Good for yall! That's a win. I too was at a 4.24% 30 but went with a 15 and cash out. Closing in early July.

Wow. 2.875 on a 30. Now I am certain I won't settle till I get under 3

planoaggie123 said:

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Wow. 2.875 on a 30. Now I am certain I won't settle till I get under 3

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That's $8/month on $250K. Hope you get it, but I wasn't gonna cut off my nose to spite my face.

Wont be too firm but I will push....if i can get an even 3 i will gladly take it...excited about the possibilities...

If you dont mind me asking / being nosey....I assume you rolled your new escrow into the loan?

If you want to continue to escrow we set up a new and most like can be rolled into the new loan. Then the old lender refunds directly to you the old escrow balance.

It's a pain since it would be a lot easier if the old lender reduced the payoff so you don't have to jump through hoops but the feds do not allow that.

That is how ours is working. I assume industry standard.

I plan to use 90% of the escrow "refund" and pay back down the temporary increase to my total debt balance (leaving mainly an increase due to fees) and save a little bit for some here and there things around the house.

If you're viewing it from a math perspective, pretty much any debt you might have is going to be a lower interest rate than your refi.

As Steve mentioned it's apparently kind of a pain to roll it into your new escrow, I'm just going to pay off a credit card with it and probably do a bit of home improvement.

planoaggie123 said:

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If you dont mind me asking / being nosey....I assume you rolled your new escrow into the loan?

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Yes, rolled escrow into loan, and I get my old escrow back. Rolled refi charges into the loan. The new loan balance is ~$8K more, but I skip a payment or 2 and get my escrow balance. Gonna sock some 529 money away...

On a related note, if you have younger children, you of course know about 529 plans. However, unlike your 401(k), your account experience (we hope growth) is not taxable. It's basically like a Roth IRA with no early withdrawal penalties.

Unlike Roth IRA's, however, the time horizon is greatly compressed, generally less than 20 years, often much less. The point is that DCA is not the best strategy for 529 plans if you have the ability to sock away a big chunk early. That way you can maximize the tax free growth.

For those of you jumping on the 15 year bandwagon, especially if you are younger and have significant home equity, I would suggest doing a cash-out refi and putting the entire amount into 529 plans for your kids. You can basically pay for college today with these low rates.

Just something to think about, and I definitely would have done it 10 years ago if I had the rates and cash available.

Good thoughts.

I sometimes forget b/c I am a terrible person and the $ per month is so low but we still have some of my wife's student loans which i believe are 4.5% or so...that is my highest debt rate...may consider finishing those off once and for all...

Think I may lock in tomorrow or later this week. Think 3% is the number. Would like to sneak it under 3 but not sure I want to pay points for that. Will let y'all know how it ends up.

planoaggie123 said:

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Think I may lock in tomorrow or later this week. Think 3% is the number. Would like to sneak it under 3 but not sure I want to pay points for that. Will let y'all know how it ends up.

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Ended up taking the 2.875 for 0.875 points. Darn near no difference.

I am going to look into it and maybe i am doing something wrong but it seems like the recovery time on additional points is longer than i would expect...but...that may be user error so will have them run the numbers for me...

Break even on points for a 30 year loan is always around 5.5-6 years. It can vary somewhat but that is a good place holder. It is different on other amortization terms. Example...

3.0 no points
2.75 with 1 point
200k loan

843-816=27 dollars per month 2000/27=6.1 years. Price of points versus rate vary daily and does not always match my example but it's close

Ok. So my calculations are not too far off. I was not expecting a 7+ year payoff....

planoaggie123 said:

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Ok. So my calculations are not too far off. I was not expecting a 7+ year payoff....

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The math is all fine. My 1/8th point buy down for 0.875 points will get me $8 more/month. Whatever. The point is that with these rates, I can no longer view home equity as a good investment. Even in a slowly appreciating market, getting the full appreciation increase while owning as little as possible makes more sense. Crazy times, but having good credit is something I never thought I would need a few years ago.

Had not thought of it that way...

Most People do not monitor their credit near as much as they should. Low to moderate credit will cost you on all your debt not just mortgage. You should at least get the free report every year and check for errors or mistakes. It matters

SteveBott said:

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Most People do not monitor their credit near as much as they should. Low to moderate credit will cost you on all your debt not just mortgage. You should at least get the free report every year and check for errors or mistakes. It matters

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BoA sends it to me every month. I don't know why.

A lot of ironies I'm seeing. Take it with a grain of salt when I say what people "should" be doing. However, there are a lot of people with mediocre credit who really need to be paying cash or at least paying off early. And there are a lot of people with sparkling credit who are choosing not to use it. I was in that 2nd group for 30 years, but it just doesn't make sense any more.

