Should I refinance?

[SmokeALib]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

 

[Baron Von Murderpaws]

Talk to your banker. Ask other financial places about their fee's and rates.
Go shopping and find the best deal you can.

I'm a hard core shopper. If I want something bad enough, I will get it for the price I'm willing to pay for it.
And if that means I have to wait around for the price to drop, I will do so. Don't rush into anything.
AND ALWAYS READ ALL OF THE FINE PRINT!!!

You might write Kristina Smallhorn to get some advice from her.
She's on Youtube, she's a realtor, and she's got ALL the "in's and out's" in real estate!
Plus, she's super nice!!

Kristina Smallhorn
PO BOX 1271 Prairieville LA 70769
#KristinaSmallhorn

 

[MarathonMike]

SmokeALib I assume your original was a 30 year? Where are you in the maturity of that loan?

 

[SmokeALib]

SmokeALib I assume your original was a 30 year? Where are you in the maturity of that loan?

Yes. 30 years. I bought house 4 years ago. So 26 years left.
The way I see it, they basically want to charge me 10k to refi my house at a lower interest rate. I'm thinking that's just too much.

 

[SmokeALib]

Talk to your banker. Ask other financial places about their fee's and rates.
Go shopping and find the best deal you can.

I'm a hard core shopper. If I want something bad enough, I will get it for the price I'm willing to pay for it.
And if that means I have to wait around for the price to drop, I will do so. Don't rush into anything.
AND ALWAYS READ ALL OF THE FINE PRINT!!!

You might write Kristina Smallhorn to get some advice from her.
She's on Youtube, she's a realtor, and she's got ALL the "in's and out's" in real estate!
Plus, she's super nice!!

Kristina Smallhorn
PO BOX 1271 Prairieville LA 70769
#KristinaSmallhorn

Thank you for responding! I can afford to wait a little, but these historically low rates are going up as we speak!

 

[Toddsterpatriot]

Yes. 30 years. I bought house 4 years ago. So 26 years left.
The way I see it, they basically want to charge me 10k to refi my house at a lower interest rate. I'm thinking that's just too much.

Yeah, that's way too much.

 

[AzogtheDefiler]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

That is a crazy fee! Shop around.

 

[Care4all]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

Don't do it!

Keep searching....try to find a loan with no fees or points, and lower interest than the existing mortgage, with the same or even less of a time period financed, than your existing mortgage has left.

Also, I believe there are free mortgage calculators that you can use, that you can put in for your existing mtg with years left, and new lower interest refinance rate, with loan years that can show your savings....I don't think you would save as much as you would spend on the 10k in fees....don't do it.

 

[flacaltenn]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

Depends on how long you've held the 4.5% mortgage and how much is left on the 100K..

The big downside of refinancing is that the amortization tables start from paying all months at 100% interest and no principle paydown for YEARS thereafter.

If your current mortgage is already paying down the principle at good clip and is fixed rate -- it might be better to hold it.

Because for at least 3 years after you refinance, you won't own any more equity on the house than you have now if you start the tables all over again..

Also how LONG do you intend to stay?

 

[Fort Fun Indiana]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

For $100K? Okay, here is how you check. A few different comparisons:

(Say you have closing costs of $2000 with appraisal. Maybe less, with some online lenders and bigger banks. Maybe more with others)

1) First, calculate the payment for $102,000 @ 2.3% for 15 yrs: $671/mo

2) Now, $100,000 @ 4.5% for 15 yrs: $765/mo

(765-671= $94/mo) * 180 mos = $16,920 saved, refinancing


So, you would save $16,920 over 15 years if you only ever plan to make the minimum payment required to pay off the home in 15 years. I.E., pay off mortgage you have for 180 months, versus refinancing it.

However, if you plan to pay more than the minimum:

Let's say you are comfortable paying $1000 per month. So, now , we hold the payment constant:

1) Keep current mortgage: $100,000 @ 4.50%, $1000 pd/mo: 125.5 payments, $125,500 paid in total.

2) Refinance: $102,000 @ 2.3%, $1000 pd/mo: 113.6 payments, $113,600 paid in total.

$11,900 saved over 9-10 years. Paying off about 1 year faster. About the same amount saved per year in the first scenario, really.

BUT you also do gain equity much faster, naturally, when you overpay. In scenario 2, where you overpay, Only about one year faster, though.

So the difference between refinancing and not refinancing is slight, if you plan overpay the mortgage by any substantial amount.

 

[flacaltenn]

Don't do it!

Keep searching....try to find a loan with no fees or points, and lower interest than the existing mortgage, with the same or even less of a time period financed, than your existing mortgage has left.

Also, I believe there are free mortgage calculators that you can use, that you can put in for your existing mtg with years left, and new lower interest refinance rate, with loan years that can show your savings....I don't think you would save as much as you would spend on the 10k in fees....don't do it.

I missed the point about the 100K in FEES !!! What kind of raw deal is that? Good catch and good point..

 

[Toddsterpatriot]

I missed the point about the 100K in FEES !!! What kind of raw deal is that? Good catch and good point..

I think he meant $10K in fees on a $100K mortgage.

 

[Turtlesoup]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

Ever thought of a low fee mortgage with a little bit of a higher interest rate? Third Federal is advertising low fees...don't know anything about them though.

 

[flacaltenn]

I think he meant $10K in fees on a $100K mortgage.

Hope so.. I'd take a fraction of a point to avoid that.. $10K is like another down payment, not a fee..

 

[Care4all]

I missed the point about the 100K in FEES !!! What kind of raw deal is that? Good catch and good point..

It's a total rip off, a scam.....if you think about it....charging 10% interest, or 10 points in financing fees for 100k, and then he pays another 2.3% in interest on top of that.....!!! Holy Toledo!!!

That's loan shark territory!

About 20 years ago in Massachusetts we refinanced from an 8% mortgage down to a 4.2% mortgage, with no fees/points.

 

[OKTexas]

So if I can refinance my house at 2.3% for 15 years, should I do it? Basically, I'm paying off my old mortgage (4.5%) 100k on 250k house. But the fees (110k on a 100k loan) has me thinking twice about pulling the plug. Any input is much appreciated!

2.3% seems high for a 15 year loan. I've seen them from 1.5%-1.9%. I just refied a 30 year 340K loan for 2.25% with about 2K in fees and closing costs. You need to do a lot more shopping.

.

 

[MarathonMike]

SmokeALib If you are able to make additional mortgage payments during the year, you might get close to a 15 year payoff without those very high loan fees.

 

[flacaltenn]

It's a total rip off, a scam.....if you think about it....charging 10% interest, or 10 points in financing fees for 100k, and then he pays another 2.3% in interest on top of that.....!!! Holy Toledo!!!

That's loan shark territory!

About 20 years ago in Massachusetts we refinanced from an 8% mortgage down to a 4.2% mortgage, with no fees/points.

Me and Toddster think the amount is 10K not 100K.. We'll find out...

 

[Care4all]

Me and Toddster think the amount is 10K not 100K.. We'll find out...

It is $10k on a $100,000 loan....and THAT is highway robbery, for refinancing fees!!!!

 

[Toddsterpatriot]

2.3% seems high for a 15 year loan. I've seen them from 1.5%-1.9%.

A while ago. They're currently in the 2.5% range.