Author Topic: Refinancing (Read 3227 times)

catastrophe · « **on:** October 25, 2016, 12:47:25 PM »

Good idea or great idea? Never done it before. Interest rates probably not going to get much lower during my lifetime. What kind of slick bank tricks should I be on the lookout for?

Gooch · « **Reply #1 on:** October 25, 2016, 12:48:26 PM »

closing cost are for suckers.

XocolateThundarr · « **Reply #2 on:** October 25, 2016, 12:53:46 PM »

Depends on what your current interest rate, rate you can get, and how much you have left to pay on your home. We did it once on our old house. In hindsight, I wouldn't do it again. It was a PIA that resulted in a small gain.

steve dave · « **Reply #3 on:** October 25, 2016, 12:55:38 PM »

Quote from: catastrophe on October 25, 2016, 12:47:25 PM

Interest rates probably not going to get much lower during my lifetime.

said everyone everywhere for the last 5+ years

catastrophe · « **Reply #4 on:** October 25, 2016, 01:00:32 PM »

I did some very rough calculations and figured I'd save about 6-8 thousand. Worth the PIA?

catastrophe · « **Reply #5 on:** October 25, 2016, 01:01:05 PM »

Quote from: steve dave on October 25, 2016, 12:55:38 PM

Quote from: catastrophe on October 25, 2016, 12:47:25 PM
Interest rates probably not going to get much lower during my lifetime.

said everyone everywhere for the last 5+ years

NOT THIS GUY

Phil Titola · « **Reply #6 on:** October 25, 2016, 01:03:30 PM »

Just don't refi for a much longer term than you have left on your current mortgage. My dumb ass refi'd for another 15 year term when I should have had them do it for 10 to match what was left on my current mortgage.

yoga-like_abana · « **Reply #7 on:** October 25, 2016, 01:11:53 PM »

Quote from: catastrophe on October 25, 2016, 01:00:32 PM

I did some very rough calculations and figured I'd save about 6-8 thousand. Worth the PIA?

you're going to have to also have another appraisal done as well as a few other expenses. Why not just pay extra on the principal?

XocolateThundarr · « **Reply #8 on:** October 25, 2016, 01:14:53 PM »

Quote from: yoga-like_abana on October 25, 2016, 01:11:53 PM

Quote from: catastrophe on October 25, 2016, 01:00:32 PM
I did some very rough calculations and figured I'd save about 6-8 thousand. Worth the PIA?
you're going to have to also have another appraisal done as well as a few other expenses. Why not just pay extra on the principal?

This is the correct answer.

CNS · « **Reply #9 on:** October 25, 2016, 01:16:50 PM »

We just refinanced. Extended the mortgage 4 yrs and we save $250/month.

steve dave · « **Reply #10 on:** October 25, 2016, 01:22:14 PM »

Quote from: CNS on October 25, 2016, 01:16:50 PM

We just refinanced. Extended the mortgage 4 yrs and we save $250/month.

what was your pre and post rate?

catastrophe · « **Reply #11 on:** October 25, 2016, 01:29:26 PM »

Quote from: yoga-like_abana on October 25, 2016, 01:11:53 PM

Quote from: catastrophe on October 25, 2016, 01:00:32 PM
I did some very rough calculations and figured I'd save about 6-8 thousand. Worth the PIA?
you're going to have to also have another appraisal done as well as a few other expenses. Why not just pay extra on the principal?

Interest rate would be over 1% lower, which makes a difference even if I pay the 30 year in 10-12. At this point I'm of the mindset that even if I only save $3,000 it's worth sitting at the bank for 1-2 hours.

CNS · « **Reply #12 on:** October 25, 2016, 01:30:07 PM »

Don't remember pre(I think it was 3.8 or something), now it's 3.625. Part of savings was PMI. We basically stole our house and realized a shitload of equity by getting the formal appraisal and refi'ing.

XocolateThundarr · « **Reply #13 on:** October 25, 2016, 01:30:58 PM »

Forgot one of the more important factors earlier.....how long are you planning on staying in the house? We thought we were going to be staying for a while in our old place and pulled the refi trigger. Shortly thereafter we decided to start looking for a bigger home. Poor planning on our part, but we were enticed by the lower monthly payment. In the end, the refi ate up some of the valuable equity we had due to closing costs, etc. It turned out OK in the end, but we would have been better off staying with the old loan.