And I know those 15 year mortgage rates are amazing too, but some of you should think long and hard about being that aggressive on a house. I've had 15's in the 5-6% range before, but there are semi-liquid investments that are returning higher that the 30 year mortgage (Lending Club comes to mind).

The issue is most free reports are just one bureau and you need to check all three majors. Negative reporting is often on just one so you are not getting all the info you need. I recommend this one. It's sponsored by federal law

https://www.annualcreditreport.com/index.action

Yeah, it's always my worst one by 30 points. They don't like the fact that my credit card only has a $25K limit. Whatever.

You want to be at 35% of your credit line. 50% is tops. Otherwise it hurts your score

SteveBott said:

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You want to be at 35% of your credit line. 50% is tops. Otherwise it hurts your score

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Yeah, but I don't care. They probably run the check every month at the exact time when I have 2 full months of charges on the card. I can be 80% some months if they run it just before the scheduled payment and the close for the prior month.

Got a 15 year 2.875 5 years ago. Already ran the math. It won't make sense for me to refinance unless it gets below 2, so probably never.

ABATTBQ11 said:

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Got a 15 year 2.875 5 years ago. Already ran the math. It won't make sense for me to refinance unless it gets below 2, so probably never.

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About the only thing that would make sense is to convert it to a 30 at the same rate. If you have $200,000 left and 10 years, you would have almost $1000 more per month if you re-started the clock on a 30 year. Personally, I would do that in a heartbeat, sock $100K away for college over the next 10 years...

I am a fairly conservative investor, but young people with good credit can strike right now to build some serious wealth. I'm not even talking about debt. It's about choosing not to invest your net worth in things that can be financed.

You could, for example, spread out the mortgage, take the savings, and throw it into an REIT. Bang, instant diversified real estate portfolio.

I'm 5 years into a 30 year note.

Remaining loan balance is 158
Home Value is 260
Interest Rate is 4.1%

I'm interested either in a cash out refinance for home improvement, or a new term to save some cash. Am I in a good position to do this?

SouthernRaisedYankee said:

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I'm 5 years into a 30 year note.

Remaining loan balance is 158
Home Value is 260
Interest Rate is 4.1%

I'm interested either in a cash out refinance for home improvement, or a new term to save some cash. Am I in a good position to do this?

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Looks like you can cash out ~$50k, so loan balance back to ~$208k... would you go back to a 30 year note? Assuming 30 years at 3.25%... that puts you at $905 per month, total cost of $326k.

So I am working through mine. My current set-up is a 30 year w/ 3.875 and a second loan, 30 year payments with full balance due in 15.

There was the increase to the conventional loan amount so I am putting more to the lower interest rate with this refi but still have a balance on the second, just smaller (even w/ the fees, etc).

They are now quoting me 5.5%, 20 year on the second note. That is higher than the rate i was paying on the 30 year, due in 15. Seems high...i am a little annoyed but maybe that is just the market...???

We have a real problem with cash outs right now. They are two points higher then a regular refinance due to a Fannie/Freddie guideline issued 6 weeks ago. A few lenders have figured a work around but not many. More later

Won't materially alter my overall result but was just a little surprised.

I plan to get the 2nd loan paid off in under 6 years and total interest cost won't be too bad....

I was having this conversation with a friend in the banking industry. Like a couple of you posted, I'm it the low 4's and the current refi just don't quite make it worth it.

In my conversation, she said call my bank, that her bank would in some cases negotiate a lower interest rate without an actual refi.

I have never heard of that as a possibility. I'm almost afraid to ask for getting told how stupid I am. Anyone ever heard of that?

Bluecat_Aggie94 said:

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I was having this conversation with a friend in the banking industry. Like a couple of you posted, I'm it the low 4's and the current refi just don't quite make it worth it.

In my conversation, she said call my bank, that her bank would in some cases negotiate a lower interest rate without an actual refi.

I have never heard of that as a possibility. I'm almost afraid to ask for getting told how stupid I am. Anyone ever heard of that?

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Recasting, maybe?

https://www.investopedia.com/terms/m/mortgagerecast.asp

Yes some lenders will recast at around half a point above market. So you get some benefit.

Just got a 2.7% 30 year with no points today.

Was a VA loan though, he said otherwise the lowest he's closed recently was 2.9

So I'm trying to figure this out. Currently have 4.25% 30yr, 5 years in. I'm seeing all kinds of low rates on this thread, but not getting anywhere near them. I've had 2 different companies provide quotes for our house in Houston and the best I saw was below.

20yr @ 3.25% regular refi. 15yr @ same %
Or
25yr @ 3.65% $95k cash back

Our credit is 790 range so it isn't that. House appraised up $125k since we bought in 2015 so plenty of equity. I'm finally scheduled to close the end of the week, but I'm trying understand why what I'm seeing is so far off from everyone else on this thread.