Wells Fargo customers - ReFi Mortgage w/ no closing costs ** Edit ** Still warm, but cooling off

[kalipoo2000]

thanks - filled out the forms, response said will contact me with in 2 to 4 days. looks like 5.375% for 30 year. drops my interest a little.

 

[kassaam]

Anyone try this recently and get better than 5.375% for 30 year fixed? I just got my 'Truth in Lending' statement from Wells that I have to return.

 

[FieldTek]

Well, I guess it doesn't work for VA loans. After filling in the 1st page and submitting it, it says I'm not eligible. I was going to try and drop mine below 5% too....

 

[papaschtroumpf]

Got my final "close at home" paperwork today, will get the signatures notirized tomorrow at work (we have a Notary Public on staff) then I'll ship them the paperwork back in the prepaid envelope provided and voila! shaved 0.5% off my mortgage (I did this last yeat already so the difference in rate is pretty minor but I'm down to 5.275% on 30year).
Maybe I could find something cheaper but I'm busy, and getting 0.5% off in 30 minutes of total work is just up my alley.

 

[KATX]

Originally posted by: kassaam
Anyone try this recently and get better than 5.375% for 30 year fixed? I just got my 'Truth in Lending' statement from Wells that I have to return.

If this is a no closing cost option, jump on it. The best I can find with zero or almost no closing cost is 5.75.

Good for you.

 

[JetsFanatic]

Thanx

 

[kof]

If you are any way related to a member or employee of the US Navy they have kick butt rates.
Monday they were 4.125% w/ 0 points for a 15 year 20% down, they have since jumped to 4.5%.
http://www.navyfcu.org/

 

[dr wily]

just got back from vacation and we got our big packet, nice.. gotta get that notarized.

 

[fdisk2003]

Be careful about these types of loans. Sometimes, "no closing costs" means no costs incurred with the lender. But you *might* still be liable for other costs such as appraisals, title insurance etc. Make sure Citibank is paying for all these third part expenses before you jump on this.
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Also, if your comparison shopping, sometimes no closing costs means that they'll just roll them into the loan for you. So, no out of pocket cost at the time, but you pay for it over time.

---------------

ok question

is the wells fargo loan link..
1. paying for all these 3rd party expenses?
2. just rolling them into the loan?
3. is there a pmi or not? i have been at my current location about 1.5 yrs, and are paying pmi
4. can we pay off early, or pay extra monthly towards the principal?

thanks

 

[Cocophone]

My question for anybody that has done this is:

Did you loan balance go up by more than the interest amount for the payments not paid during the time from the old loan until the new loan payments start.

If its really no costs then you loan balance should go up only for the interest payments you miss.

==Cocophone==

 

[KATX]

Originally posted by: fdisk2003
Be careful about these types of loans. Sometimes, "no closing costs" means no costs incurred with the lender. But you *might* still be liable for other costs such as appraisals, title insurance etc. Make sure Citibank is paying for all these third part expenses before you jump on this.
--------------------------------------------------------------------------------



Also, if your comparison shopping, sometimes no closing costs means that they'll just roll them into the loan for you. So, no out of pocket cost at the time, but you pay for it over time.

---------------

ok question

is the wells fargo loan link..
1. paying for all these 3rd party expenses?
2. just rolling them into the loan?
3. is there a pmi or not? i have been at my current location about 1.5 yrs, and are paying pmi
4. can we pay off early, or pay extra monthly towards the principal?

thanks

And the above two nightmarish scenarios (1) still having cost to others such as appraisers, ad (2) adding the closing cost to the loan and hiding it from the borrower, would the APR be identical to the simple interest rate?

I do not think so.

The APR disclosure is your friend.

 

[KATX]

Originally posted by: Cocophone
My question for anybody that has done this is:

Did you loan balance go up by more than the interest amount for the payments not paid during the time from the old loan until the new loan payments start.

If its really no costs then you loan balance should go up only for the interest payments you miss.

==Cocophone==

Well, not quite. It depends whether your old escrow balance is given to you immediately (credited to your old lean pay off amount immediately) or later. If the former, then your loan amount also increase by the amount of your new needed escrow amount or you have to pay the same upfront.

 

[Devistater]

I'll have to let my parents know about this. They did it already last year, maybe thier interest will go down even more.

 

[will792]

Originally posted by: PHL1365

Originally posted by: kassaam
Superhot, this will be my 3rd time taking advantage of this 'Rate Reduction Refinance' offer from Wells Fargo. I went from 6.625% -> 6.00% -> 5.75% and now, 5.375%. This refi is a nobrainer, no out of pocket and a very competitive rate. Check out this refi calculator and plug in the numbers to compare this product with loans that have fees but lower rates. You may be surprised how long it might take to actually start saving money by taking the loan with less interest. Cheers!

Very good observations. One other thing to keep in mind, closing costs are not tax deductible, IIRC. And if you pay points to get a lower rate, the points are deductible , but they must be amortized over the entire length of the loan (for refi's). Thus, if you sell the house in five years, lets say, you never get to deduct most of the cost of the points.

