Who's refinancing their mortgage?

[ebaycj]

Originally posted by: joshsquall
My lender's numbers didn't quite make sense. I'm dropping from 6.375% to 5% and my principal/interest payment is only going down a little under 10%. My calculations show it should be closer to 15%.

Your calculations are probably wrong. How did you do them?

 

[V00DOO]

Originally posted by: Ocguy31

Originally posted by: vi edit

Originally posted by: Noirish
what's the first thing to do if you want to buy a house nowadays?
is it to get pre-approved first even though you don't know what you are buying yet?
can you ask loan agent to give you the max possible based on your salary?
how much can you realistically borrow per $10k salary?

Definitely talk to a bank (or credit union if you can) to get pre-approved. Especially in this market. Lenders are really cranking the screws to what/who they will lend.

As for what you'll be approved for, it's really a matter of debt to income.

You really need to keep your debt about 1/3 or less than your gross monthly income.

Meaning, if you bank $3,000 a month gross, your debts shouldn't be more than $1000. This includes student loans, car payments, credit card debt, and the future home loan.

Fannie Mae is 55%, Freddie Mac is 65%. I would stay under 50%, but you can get it done higher.

55% to 65% of your income on the house payment? What money do you have left to spend on other essential things. No wonder we are in this big housing mess. People buying houses their income can't support.

 

[gordita]

Originally posted by: dullard

I never understand the desire for these odd term-length loans.
1) Determine how much you can afford to pay a month.
2) Find the best loan rates that you can (include interest rate, closing costs, and any pre-payment costs in this analysis).
3) If that loan has monthly payments that you can afford (see #1), then take the loan regardless of the term-length of the loan.
4) If you want to make a 30-year loan be paid faster, then make extra monthly principle payments.

For example, suppose you can afford $1200 a month in payments. Suppose you owe $100k and you want it to be a 10 year loan. Suppose the best loan you could find was a 20-year loan at 4.5% interest, meaning $633 monthly payments. Then, pay $1036 a month towards that loan and you now have a 4.5% interest 10-year loan.

You can always make a loan term shorter (assuming you didn't get a loan with a massive prepayment penalty). This gives you the flexibility to make the loan length whatever you want while still getting the best loan interest rates and fees. Also, you aren't locked into a $1036/month 10-year loan. If you run into financial trouble you can always drop back to $633 a month for a while.

This is very true.

There is one scenario where this might be a little problematic.
for example: your loan servicer makes it hard on you to make additional principal. in my case, the servicer does NOT give me the option of making free electronic add to principal payments. I have to mail in a check everytime from NY to CA. and oh btw, it must reach them between so and so dates only.
in this day and age, this is ludicrous.
in my case, i'm seriously thinking of dumping my two current mortgages into a new one from my local credit union where I have my checking/savings account.
my new note will show up right below my checking account and I can transfer anywhere from $.01 to $100k whenever I want.

 

[Gunslinger08]

Originally posted by: ebaycj

Originally posted by: joshsquall
My lender's numbers didn't quite make sense. I'm dropping from 6.375% to 5% and my principal/interest payment is only going down a little under 10%. My calculations show it should be closer to 15%.

Your calculations are probably wrong. How did you do them?

Bankrate calculator.

 

[Mojoed]

Originally posted by: Marlin1975
Yea I am looking right now. We are at 6.5%. Like to get 5.5% or lower with no money out of pocket.

have over 20% equity, me and my wife have low 800 score, been in house over a year, etc...

By no money out of pocket, do you mean FREE closing, or closing costs rolled into your mortgage?

 

[FreshPrince]

you have to make sure that your appraised value did not dip too much from what you purchased your home with. out west, I know this is very bad because some of those homes have dipped dramatically in value and it is still better off for people to abandone those loans than to refinance. it's not as bad on the east coast, but still, some property values have dipped that it may not be worth it. Now if you value has stayed the same or has risen, then you should do it, it's a no brainer.

good luck!

 

[SagaLore]

Originally posted by: radioouman
Wow. 4.75% on a 30 year fixed right now. I just refinanced in the spring, but I could drop 0.5% by refinancing again.
* digs up mortgage calculator *

Who is offering 4.75%? :shocked:

 

[Capt Caveman]

Originally posted by: Mojoed

Originally posted by: Marlin1975
Yea I am looking right now. We are at 6.5%. Like to get 5.5% or lower with no money out of pocket.

have over 20% equity, me and my wife have low 800 score, been in house over a year, etc...

By no money out of pocket, do you mean FREE closing, or closing costs rolled into your mortgage?

Refinance and take out an additional amount to cover fees. That's what I'm doing.

 

[Descartes]

Originally posted by: SagaLore

Originally posted by: radioouman
Wow. 4.75% on a 30 year fixed right now. I just refinanced in the spring, but I could drop 0.5% by refinancing again.
* digs up mortgage calculator *

Who is offering 4.75%? :shocked:

My business partner locked in at 4.75% with Regions. They offered 4.5% yesterday with no closing costs, but it was at 4.75% today.

