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Is a Mortgage refinance for me?

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Old 11-30-2011, 08:38 AM   #1
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Is a Mortgage refinance for me?

Currently I have been in the same house for 9 yrs and have always paid an extra approx. $175 a month average on the principal. The original loan was for 92,500 and the current pay-off is at 52,XXX. Should I look into refinacing at this time or just continue to pay extra on my payment as I have been doing. Currently, 6%, 30yr. fixed rate. I've tried playing with numbers a bit and haven't really seen any huge advantage unless I can drop to 4% 30yr.(and paying the usual).
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Old 11-30-2011, 08:53 AM   #2
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4% may be a little optimistic as Wells Fargo has been hovering on average around 4.25% on a 30 year fixed. The question is how much is the refi going to cost you and will you benefit. My wife and I just refinanced down to 4.375% on a 30 year fixed. We could have gotten a lower rate but the loan fees would have been in around $6k. We ended up paying $800 and will save roughly $30,000 over the length of the loan but we owe $280k. Your amount is small so it may not be much of a benefit unless you can keep the loan fees way down.
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Old 11-30-2011, 08:55 AM   #3
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Old 11-30-2011, 09:10 AM   #4
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I have a calculator I built in excel to run re-fi numbers.

I plugged in your info (minus your escrow since you didn't list)

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Old 11-30-2011, 11:05 AM   #5
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Quote:
Originally Posted by macgyver View Post
I have a calculator I built in excel to run re-fi numbers.

I plugged in your info (minus your escrow since you didn't list)

Thanks for plugging the numbers for me...where I come into problems with is the refinance vs. paying over my principal payment. Last I was told was unless I can drop at least 2% it wasn't really a viable option when closing costs got figured in. I didn't include escrow due to the fact that it's kinda like herpes...you can try to hide it but it ain't going away.
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Old 11-30-2011, 11:17 AM   #6
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Yes and do it - im actually a loan officer and here are my 2 cents worth - refinance at a 10/15 year fixed rate and your payment may end up being about the same but what you are saving is the months off your note. Yes, refinances do cost money but you would be looking at about $3k closing on average but if you do the math you will save that on the overall cost of interest that you are currently paying.

I also see that you pay additional towards your monthly payment each month. If you are being honest that is awesome and thats the best way to pay down your debt quicker since most people pay the minimum amount due.

I strongly suggest you refinance because with the way the market is a 6% rate is way to high on a mortgage.

I understand why most go with a 30 year mortgage but if people do the math (real math) you will see the savings on a 10-15 year note even though your monthly payment will be higher.

This refinance deal all depends if you have your money for what the actual refinance will cost you at time of closing (roughly $3k). good luck in what you choose to do.
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Old 11-30-2011, 11:28 AM   #7
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Talk to your mortgage holder, instead of refinance just lower your rate. Cheaper that way.
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Old 11-30-2011, 11:56 AM   #8
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Quote:
Originally Posted by cc350 View Post
Talk to your mortgage holder, instead of refinance just lower your rate. Cheaper that way.
I don't think it's that easy...otherwise everyone would be doing that and no one would re-fi.
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Old 11-30-2011, 11:59 AM   #9
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It is that easy. Still pay to do it, but cheaper!
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Old 11-30-2011, 12:00 PM   #10
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Quote:
Originally Posted by TJGARZA84 View Post
I strongly suggest you refinance because with the way the market is a 6% rate is way to high on a mortgage.
Haha you're telling me. I have a 6.75, which was a great rate when I bought my house in 2007.

I have been wanting to re-fi for a while but I'm upside down on my house. I'm at about ~120% LTV now. However, based on the modifications to the HARP program (now allows up to 125% LTV) going into affect this month. I plan on calling about a re-fi on my house this week. If they say they can, I'll probably wait til February when I get my bonus so I can pay the closing costs in cash rather than rolling them into the loan.
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Old 11-30-2011, 12:06 PM   #12
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Originally Posted by cc350 View Post
It is that easy. Still pay to do it, but cheaper!