Granted, this doesn't amount to a huge amount of money, but certainly something to consider when you're calculating the cost/benefits of points vs. no points and traditional refi's vs. no cost refi's.

Unless you're rock-solid certain that you will keep your home for the time it takes to recoup the cost of refinancing, no-cost refi's with a slightly higher interest rate is the way to go. It's that old "bird-in-hand" thing.

It is not entirely correct. The points on refinancing are amortized over the life of the loan BUT if the loan is closed due to other refinancing or selling a house the remaining amount is deductible immediatly. I used this Wells Fargo no-cost refinancing last year and TurboTax put the remaining balance of refinancing points in the deductible interest amount. I did not verify this information with IRS booklets since I trust TurboTax. If they screwed up they would have many unhappy customers.

Will

 

[dr wily]

our new loan amt is about 600$ more than the balance on our bank statement (3/2/2004) , and it states that for a month we wont make a house payment i think, so im assuming thats the interest and such that we arent paying for that month and adding it on to the new loan? The monthly loan amt is still the same 60$ less than my current one just like they quoted on the website...

 

[Dogbertt]

Doh when I punched it in this time it went for 6% to 5.5%...no 5.375 for me

Owell still sent out for it...$60 less a month for no work on my side is easy math.

 

[Vic]

Originally posted by: KATX

Originally posted by: Cocophone
My question for anybody that has done this is:

Did you loan balance go up by more than the interest amount for the payments not paid during the time from the old loan until the new loan payments start.

If its really no costs then you loan balance should go up only for the interest payments you miss.

==Cocophone==

Well, not quite. It depends whether your old escrow balance is given to you immediately (credited to your old lean pay off amount immediately) or later. If the former, then your loan amount also increase by the amount of your new needed escrow amount or you have to pay the same upfront.

Correct. "No Cost" loans never include recurring closing costs, i.e. your property tax and homeowners insurance impounds.


*Lock Today*. In fact, you should have locked yesterday.


edit: I hope some of you people who are only saving $60/mo. realize that you are re-amortizing your loan. For example, let's assume that you have monthly P&I payments of $1,000 and that you have paid on your existing 30 year loan for 24 months (2 years) already. You save $60 per month with your new loan, bringing your new payment down to $940, but you are adding 2 years back onto your loan going back to 30 years. Saving $60 per month saves you $20,160 over the next 28 years, but adding on those 24 more months of $940 will cost you $22,560 (this monthly savings that becomes a long-term loss is known as the "banker's secret"). In addition, the $60 off your monthly payment is all interest, meaning that your mortgage interest tax deduction will be $720 less in the 1st year of your mortgage alone. Assuming a low 15% tax bracket, that means you'll pay about $108 more in taxes next year.

You might want to re-think that "easy math".

 

[papaschtroumpf]

Originally posted by: Cocophone
My question for anybody that has done this is:

Did you loan balance go up by more than the interest amount for the payments not paid during the time from the old loan until the new loan payments start.

If its really no costs then you loan balance should go up only for the interest payments you miss.

==Cocophone==

No the balance did no go up. This really is as "no cost" as it gets. No tricks. (This is the second time I do this, down to 5.375% on a 30-year).

In addition, if you currently pay PMI (private mortgage insurance), it get waved.

Jump on it if you can, you may find something better if you look hard, but this is well worth 1/2h of your time, and that's litterally all it takes!

 

[Dogbertt]

Edit: I hope some of you people who are only saving $60/mo. realize that you are re-amortizing your loan.

Yes I am only saving $60 but I do not intend to lower my payment. So that's $60 toward P of my P&I and less 'I' I pay every month. I'm not extending my loan but I am shortening my time with it. The Wells Fargo loan has no Pre Pay or Catches (Unless they added it I will keep a look out). FYI I refi-d about 9 months ago so this is even a better deal for me.

Just wish I had got to 5.375 rate.

 

[faststangerragtopman]

Only problem I have with this is that Wells Fargo will not handle my home loans because I have both homes in my revocable living trust. I now I can take it out of the trust and put it right back in after the paperwork flurry subsides but why should I? Others refi me without that hassle! Wells Fargo needs to grow up and change that outmoded policy!!

 

[PHL1365]

Originally posted by: Dogbertt

Edit: I hope some of you people who are only saving $60/mo. realize that you are re-amortizing your loan.

Yes I am only saving $60 but I do not intend to lower my payment. So that's $60 toward P of my P&I and less 'I' I pay every month. I'm not extending my loan but I am shortening my time with it. The Wells Fargo loan has no Pre Pay or Catches (Unless they added it I will keep a look out). FYI I refi-d about 9 months ago so this is even a better deal for me.

Ditto. My wife and I argued over this. I finally convinced her that if we did the refi, AND CONTINUED TO MAKE THE SAME MONTHLY PAYMENT EVERY MONTH THAT WE ARE ALREADY PAYING, that we would pay off the loan about 6 months earlier (than our current mortgage). This amounts to about a $7000 savings over 15 years.

