I swear on the Collins Community CU site yesterday their 15 year rate was 2.375% and now today it shows 2.875%.
Is there any reason to not refinance?
- Thread starter cyfan964
- Start date
Yep, they went up this morning about a 1/2 of a percent. Why I wouldn't quibble about finding the absolute best deal possible. Just find something you are comfortable with and lock it in.
lol...this thread is great. So many opinions that are 100% dependent on perception.
Look at the average life of a 30-year mortgage. Still make sense? Now, do the math and squeeze your 30-year into a 15...most people can't do it.
My point...do what you want based on what you need...but don't be duped into thinking that you're actually saving money if you aren't going to keep that loan long enough to benefit. And, you can't re-am a 15 year into a 30...so when/if you get into a jam, good luck.
I'm watching people take 30 year mortgages they've been in since 2012 and refinance them on a 30 just to say they lowered their rate by .375 or .5 %. I'd love to hear the logic.
IDK, been doing this 20+ years and the one thing I've learned is a mortgage is such an individual preference...and as an industry expert, I can find ANY logic to justify you either doing something or not doing something.
I have 3.625% and I'm not doing a thing...because it doesn't make sense for me, although monthly, I'd appear to be "saving" money.
Look at the average life of a 30-year mortgage. Still make sense? Now, do the math and squeeze your 30-year into a 15...most people can't do it.
My point...do what you want based on what you need...but don't be duped into thinking that you're actually saving money if you aren't going to keep that loan long enough to benefit. And, you can't re-am a 15 year into a 30...so when/if you get into a jam, good luck.
I'm watching people take 30 year mortgages they've been in since 2012 and refinance them on a 30 just to say they lowered their rate by .375 or .5 %. I'd love to hear the logic.
IDK, been doing this 20+ years and the one thing I've learned is a mortgage is such an individual preference...and as an industry expert, I can find ANY logic to justify you either doing something or not doing something.
I have 3.625% and I'm not doing a thing...because it doesn't make sense for me, although monthly, I'd appear to be "saving" money.
it probably did...for a brief moment yesterday, the treasury AND mortgage rates dipped for a brief moment...and then shot back up. It's been a weird week with FNMA and the 10 year, for sure.
I get what you're saying, and there are plenty of people jumping into it and not looking at their situation as a whole, specifically how long they will be in the house.
But there are plenty of people that if they actually take the time to figure it out and have a good enough idea of how long they'll be in a house, and have the discipline to actually do an alternative that isn't locked in (i.e. stick with an existing 30 and pay extra vs. switch to a 15) the answer can be fairly clear-cut.
I created a google sheet for deciding whether a refi makes sense. Clone the sheet to your own account and customize the cells in green to match your scenario.
https://tinyurl.com/yxgqx3l3
3.5% is already pretty good. It would probably take a couple years to break even on closing costs, so it depends on how long you plan to stay.
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That was super helpful, thanks!
For me, my current rate is 4.125% and I'm just about 5 years in. If I assume I will be in the house until it's paid off in full, AND I assume I'm disciplined enough to keep paying the same monthly payment as I pay now, my break even point is only about 3.9%. (assuming $3,000 closing costs.)
However, I want to look at more like a 3-year break even point. IE: looking for a remaining principal balance (with a refi now!) if I sell 3 years from now that will be at least equal to what it would be if I do nothing ... and that came out to 3.4% on a 30-year. Which might not be too hard to get!
So the bottom line for me is: if I'm going to be in my current home for at least 3 years, and can get 3.4% or less on a 30-year fixed mortgage, and I pay enough extra each month to make it equal to my current home payment; then I SHOULD refi!
Good thread!
I worked with someone I know out of there when I refinanced and I was told rate was 2.5% and when I went to fill out the application it said 2.75% so I asked what was up and they adjusted it internally to 2.75% to just slow down the amount of people wanting to refinance because they couldn’t keep up. I still got the 2.5%
Community Choice Credit Union is showing 30-year conventional at an APR of 3.295% with no points right now. (as of the evening of this post)
I'm 2.5 years into a 4.25% 30-yr mortgage. I'm also following this thread. I'd love to knock 1%+ off of my interest rate. I think we'll live here for another 3-5 years minimum.
My friend in the banking world said the Feds are expecting to cut interest rates another 0.25%-0.5% next week. Said mortgage rates should follow starting within another month or so after and could drop as low as 2% before stabilizing around 2.75%. I'm following up with him to see if that was for 15 or 30-yr mortgage rates.
Either way, I could benefit from a 30-yr refi with rates below 3.5% so I'll continue to wait and see.
My friend in the banking world said the Feds are expecting to cut interest rates another 0.25%-0.5% next week. Said mortgage rates should follow starting within another month or so after and could drop as low as 2% before stabilizing around 2.75%. I'm following up with him to see if that was for 15 or 30-yr mortgage rates.
Either way, I could benefit from a 30-yr refi with rates below 3.5% so I'll continue to wait and see.
I've been in the banking industry for 30 years. The rates will probably artificially go up before coming back down because all lenders will eventually get overwhelmed. They cannot get all of the deals done in the required time which causes problems with delivering on the rate locks which costs the lender money. Typically a rate lock for refinance is 45 - 60 days depending on the volume. Staff will have mandatory overtime, which increases the cost and decreases the morale. People get impatient and start to "shop" the rate and walk away when they find a better one, once again costing the lender money. It is exciting at first as business pours in just by answering the phone but eventually no one wants to answer the phone and 12 - 15 hour days become a grind.
As to whether to refinance, it is always a personal decision. Normally a 50/50 split between those that want to shorten the term to save money over the life of the loan and those who reset to the 30 year term and improve the monthly cash flow. Neither is right or wrong, it just depends on an individuals situation.
As others have stated there is no such thing as a "free" refinance. Some just hide the true cost in the rates they charge. The low rates that claim no fees are almost certainly going to "sell" your loan to someone else to service. That is how they will make their money. Most who have had a loan sold to a different servicer, can tell you nightmares about missing payments, screwed up escrows etc. To me, I would rather know who I am dealing with even if it costs me a bit more.
I could go on for hours but, these are a few key points I think will benefit some of you.
As to whether to refinance, it is always a personal decision. Normally a 50/50 split between those that want to shorten the term to save money over the life of the loan and those who reset to the 30 year term and improve the monthly cash flow. Neither is right or wrong, it just depends on an individuals situation.
As others have stated there is no such thing as a "free" refinance. Some just hide the true cost in the rates they charge. The low rates that claim no fees are almost certainly going to "sell" your loan to someone else to service. That is how they will make their money. Most who have had a loan sold to a different servicer, can tell you nightmares about missing payments, screwed up escrows etc. To me, I would rather know who I am dealing with even if it costs me a bit more.
I could go on for hours but, these are a few key points I think will benefit some of you.
Another reason I like that site is you can show your amortization schedule. You can use that to see payback period for the fees.
completely agree...but everyone out here needs to understand that Loan Officers get paid to close loans, not necessarily guide you in the correct direction. MANY times, having a lower interest rate is simply a neat thing to say at a party or amongst friends...the reality is we still have unscrupulous people in this industry who want to make money, not help you.
One loan has come through 5 times in the last year. That LO should be fired.
Good luck to everyone. Unprecedented times for sure.
does your friend realize that the FED rate has zero to do with mortgage rates? I'd find someone else to counsel you...nobody knows what this market will do and after the inversion of the 10 year treasury and mortgage rates that took place late last week, anyone selling a lower rate in the future is speculating at best. That's a dangerous game.
