing loan. I did about 5 calculations to decide this.
If the calculator says it is better for you to refinance (adjusting for fees and the time and effort annoyances of doing it, of course), then go for it.

My point was less about you and more about the Fed throwing money out the window and buyers gleefully throwing it all back into housing --

upload_2020-7-17_14-50-59.png

At a larger scale (the red line is mine) --

upload_2020-7-17_14-52-41.png

It is like we have not learned anything or something.

Housing prices grew with incomes from the 1940s through 2000, then we had a bubble, then it deflated, and now we have another one going.
 

ArgentCy

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No refinancing is fine. If you can get the bank to agree and make the loans.

But I think people should keep this is mind...

A house with a mortgage of 4% 30 year loan (10% down payment) on a $350,000 house. P&I is $1,503 / month

If you lower the rate to 3% that same P&I of $1,503 would buy approximately $396,000 house. So the so-called value of the home has increased 13%. The market will take time to adjust but that is a big contributor to the market value increases.

If rates suddenly increased to 5% then that same $396,000 house could drop to $311,000 (>20% drop).
 

SayMyName

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Pretty Green State is not doing refis at the moment as they dont have the capacity.
Any good leads on who does have capacity (and competitive rates / fees)? My current loan servicer proactively contacted me with their "VIP" no-cost refi offer for existing customers - 3.375% APR on a conforming 30-yr. Even their 15-yr was above 3%!

Yeah...think I'll shop that around. Thanks, but no thanks.
 

ArgentCy

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Jan 13, 2010
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Any good leads on who does have capacity (and competitive rates / fees)? My current loan servicer proactively contacted me with their "VIP" no-cost refi offer for existing customers - 3.375% APR on a conforming 30-yr. Even their 15-yr was above 3%!

Yeah...think I'll shop that around. Thanks, but no thanks.
The rates will tell you how bad they want to make the loans. The banks are in no hurry to lose money or potentially sit on a <3% loan for 30 years.
 

mtowncyclone13

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No refinancing is fine. If you can get the bank to agree and make the loans.

But I think people should keep this is mind...

A house with a mortgage of 4% 30 year loan (10% down payment) on a $350,000 house. P&I is $1,503 / month

If you lower the rate to 3% that same P&I of $1,503 would buy approximately $396,000 house. So the so-called value of the home has increased 13%. The market will take time to adjust but that is a big contributor to the market value increases.

If rates suddenly increased to 5% then that same $396,000 house could drop to $311,000 (>20% drop).
my house was bought for about 200k with 28% down. I did not buy the max I could afford nor do I see my house as anything other than a necessary roof - I compare everything I do to what renting might cost and base my net worth on things other than housing. I understand what you are saying and don't understand those who put every penny they have into an illiquid asset. I used to pay extra on the mortgage and with this new rate I will not unless I come into some money.
 

LeaningCy

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Jan 18, 2008
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Any good leads on who does have capacity (and competitive rates / fees)? My current loan servicer proactively contacted me with their "VIP" no-cost refi offer for existing customers - 3.375% APR on a conforming 30-yr. Even their 15-yr was above 3%!

Yeah...think I'll shop that around. Thanks, but no thanks.
We just refinanced with Triumph Mortgage about a month ago and got 3% on a 25-year. Rate was the same for 30 year, might be even better now. Everything went according to plan and we even closed about a week ahead of schedule.

https://www.triumphhomeloans.com/
 

Sigmapolis

Minister of Economy
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Aug 10, 2011
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Washington, DC
No refinancing is fine. If you can get the bank to agree and make the loans.

But I think people should keep this is mind...

A house with a mortgage of 4% 30 year loan (10% down payment) on a $350,000 house. P&I is $1,503 / month

If you lower the rate to 3% that same P&I of $1,503 would buy approximately $396,000 house. So the so-called value of the home has increased 13%. The market will take time to adjust but that is a big contributor to the market value increases.

If rates suddenly increased to 5% then that same $396,000 house could drop to $311,000 (>20% drop).
The exact same logic is a primary reason college has gotten so expensive.

We made it easier to finance in a couple of different ways, so the holder of the "principal" (i.e., the schools) increased their prices to the point they collected much of the windfall that we intended to go to students. It was a good system (for them).

Instances of this are common across the economy.
 

SpokaneCY

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my house was bought for about 200k with 28% down. I did not buy the max I could afford nor do I see my house as anything other than a necessary roof - I compare everything I do to what renting might cost and base my net worth on things other than housing. I understand what you are saying and don't understand those who put every penny they have into an illiquid asset. I used to pay extra on the mortgage and with this new rate I will not unless I come into some money.
Ditto on the extra mortgage payment (for my personal circumstances anyway). I'll not rob my 6% pocket to pay my 3% pocket...
 
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