 

[Svnla]

Ok, I just read the local newspaper and a local bank posted an ad:

4.5% 30 years fixed rate
4.86 APR
180K amount
5% down
1% original fee
0% discount
MIP


Is it good, bad, ugly? and can someone translate those in plain English?

 

[OCGuy]

Originally posted by: Svnla
Ok, I just read the local newspaper and a local bank posted an ad:

4.5% 30 years fixed rate
4.86 APR
180K amount
5% down
1% original fee
0% discount
MIP


Is it good, bad, ugly? and can someone translate those in plain English?

A 5% down deal with MI. Looks like a bait and switch to be honest. Only one I know of doing 3-5% down is FHA, and the rate isnt that low. Unless they are a portfolio lender (they actually hang on to the loan, not sell it on the open market), that isnt going to happen.

 

[CPA]

Originally posted by: dullard

Originally posted by: ironwing
That's what we're looking at. We have ten years to go so we're only looking at a ten year, no cash out refi. The problem is that not many banks do ten year notes. Plus our current 15 yr is at 5.125 so the rate has to be below roughly 4.5 to make it worth the closing costs for most loans.

I never understand the desire for these odd term-length loans.
1) Determine how much you can afford to pay a month.
2) Find the best loan rates that you can (include interest rate, closing costs, and any pre-payment costs in this analysis).
3) If that loan has monthly payments that you can afford (see #1), then take the loan regardless of the term-length of the loan.
4) If you want to make a 30-year loan be paid faster, then make extra monthly principle payments.

For example, suppose you can afford $1200 a month in payments. Suppose you owe $100k and you want it to be a 10 year loan. Suppose the best loan you could find was a 20-year loan at 4.5% interest, meaning $633 monthly payments. Then, pay $1036 a month towards that loan and you now have a 4.5% interest 10-year loan.

You can always make a loan term shorter (assuming you didn't get a loan with a massive prepayment penalty). This gives you the flexibility to make the loan length whatever you want while still getting the best loan interest rates and fees. Also, you aren't locked into a $1036/month 10-year loan. If you run into financial trouble you can always drop back to $633 a month for a while.

Studies have shown less than 5% of people with 30 year loans make extra payments. going with something shorter gives you a smaller rate plus forces the discipline of paying more.

 

[CPA]

Originally posted by: SagaLore

Originally posted by: radioouman
Wow. 4.75% on a 30 year fixed right now. I just refinanced in the spring, but I could drop 0.5% by refinancing again.
* digs up mortgage calculator *

Who is offering 4.75%? :shocked:

I'm getting offers of 4.875 and Huntington bank is showing 4.625. Both have a 1% origination fee.

 

[Hoober]

Originally posted by: CPA

Originally posted by: SagaLore

Originally posted by: radioouman
Wow. 4.75% on a 30 year fixed right now. I just refinanced in the spring, but I could drop 0.5% by refinancing again.
* digs up mortgage calculator *

Who is offering 4.75%? :shocked:

I'm getting offers of 4.875 and Huntington bank is showing 4.625. Both have a 1% origination fee.

I just locked @ 4.875 with a .75 origination fee. I'm happy.

 

[Descartes]

Ok guys, I just spoke to my JP Morgan guy again. He told me to actually hold on, because he said he's extremely confident we'll see a better rate coming into next week. He said it won't be in the 3s (that would be great), but low 4s is achievable.

So, I'm already locked at 4.875% but have 30 days to find something better. I know we're talking a fraction of a point at this stage, but that's a substantial savings on interest over the life of the loan.

Anyone hearing anything new?

 

[Renob]

Hello Descartes,

I would love to have your mortgage brokers name.

Thanks,
Rob

 

[IronWing]

IndyMac is loopy. Their online loan estimator gave closing costs equal to 6.2% of the loan value plus 1.5 points for a total closing cost of 7.8% of the loan value for an APR of 6.01% for a 10 yr fixed refi with 60% equity, no cash out, and excellent credit. I guess this is IndyMac's way of saying "go away".

 

[MikeyIs4Dcats]

hell, I got 4.625%/no PMI on a 15yr refi last spring. where were you guys then?

 

[ponyo]

Originally posted by: Descartes
Ok guys, I just spoke to my JP Morgan guy again. He told me to actually hold on, because he said he's extremely confident we'll see a better rate coming into next week. He said it won't be in the 3s (that would be great), but low 4s is achievable.

So, I'm already locked at 4.875% but have 30 days to find something better. I know we're talking a fraction of a point at this stage, but that's a substantial savings on interest over the life of the loan.

Anyone hearing anything new?

I agree with your mortgage broker. Everything I'm reading says rates are going lower and 30 year will likely hit very low 4s and 15 year might even hit high 3s. My sister is waiting to refinance her home in the low 4s. I'm little jealous of these low rates, but I love my no payment.