Plus, if you ever do run into financial difficulty, you can fall back to the lower payments for however long you need.

 

[KATX]

edit: I hope some of you people who are only saving $60/mo. realize that you are re-amortizing your loan. For example, let's assume that you have monthly P&I payments of $1,000 and that you have paid on your existing 30 year loan for 24 months (2 years) already. You save $60 per month with your new loan, bringing your new payment down to $940, but you are adding 2 years back onto your loan going back to 30 years. Saving $60 per month saves you $20,160 over the next 28 years, but adding on those 24 more months of $940 will cost you $22,560 (this monthly savings that becomes a long-term loss is known as the "banker's secret"). In addition, the $60 off your monthly payment is all interest, meaning that your mortgage interest tax deduction will be $720 less in the 1st year of your mortgage alone. Assuming a low 15% tax bracket, that means you'll pay about $108 more in taxes next year.

You might want to re-think that "easy math".

Well, I agree with your math but not quite with your conclusions.

1. In your example the person can increase their payments on their own just enough to cause the mortgage to last only 28 years.

2. I do not believe this so called "banker's secret". You seem to imply that bankers prefer a 30 year mortgage over a 28 year one when both have the same interest rate. If this were true, interest rates for 30 year mortgages would have been lower than those for 15 year mortgages. But they are not.

3. Losing interest deduction when your rate goes down is like your income taxes increasing when you get a raise. But no one rejects a raise.

 

[Vic]

Originally posted by: KATX
Well, I agree with your math but not quite with your conclusions.

1. In your example the person can increase their payments on their own just enough to cause the mortgage to last only 28 years.

2. I do not believe this so called "banker's secret". You seem to imply that bankers prefer a 30 year mortgage over a 28 year one when both have the same interest rate. If this were true, interest rates for 30 year mortgages would have been lower than those for 15 year mortgages. But they are not.

3. Losing interest deduction when your rate goes down is like your income taxes increasing when you get a raise. But no one rejects a raise.

1. True. Or ideally even shorter. But most people don't do such a thing voluntarily. Others may find out that the rate improvement was so slight, that the only real benefit of the refinance was the reamortization.

2. Risk exposure, pimple-popper. While 30 years are more profitable, they're also more risky. Simple rule of finance, junior high-schooler.

3. No, mortgage interest is a deductible expense, not income. Different rules apply then when calculating taxes.

 

[KevinH]

Originally posted by: Vic

Originally posted by: KATX

Originally posted by: Cocophone
My question for anybody that has done this is:

Did you loan balance go up by more than the interest amount for the payments not paid during the time from the old loan until the new loan payments start.

If its really no costs then you loan balance should go up only for the interest payments you miss.

==Cocophone==

Well, not quite. It depends whether your old escrow balance is given to you immediately (credited to your old lean pay off amount immediately) or later. If the former, then your loan amount also increase by the amount of your new needed escrow amount or you have to pay the same upfront.

Correct. "No Cost" loans never include recurring closing costs, i.e. your property tax and homeowners insurance impounds.


*Lock Today*. In fact, you should have locked yesterday.

Definitely. The performance of the 10 year bond today just meant that rates are goint to take a dump (hopefully not for long). Anyone floating their loans hoping to squeeze out another eight may have lost the rate they were hoping for.

Katx- The banker's secret that you doubt isn't much of a secret. This occurs ALL the time. Vic is dead on in his assertions. He knows what he's talking about as he's been in the industry WAY longer than I have.

 

[papaschtroumpf]

Originally posted by: KATX

edit: I hope some of you people who are only saving $60/mo. realize that you are re-amortizing your loan. For example, let's assume that you have monthly P&I payments of $1,000 and that you have paid on your existing 30 year loan for 24 months (2 years) already. You save $60 per month with your new loan, bringing your new payment down to $940, but you are adding 2 years back onto your loan going back to 30 years. Saving $60 per month saves you $20,160 over the next 28 years, but adding on those 24 more months of $940 will cost you $22,560 (this monthly savings that becomes a long-term loss is known as the "banker's secret"). In addition, the $60 off your monthly payment is all interest, meaning that your mortgage interest tax deduction will be $720 less in the 1st year of your mortgage alone. Assuming a low 15% tax bracket, that means you'll pay about $108 more in taxes next year.

You might want to re-think that "easy math".

Well, I agree with your math but not quite with your conclusions.

1. In your example the person can increase their payments on their own just enough to cause the mortgage to last only 28 years.

2. I do not believe this so called "banker's secret". You seem to imply that bankers prefer a 30 year mortgage over a 28 year one when both have the same interest rate. If this were true, interest rates for 30 year mortgages would have been lower than those for 15 year mortgages. But they are not.

3. Losing interest deduction when your rate goes down is like your income taxes increasing when you get a raise. But no one rejects a raise.

Also your math assumes that you're planning on staying in the house till the mortgage is paid off, which in my line of work is unlikely.