Mortgage rates at all time low

[etrigan420]

Holy cow...

Mortgage lady called today and offered to drop us down to 3.75% on a fixed rate 30yr.

We're currently at 4.75% on a 2 YEAR OLD LOAN!!!

I haven't even done all the math yet, but our payment (*with* insurance and taxes) would go down $200/mo.

VA streamline.

I've gotta be missing something here...don't I?

 

[mshan]

Rule of Thumb to see if refi makes sense (take loan amount and divide it into $125,000. That is minimum rate reduction necessary to make refi start to make sense): http://video.cnbc.com/gallery/?video=3000050857 (video clip is from October 2011; specific rule of thumb comments start around 3 minute mark)

Devil is always in the details, so don't assume it is great deal if she is pushing simple rate of 3.75% and you don't know what closing costs, mortgage insurance, etc. are.

Plus is she willing to give you a written rate lock without any sort of non-refundable application fee?




Don't know if you are eligible to join Navy Federal Credit Union, but they always seem to advertise very competitive rates: https://www.navyfederal.org/products-services/loans/mortgage/mortgage-rates.php

Good luck!

 

[jagec]

Holy cow...

Mortgage lady called today and offered to drop us down to 3.75% on a fixed rate 30yr.

We're currently at 4.75% on a 2 YEAR OLD LOAN!!!

I haven't even done all the math yet, but our payment (*with* insurance and taxes) would go down $200/mo.

VA streamline.

I've gotta be missing something here...don't I?

There will be some closing costs, even for a VA streamlined refinance. The VA requires 0.5% of the total loan amount as a funding fee, while the VA doesn't require an appraisal and credit report, the lender might, and other fees may also be involved.

That said, a full percentage point decrease is usually worth it within a few years.

 

[Red Squirrel]

Holy cow...

Mortgage lady called today and offered to drop us down to 3.75% on a fixed rate 30yr.

We're currently at 4.75% on a 2 YEAR OLD LOAN!!!

I haven't even done all the math yet, but our payment (*with* insurance and taxes) would go down $200/mo.

VA streamline.

I've gotta be missing something here...don't I?

Ha nice! I can't help you with the math part, but 3.75 seems normal. I got that 3ish years ago when I bought my house. Definitely a good rate!

I actually have about 16 years left on my mortgage, it was a 25 year mortgage. The biweekly and extra payments sure make a big difference.

 

[etrigan420]

Devil is always in the details, so don't assume it is great deal if she is pushing simple rate of 3.75% and you don't know what closing costs, mortgage insurance, etc. are.

Plus is she willing to give you a written rate lock without any sort of non-refundable application fee?




Don't know if you are eligible to join Navy Federal Credit Union, but they always seem to advertise very competitive rates: https://www.navyfederal.org/products-services/loans/mortgage/mortgage-rates.php

Good luck!

I just printed out the proposal...

Interest Rate: 3.750 %
Lock-in Fee: $0.00
Lock Days (#): 90

She said that we could pay for points to get down to 3.25 %, but the price seemed a little steep, and we're not sure if we're going to be in the house long enough to make "pay for points" worthwhile.

As far as shopping around. We haven't even been looking to refi. I've seen the stories here and other places about what a PITA the whole process is. This is 0 effort and/or time expended on our part, which adds to the appeal. Having said that...we *are* Navy Fed and USAA members, so maybe I'll make some phone calls...

There will be some closing costs, even for a VA streamlined refinance. The VA requires 0.5% of the total loan amount as a funding fee, while the VA doesn't require an appraisal and credit report, the lender might, and other fees may also be involved.

That said, a full percentage point decrease is usually worth it within a few years.

Good call. It looks like she rolled everything into the loan...which I'm perfectly fine with. After all of the "To's" and "From's", total closing would be less than $2k.

 

[spidey07]

That's amazing. We have a bank that will do zero cost re-fi (no, they don't roll anything into the loan) at 3.75. I just bought a house last fall at an amazing rate, tempted to re-fi already.

 

[drebo]

I just got pre-approved for an FHA loan at 3.75%.

The HomePath loan that I also just got approved for was at 4.625%, but there's no PMI on it, so the monthly payment is actually almost $200/mo less. Closing costs are also almost $3k less.

 

[GundamW]

Just closed on my condo (SoCal), 10yrs 2.875% 0pt (aimloan.com) from 15yrs 4.25%

 

[Nintendesert]

I got in at 3.5% and with the seller covering most costs the APR is in the 3.4ish range. 30 year fixed. Not too bad.

 

[Fingolfin269]

We're building and will convert the construction loan to a standard mortgage (re-fi) in a month or so. I'm hoping rates stay low and plan to go for the 20. Not comfortable with the monthly payment of the 15 but like the tables on the 20 a lot better than the 30. No PMI either.

 

[Tweak155]

Maybe I'm way off but don't the majority of your payments in the first few years cover mostly interest? If so, refinancing just gets you to pay more interest right now. I suspect they think people will sell their house before the mortgage is up and they lose out on that remaining interest from your first loan. So they are gambling it will earn them more.

If you drop the length of your mortgage, I'm sure the benefits out well outweigh the short-term spike (if any in that scenario), but if you're sticking to the same term, I'd bust out the calculator and do some math.

 

[spidey07]

Maybe I'm way off but don't the majority of your payments in the first few years cover mostly interest? If so, refinancing just gets you to pay more interest right now. I suspect they think people will sell their house before the mortgage is up and they lose out on that remaining interest from your first loan. So they are gambling it will earn them more.

If you drop the length of your mortgage, I'm sure the benefits out well outweigh the short-term spike (if any in that scenario), but if you're sticking to the same term, I'd bust out the calculator and do some math.

