How low can we go? 30 yr fixed at 3.75% with no fees...
- Thread starter ps99472
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How do you decide its worth pulling the trigger? In Qwerty's example, if we assume the jumbo is $500K, the .125 would be $30 a month. While trivial, its still more moola in your pocket and takes a few hours of paperwork.
Or is there more to refinancing that I am missing? I have never refinanced and looks like we can save $200 a month if we pay about $2500 and trying to decide if we should or shouldn't.
the reason i would want to do a zero cost refi (where the lender credit, which is given to the borrower in exchange for going with a higher rate, covers any lender fees and third party closing costs) is because if rates drop .25% or more than the rate i refinanced into, i can just go ahead and refi without losing out on any money i paid. in your example, your payback is a little over a year. say you close on your refi and three months later rates drop another half a %, you just lost out on about $2K if you refi again, or will take you longer to break even on the new refi. good luck.
my plan is to pay off the house in 8 more years after this. so the pushing back of the final payment on a 30 year isnt an issue for me. my plan when we bought the house 2 years ago was to pay it off in no more than 10 years, so far im still on pace. so for the next 5 years ill have 2.75% (or less if i refi) and year 6 would be no more than 4.75%, so that covers me for 6 of the 8 years. im hoping to get lucky on the refi's to all 8 years are at no more than 2.75%.
however, if i was going to refi a 30 year mortgage and my plan was to pay it off over 30 years then i would ensure that even with refis i paid enough to make sure that i only had that mortgage for 30 years.
ps99472
New member
So called my contact at Annie Mac, 5/1 ARM Jumbo 55%LTV, Fico 760+, at around 1pm, got quoted with $2200 in credits. Had to go back to work so couldn't lock, call back around 2pm and the credit is now $1300. He says lots of swings in the mortgage rates today, not typical, not sure if what he's saying is true. Gonna table it until I can hit that $2200 credit sweet spot for another free refi.
irvinehomeowner
Well-known member
So what about 80% LTV rates for us 99%ers?
The Motor Court Company
Well-known member
got too much cash in the bank with puny interest rates that wife has been complaining. trying to convince her to invest that into LTV or US treasuries or RMB or 2nd house in OH
usctrojancpa
Well-known member
The 30-year fixed loan never got to 3.00%...I think it got down to 3.125%-3.25%.i1 said:
qwerty said:
How do you decide its worth pulling the trigger? In Qwerty's example, if we assume the jumbo is $500K, the .125 would be $30 a month. While trivial, its still more moola in your pocket and takes a few hours of paperwork.
Or is there more to refinancing that I am missing? I have never refinanced and looks like we can save $200 a month if we pay about $2500 and trying to decide if we should or shouldn't.
qwerty
Well-known member
RKP - I don't have a set threshold. My gross payment would have gone down a little more than u calculated but the net payment wouldn't be as much because my tax bill is going to go up. But clearly u still come out ahead. At this point in only two months into my refi, don't have threshold just go with my gut to wait it out a little longer for the rate to drop to 2.5. In a year, if I'm still at 2.75 and can refi into the same rate I'll do it since it would give me another year of 2.75%.
In your case, for 200 (assuming it's gross) I would do it, if you are equipped to handle the outcomes when your 5 year rate expires.
In your case, for 200 (assuming it's gross) I would do it, if you are equipped to handle the outcomes when your 5 year rate expires.
usctrojancpa
Well-known member
The rule with refi's is to get a zero cost refi and never pay for them (sometimes you have to take a 1/8% higher rate to get enough credit to cover the costs).rkp said:
irvinehomeowner
Well-known member
So 5/1s are prime time are EVs?eyephone said:If you can save 200 a month with no fees. That's a car payment for a leaf!
I am too risk averse to join the 5/1 club. Its going from a 30y fixed to a 30y fixed but saving $200 a month.
I am not sure I understand the zero cost refi. Yes ideally I can get that but this is for my primary residence that we definitely will stay in for a while. The $2500 in fees will be covered in a little over a year.
I am not sure I understand the zero cost refi. Yes ideally I can get that but this is for my primary residence that we definitely will stay in for a while. The $2500 in fees will be covered in a little over a year.
qwerty
Well-known member
rkp said:
the reason i would want to do a zero cost refi (where the lender credit, which is given to the borrower in exchange for going with a higher rate, covers any lender fees and third party closing costs) is because if rates drop .25% or more than the rate i refinanced into, i can just go ahead and refi without losing out on any money i paid. in your example, your payback is a little over a year. say you close on your refi and three months later rates drop another half a %, you just lost out on about $2K if you refi again, or will take you longer to break even on the new refi. good luck.
irvinehomeowner
Well-known member
#NoCostIsFiveOneTime
irvinehusky
New member
Maybe I'm missing a point or two here (always possible) but when you are a serial refi'er, doesn't the loan go back to 30 years each time? Isn't there a cost to extend the loan back from 28 years back to 30 years, etc. again due to the additional payments? Even with the faster principal payback on those ARMs, I can't imagine the principal will go down that much more than a 30 year fixed for that short a time? Well, I guess if you pay it back sooner all will be o.k.? Is that the plan? What if you are not able to for whatever reason?
I plan to die in this house (unless I win the Lotto, which I don't buy so no chance) so I want to pay off my loan as fast as possible.
I plan to die in this house (unless I win the Lotto, which I don't buy so no chance) so I want to pay off my loan as fast as possible.
irvinehomeowner
Well-known member
If you look at an amortization schedule, I think if you combo multiple 5/1s over a 15 year period, at year 15, your balance may not be that different at year 15 for your fixed rate (although you would have more years left to pay off). At that point in time, get a 15-year fixed and the higher LTV could give you a better rate than your 30-year one.
Add to that the fact that you saved probably $200+ a month each time you refi and that should make up for any balance difference.
In ps9's case, this doesn't matter as I don't think he plans to stay in his current home even 10 years.
Add to that the fact that you saved probably $200+ a month each time you refi and that should make up for any balance difference.
In ps9's case, this doesn't matter as I don't think he plans to stay in his current home even 10 years.
qwerty
Well-known member
irvinehusky said:
my plan is to pay off the house in 8 more years after this. so the pushing back of the final payment on a 30 year isnt an issue for me. my plan when we bought the house 2 years ago was to pay it off in no more than 10 years, so far im still on pace. so for the next 5 years ill have 2.75% (or less if i refi) and year 6 would be no more than 4.75%, so that covers me for 6 of the 8 years. im hoping to get lucky on the refi's to all 8 years are at no more than 2.75%.
however, if i was going to refi a 30 year mortgage and my plan was to pay it off over 30 years then i would ensure that even with refis i paid enough to make sure that i only had that mortgage for 30 years.