CNS · « **Reply #14 on:** October 25, 2016, 01:33:32 PM »

We break even at 2 yrs. We will be there quite a bit longer than that unless something unexpected happens.

catastrophe · « **Reply #15 on:** October 25, 2016, 01:34:15 PM »

I'm planning on being here until it's paid off. In either event, I'd be completely shocked if we moved within 2 years, which I think would make the closing costs a negligible factor.

catastrophe · « **Reply #16 on:** October 25, 2016, 01:36:01 PM »

Quote from: Gooch on October 25, 2016, 12:48:26 PM

closing cost are for suckers.

Speaking of, how negotiable are closing costs? I'm planning to refinance through the bank who currently holds my mortgage. Anything smart I could say about how I should be getting a better deal?

Tobias · « **Reply #17 on:** October 25, 2016, 01:37:15 PM »

Quote from: CNS on October 25, 2016, 01:33:32 PM

We break even at 2 yrs. We will be there quite a bit longer than that unless something unexpected happens.

like the shower ghost going at your throat?

CNS · « **Reply #18 on:** October 25, 2016, 01:38:20 PM »

Exactly. I am probably redoing that shower sometime in that same window, so S may get real.

Tobias · « **Reply #19 on:** October 25, 2016, 01:39:20 PM »

keep us updated

yoga-like_abana · « **Reply #20 on:** October 25, 2016, 01:49:30 PM »

Quote from: catastrophe on October 25, 2016, 01:36:01 PM

Quote from: Gooch on October 25, 2016, 12:48:26 PM
closing cost are for suckers.

Speaking of, how negotiable are closing costs? I'm planning to refinance through the bank who currently holds my mortgage. Anything smart I could say about how I should be getting a better deal?

Never hurts to tell them you are shopping for your re-fi. There may not be anything they can do but it doesn't hurt to tell them that.

mocat · « **Reply #21 on:** October 25, 2016, 02:25:46 PM »

Quote from: yoga-like_abana on October 25, 2016, 01:11:53 PM

Quote from: catastrophe on October 25, 2016, 01:00:32 PM
I did some very rough calculations and figured I'd save about 6-8 thousand. Worth the PIA?
Why not just pay extra on the principal?

you can still do this after refinancing

Mrs. Gooch · « **Reply #22 on:** October 25, 2016, 02:47:35 PM »

#1 Take your closing costs into account when you determine how much the refi is going to save you. Figure out how long it will take you to recoup that amount due to the lower interest rate and make sure you plan to be in the house that long or longer.
#2 Ask your current bank about low/no closing cost refi options. (Our bank sent some no closing cost offer in the mail and then we pretty much did everything by mail, so it was super easy. That was several years ago.)
#3 Make the new loan the same or shorter than the amount of time currently remaining on your loan or else you will lose a bunch of the benefit of a lower interest rate.
#4 Pay extra towards principle even if you do refi.
#4a Keep in mind that if you are making extra principle payments, you actually are not saving as much as you would calculate when assuming the loan lasts the entire term. (Assuming you would make the extra payments with or without the refi.)

sys · « **Reply #23 on:** October 25, 2016, 02:52:13 PM »

Quote from: Mrs. Gooch on October 25, 2016, 02:47:35 PM

#3 Make the new loan the same or shorter than the amount of time currently remaining on your loan or else you will lose a bunch of the benefit of a lower interest rate.
#4 Pay extra towards principle.

these don't make any sense at all, btw. if you are able to borrow at an attractive rate, you want to do so for as long as possible, not as short as possible.

Mrs. Gooch · « **Reply #24 on:** October 25, 2016, 02:54:59 PM »

Quote from: sys on October 25, 2016, 02:52:13 PM

Quote from: Mrs. Gooch on October 25, 2016, 02:47:35 PM
#3 Make the new loan the same or shorter than the amount of time currently remaining on your loan or else you will lose a bunch of the benefit of a lower interest rate.
#4 Pay extra towards principle.

these don't make any sense at all, btw. if you are able to borrow at an attractive rate, you want to do so for as long as possible, not as short as possible.

Depends on how the rate compares to wherever you would put your money if not paying toward the loan. If you are just going to stick it in a saving account which is making 1% then it is better to pay on the loan. If you would instead pay it toward your credit card debt (LOL) at 18% then yes obviously that would be better than paying on your low interest home loan.