Question: The usual rule of thumb is that the difference in interest rates has to >be >> > at least a couple of percentage points and you have to expect to be in >the >> > house for several more years before you begin to realize any savings >from >> > refinancing. Mortgage and housing markets are kind of unusual lately so >> > maybe the numbers will work out for you anyway, but maybe not.
>> Not true with today’s no cost refi’s. I no cost refi’d from 7.625 to >> 6.5% last September. I could go 6.0% no cost refi now and save another >> $50 a month, but I’m paying an extra $900 each month principle to pay >> the sucker down and expect to have the house paid off in 9 years if I >> stay in it else have a bunch of equity if I decide to sell.
>> I would never pay closing costs again on a refinance – basically the >> closing costs puts handcuffs on you in the sense you have to stay in the >> house until the break even point is up (cost of refinancing/monthly >> savings = number of months to break even).
>> Yeah, I didnt get the then prevailing rate of 6.0% in Sept 02 I could >> have gotten by paying closing costs, but I could get that now. And from >> Sept to January so far I saved $130 a month for FREE.
>> To the original poster’s question, if you’re going to pay the house off >> early then go for the lowest interest rate possible – think of your >> mortgage balance as a giant credit card balance – the lower the interest >> the better you are – except for recouping the closing costs
Answer: looked said it would be $3000 in fees/costs/whatever.
I went to Wachovia last month to refi.. and total cost to close was $1900. This included an appraisal of my house (which apparently went up $2000 in value the 1.5 years wei’ve lived here now) fees for the title company to close the loan, and the “loan origination fees” as well as the difference between what we owed the old loan and 80% from what the house is “now” worth.. so that we could stop the PMI payments…
In all we went from a 30 yr loan at 9% interest to a 15 year loan at 5.5% interest, no more PMI, 20% equity in our house, and payments that are $3 more than we currently pay.
(In all fairness, our original mortgage was horrible due to our circumstances and my lack of knowledge on getting a home loan)
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