 

[Rage187]

I'm starting the 2nd year of a 15 year 5.25% loan I got earlier this year. It was for under $200,000 so I might just finish it unless rates get down to 3.5%

 

[gordita]

just checked my local credit union and saw rates drop big time.
saw the 15-yr fixed drop from 5.625% to 5.25% with no closing cost.
naturally, the no closing cost option make the rate pretty high.
they also offer a 4.5% with closing.
NY state tax kills all the fun out of paying closing costs.....I think I'm gonna bite today

 

[richardycc]

Originally posted by: Capt Caveman

Originally posted by: Descartes
I just locked in at 4.875% last Friday. With the recent developments, I'm going to hold off for a few and see if I can get even lower. I'll end up saving upwards of $1000/mo if I can refinance at a lower rate.

Same here. Just locked in at 4.875% and can relock once prior to closing. It'll save me $300 a month.

do you guys have to pay any points to get 4.875? I just got the same rate for a refi, but paying close to 1pt, and supposingly this is a good deal, because in order to get 4.875 refi, one has to pay 1.5 to 1.75pts. Am I getting a good deal? I will save about $300/month, as my current rate is 6.5%, but will lose the 2 1/2yrs equity and will need to pay this for the next 30yrs vs only 27.5yrs with my existing mortgage. this is with BOA, with their 400$ fee, and 700$ something fee, and lawyer fee, thats all. my credit score is 720.

 

[Capt Caveman]

Originally posted by: richardycc

Originally posted by: Capt Caveman

Originally posted by: Descartes
I just locked in at 4.875% last Friday. With the recent developments, I'm going to hold off for a few and see if I can get even lower. I'll end up saving upwards of $1000/mo if I can refinance at a lower rate.

Same here. Just locked in at 4.875% and can relock once prior to closing. It'll save me $300 a month.

do you guys have to pay any points to get 4.875? I just got the same rate for a refi, but paying close to 1pt, and supposingly this is a good deal, because in order to get 4.875 refi, one has to pay 1.5 to 1.75pts. Am I getting a good deal? I will save about $300/month, as my current rate is 6.5%, but will lose the 2 1/2yrs equity and will need to pay this for the next 30yrs vs only 27.5yrs with my existing mortgage. this is with BOA, with their 400$ fee, and 700$ something fee, and lawyer fee, thats all. my credit score is 720.

No points with Chase. You're in MA right? PM me and I'll forward you my mortgage brokers info.

 

[spacejamz]

Originally posted by: gordita
just checked my local credit union and saw rates drop big time.
saw the 15-yr fixed drop from 5.625% to 5.25% with no closing cost.
naturally, the no closing cost option make the rate pretty high.
they also offer a 4.5% with closing.
NY state tax kills all the fun out of paying closing costs.....I think I'm gonna bite today

Our current mortgage with my credit union is for a 20 year note at 5.7% (loan closed in Nov 2003). Total interest on this loan would have been $106K. We have already paid $41K in interest in the past 5 years, leaving a total of $65K of interest we still owe. Our monthly payment is $1100 a month (straight P&I)...

on Friday, my credit union had a 20-year at 4.5% and 15-year at 4.375%.

Refi'ing with the 15 year option results in $50K of interest (saving of $15K in interest with a monthly payment of $1038 and the loan would payoff on 12/2023).

Refi'ing with the 20 year option results in $71K of interest (owe $6K more in interest but monthly payment would drop to $866 a month and loan would payoff on 12/2028).

However, if we refi at 20 years but continue to pay $1100 a month, the total interest would only be $48K, a savings of $17K in interest and the loan would payoff on 12/2022.

It will cost us approximately $2000 to refi our loan...

 

[richardycc]

locked in today, points = 0.5, and the 2 fees, maybe title insurance, no lawyer fee, since we have prepaid lawyer at work. should be around $2500 total, not a great deal, but not bad either. going from 6.5% to 4.875%. all this depending on my home apprasial. fun fun fun...

Originally posted by: richardycc

Originally posted by: Capt Caveman

Originally posted by: Descartes
I just locked in at 4.875% last Friday. With the recent developments, I'm going to hold off for a few and see if I can get even lower. I'll end up saving upwards of $1000/mo if I can refinance at a lower rate.

Same here. Just locked in at 4.875% and can relock once prior to closing. It'll save me $300 a month.

do you guys have to pay any points to get 4.875? I just got the same rate for a refi, but paying close to 1pt, and supposingly this is a good deal, because in order to get 4.875 refi, one has to pay 1.5 to 1.75pts. Am I getting a good deal? I will save about $300/month, as my current rate is 6.5%, but will lose the 2 1/2yrs equity and will need to pay this for the next 30yrs vs only 27.5yrs with my existing mortgage. this is with BOA, with their 400$ fee, and 700$ something fee, and lawyer fee, thats all. my credit score is 720.