Look at the amortization tables of rates this low. It will blow your mind how much is going to principle, as in 35 percent of my payment is going to principle.

There is simply no reason to do a 15 year mortgage unless you want all your wealth being tied to something you can't access.

Do the math. No way in hell I'd do a 15 year mortgage. That's an emotional decision, not a financial decision.

Do the math.

 

[Rage187]

We made it into year 5 of a 15 year 5.25 before the refi to a 30 at 4.5. Payment was cut in half. Just had the first month of the new payment and it was amazing. Extra cash going to pay off credit card and then it will all go to the mortgage.nahould have the house paid off n 7 years.

 

[OCGuy]

Ignorance abound

 

[Via]

I never did follow through on any of my re-fi adventures. I think I'll just keep my current loan and start paying extra when I can.

 

[Bignate603]

Maybe I'm way off but don't the majority of your payments in the first few years cover mostly interest? If so, refinancing just gets you to pay more interest right now. I suspect they think people will sell their house before the mortgage is up and they lose out on that remaining interest from your first loan. So they are gambling it will earn them more.

If you drop the length of your mortgage, I'm sure the benefits out well outweigh the short-term spike (if any in that scenario), but if you're sticking to the same term, I'd bust out the calculator and do some math.

If you refinance you're always free (assuming no prepayment penalty, those aren't common on most normal loans) to pay more per month. If you're concerned about interest you could refinance then continue to pay the same amount each month that you used to. That would make you pay down the principal much faster.

Or you could look at getting a different term. If you have 20 years left on your current mortgage maybe you could switch to a 15 year mortgage for the same monthly payment.

 

[cbrsurfr]

Locked last week - 30 yr conventional 3.75. This is on a new purchase.

 

[Tweak155]

Look at the amortization tables of rates this low. It will blow your mind how much is going to principle, as in 35 percent of my payment is going to principle.

There is simply no reason to do a 15 year mortgage unless you want all your wealth being tied to something you can't access.

Do the math. No way in hell I'd do a 15 year mortgage. That's an emotional decision, not a financial decision.

Do the math.

Not sure what you're getting at, because I have. On a $300k loan you pay way less interest on a 15yr than you do a 30yr (over 50% less). Is there something else you're taking into consideration? Because the math is clearly in favor of the shorter term loans, and by a huge margin.

If you're not sure you're going to live there until completion of the loan, then sure, why tie up your money (leaving within 5 years or so, this makes sense).

 

[Tweak155]

If you refinance you're always free (assuming no prepayment penalty, those aren't common on most normal loans) to pay more per month. If you're concerned about interest you could refinance then continue to pay the same amount each month that you used to. That would make you pay down the principal much faster.

Or you could look at getting a different term. If you have 20 years left on your current mortgage maybe you could switch to a 15 year mortgage for the same monthly payment.

Sure, this makes sense. I'm pointing out when you jump to the lower payment and stick to it. This is usually what people look at (how much they pay per month vs how much they are spending), so the banks are... banking on this.

 

[Raghu]

*Jealous* Home loans at about 11% here

Still the prices and buying demand are ridiculous.

 

[spidey07]

Not sure what you're getting at, because I have. On a $300k loan you pay way less interest on a 15yr than you do a 30yr (over 50% less). Is there something else you're taking into consideration? Because the math is clearly in favor of the shorter term loans, and by a huge margin.

If you're not sure you're going to live there until completion of the loan, then sure, why tie up your money (leaving within 5 years or so, this makes sense).

Take the higher payment of the 15 year vs. 30 and invest it (the difference). You'd have to try really hard to not outpace 3.75%, plus it's liquid if you ever need it instead of tied to your house. So over the long term you come out with much more wealth. 100s of thousands of dollars depending on the rates and return.

 

[rcpratt]

I'm house shopping right now (first time property owner).

I got preapproved for $200k (probably could have gotten more) through USAA. I figured they would have pretty good rates, but he only offered me 4.00% with no points. He said my median credit rating is 742 (all in the 740s), and the only thing holding it down is my age (i.e., lack of credit history). Seems like I should at least be able to get the average, right?

Anyways, I guess the question is - where are good places to shop around rates? Any lenders with the lowest rates in particular?

 

[Capt Caveman]

nvm

 

[lokiju]

Maybe this is a dumb question but here it goes...

We (wife and I) have been in waiting hell for about 2 months now trying to finish up a refi through AIM Loan.

We've had an appraisal done as part of the process and it came back more favorable than we'd ever have thought possible for our area.

That said, we're about $8k to $10k upside down based on that appraisal and we get that since we don't have equity, we'll likely have to pay a higher interest rate than the lowest possible.

I'm wondering if that appraisal does me any good if I decide to shop around with other companies again since interest rates have dropped even more now and I can show a recent appraised value.

Realistically, I'm thinking no other lender cares what the appraisal I had done says and will insist on having a new one done for them, but am not 100% sure.

I will of course be pushing with Aim Loan about lowering our proposed locked interest rate to the newer lower rates.

 

[Tweak155]

Take the higher payment of the 15 year vs. 30 and invest it (the difference). You'd have to try really hard to not outpace 3.75%, plus it's liquid if you ever need it instead of tied to your house. So over the long term you come out with much more wealth. 100s of thousands of dollars depending on the rates and return.

If you're a good investor, sure there could be a substantial gain. However it isn't like you have all that money at once. The extra $400/mo (on a good transition) isn't the same as the $100k over 15 years if you got it all at once and let it build interest. I don't think you're getting that crazy difference over time like you're trying to make it out to be, although it could still balance and bring you ahead with some really good investing.

Additionally the trade-off is with a 15yr mortgage, you save that $50k without doing any additional work / money management, or risk.