I've never heard of someone being able to do that. Hmmm..interesting. I guess I can call, doesn't hurt to try. HAHA
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Old 11-30-2011, 12:39 PM   #13
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Old 11-30-2011, 12:45 PM   #14
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Whats going on here.
Big Banking Business what took you so long??
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Old 11-30-2011, 12:53 PM   #15
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Quote:
Originally Posted by dexterdog View Post
4% may be a little optimistic as Wells Fargo has been hovering on average around 4.25% on a 30 year fixed. The question is how much is the refi going to cost you and will you benefit. My wife and I just refinanced down to 4.375% on a 30 year fixed. We could have gotten a lower rate but the loan fees would have been in around $6k. We ended up paying $800 and will save roughly $30,000 over the length of the loan but we owe $280k. Your amount is small so it may not be much of a benefit unless you can keep the loan fees way down.
Just for reference, Dec 2010 got refinanced on a 15yr 3.99% (65K + 5K closing). Just sold my home, and the loan was at 66K, but the payments + escrow were $400/mnth cheaper. I feel refinance was helpful since my wife got laid off.

Just bought a house with a loan of 175K, 4.25% 30yr. Payments after escrow and PMI are ~1400. (Job relocating me)
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Old 11-30-2011, 12:53 PM   #16
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Chad linked this in a thread I was in or I would of never have saw it
haha were puttin you to work x2....work and TW
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Old 11-30-2011, 12:57 PM   #17
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Quote:
Originally Posted by Dead Heretic View Post
Chad linked this in a thread I was in or I would of never have saw it

I see said the blind man to his deaf son, who was not in the room, yet nodded in agreement.

Your advice sounds great and need to do the 15 yr refin myself & will take the suggestion on trying local!
Thanks to the OP for asking the question.
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Old 11-30-2011, 12:58 PM   #18
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Quote:
Originally Posted by Dead Heretic View Post
even just one percent saved means a good portion of your payment will be lower. Because the majority of your payment is interest and less interest means lower payments. What you should look into doing is getting a 15 year mortgage because those rates right now are about three and a quater. Your payment will probably be lower because the term is shorter and the amount of principal you have already paid and a higher percentage of your payment will be applied to principal. My recommendation would be to sit with a LOCAL bank loan officer because they generally have better rates and a loans structured with you paying less fees and not as profit hungry as the big banks are. Mortgage shoppers beware of high origination charges and paying points for "lower rates" PM me if you want my contact info and for me to look at what is offered to you. Just like buying a car or new TV SHOP AROUND for a mortgage! Don't just go with your bank. Compare rates and origination charges.
absolutely. my wife and i refi'd to a 15-year @ 3.75% less than a year ago when rates were at all-time lows. they are even lower now i believe. keep in mind your final rate will be determined in part by your credit score/worthiness, regardless of what is advertised. everyone gets a 30-yr. mortgage cause it's easiest to afford, but if you run the long-term numbers it's obvious no one can "afford" to pay the interest incurred over such a long term. just my 2 cents
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Old 11-30-2011, 01:00 PM   #19
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so you start with the 30 then refi to the 15?
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Old 11-30-2011, 01:02 PM   #20
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I think tomorrow or Friday I will shop around for a 15yr mortgage... Based upon what I owe vs. the homes value I think I shouldn't have an issue.

As far as paying extra on the mortgage every month, what I have been doing all this time is:

1. rounding up to the nearest hundred dollars, even if it cost me $98.75 a month. Then,

2. adding another $100 dollars on top of that.

When I sat down and crunched numbers when I originally got the loan, I was told to pay ahead at least a $100 a month and the loan duration should drop down to 17.8yrs. or so.


Another on-topic question: For the loan closing cost, should I just pay that out of pocket or finance that into the loan...I would rather cough up 3K in advance and pay this MFer off...
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