Refinance Mega Thread

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ymmt
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Re: Refinance Mega Thread

Post by ymmt »

Goal33 wrote: Fri Jul 23, 2021 12:28 pm In my scenario, better beats themselves on bankrate for the 15 year by a few hundred in credit but loses to themselves on bankrate for a 30 year by a few thousand.

I want a 15 year. Should I have them match based on the 30 year and expect the 15 year to improve as well?
Apparently that is the key... Find the one that is most mispriced and use that to reset their tables. I just went from 0 credits to almost $4k for my 15yr.
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truenyer
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Re: Refinance Mega Thread

Post by truenyer »

ymmt wrote: Fri Jul 23, 2021 12:49 pm
Goal33 wrote: Fri Jul 23, 2021 12:28 pm In my scenario, better beats themselves on bankrate for the 15 year by a few hundred in credit but loses to themselves on bankrate for a 30 year by a few thousand.

I want a 15 year. Should I have them match based on the 30 year and expect the 15 year to improve as well?
Apparently that is the key... Find the one that is most mispriced and use that to reset their tables. I just went from 0 credits to almost $4k for my 15yr.
At what rate?
ymmt
Posts: 67
Joined: Fri Jul 10, 2020 10:59 am

Re: Refinance Mega Thread

Post by ymmt »

truenyer wrote: Fri Jul 23, 2021 12:58 pm
ymmt wrote: Fri Jul 23, 2021 12:49 pm
Goal33 wrote: Fri Jul 23, 2021 12:28 pm In my scenario, better beats themselves on bankrate for the 15 year by a few hundred in credit but loses to themselves on bankrate for a 30 year by a few thousand.

I want a 15 year. Should I have them match based on the 30 year and expect the 15 year to improve as well?
Apparently that is the key... Find the one that is most mispriced and use that to reset their tables. I just went from 0 credits to almost $4k for my 15yr.
At what rate?
1.75% 15yr fixed
bestisfree
Posts: 137
Joined: Thu Jan 07, 2016 12:30 pm

Re: Refinance Mega Thread

Post by bestisfree »

TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512
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truenyer
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Re: Refinance Mega Thread

Post by truenyer »

ymmt wrote: Fri Jul 23, 2021 1:13 pm
truenyer wrote: Fri Jul 23, 2021 12:58 pm
ymmt wrote: Fri Jul 23, 2021 12:49 pm
Goal33 wrote: Fri Jul 23, 2021 12:28 pm In my scenario, better beats themselves on bankrate for the 15 year by a few hundred in credit but loses to themselves on bankrate for a 30 year by a few thousand.

I want a 15 year. Should I have them match based on the 30 year and expect the 15 year to improve as well?
Apparently that is the key... Find the one that is most mispriced and use that to reset their tables. I just went from 0 credits to almost $4k for my 15yr.
At what rate?
1.75% 15yr fixed
Jesus… so which rate on bankrate did you have them match?
ymmt
Posts: 67
Joined: Fri Jul 10, 2020 10:59 am

Re: Refinance Mega Thread

Post by ymmt »

truenyer wrote: Fri Jul 23, 2021 1:27 pm Jesus… so which rate on bankrate did you have them match?
Let's use this one as an example:
bestisfree wrote: Fri Jul 23, 2021 1:14 pm 15 years
1.750%
A = points $2,167
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265
Bankrate's Better quote has this guy at 1.75% for 0 upfront costs. You can take a screenshot directly to your loan officer and say you want the 0 points. That saves you $2,167. But you can do better...

If you look at the 30 year fixed 2.25%, Bankrate's Better quote has upfronts at $3,329 out-of-pocket, but Better.com's system has the 2.25% upfront at a much higher level than that (I don't have it in front of me since I locked already), but let's say the it was $10,000. The gap between Bankrate's Better quote and Better.com's system for the 30year 2.25% rate was much larger than that of the 15yr 1.75% rate. So in this case, you would to use the 30yr 2.25% rate as your 'price match' (to capture more of that spread), and once they update the rate table you can just switch back to the 15yr to get the benefit for the rate you care about.

Was able to go from ~$2K in points upfront like in the quote above to about $3.5K in credits.
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

ymmt wrote: Fri Jul 23, 2021 1:46 pm
truenyer wrote: Fri Jul 23, 2021 1:27 pm Jesus… so which rate on bankrate did you have them match?
Let's use this one as an example:
bestisfree wrote: Fri Jul 23, 2021 1:14 pm 15 years
1.750%
A = points $2,167
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265
Bankrate's Better quote has this guy at 1.75% for 0 upfront costs. You can take a screenshot directly to your loan officer and say you want the 0 points. That saves you $2,167. But you can do better...

If you look at the 30 year fixed 2.25%, Bankrate's Better quote has upfronts at $3,329 out-of-pocket, but Better.com's system has the 2.25% upfront at a much higher level than that (I don't have it in front of me since I locked already), but let's say the it was $10,000. The gap between Bankrate's Better quote and Better.com's system for the 30year 2.25% rate was much larger than that of the 15yr 1.75% rate. So in this case, you would to use the 30yr 2.25% rate as your 'price match' (to capture more of that spread), and once they update the rate table you can just switch back to the 15yr to get the benefit for the rate you care about.

Was able to go from ~$2K in points upfront like in the quote above to about $3.5K in credits.
My difference is about 2500. not as extreme. still. that would be a big help... how do you process the rate match? email, chat, call?
ymmt
Posts: 67
Joined: Fri Jul 10, 2020 10:59 am

Re: Refinance Mega Thread

Post by ymmt »

Goal33 wrote: Fri Jul 23, 2021 1:54 pm
ymmt wrote: Fri Jul 23, 2021 1:46 pm
truenyer wrote: Fri Jul 23, 2021 1:27 pm Jesus… so which rate on bankrate did you have them match?
Let's use this one as an example:
bestisfree wrote: Fri Jul 23, 2021 1:14 pm 15 years
1.750%
A = points $2,167
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265
Bankrate's Better quote has this guy at 1.75% for 0 upfront costs. You can take a screenshot directly to your loan officer and say you want the 0 points. That saves you $2,167. But you can do better...

If you look at the 30 year fixed 2.25%, Bankrate's Better quote has upfronts at $3,329 out-of-pocket, but Better.com's system has the 2.25% upfront at a much higher level than that (I don't have it in front of me since I locked already), but let's say the it was $10,000. The gap between Bankrate's Better quote and Better.com's system for the 30year 2.25% rate was much larger than that of the 15yr 1.75% rate. So in this case, you would to use the 30yr 2.25% rate as your 'price match' (to capture more of that spread), and once they update the rate table you can just switch back to the 15yr to get the benefit for the rate you care about.

Was able to go from ~$2K in points upfront like in the quote above to about $3.5K in credits.
I've noticed that the number on Bankrate depends a bit on LTV, mine is fairly low. It was done via email directly to LO, screenshot the bankrate quote and ask for a match. They circle back within the hour and the rate tables get updated.

My difference is about 2500. not as extreme. still. that would be a big help... how do you process the rate match? email, chat, call?
Via email with the LO, just need a screenshot of the quote on Bankrate.

I've noticed that LTVs have an impact on the points, so that may be why. I have a fairly low LTV
presto987
Posts: 487
Joined: Sun Aug 30, 2020 10:58 pm

Re: Refinance Mega Thread

Post by presto987 »

onamatopeia wrote: Fri Jul 23, 2021 12:24 pm I have been working with Better and LoanDepot, in a back and forth matching game, that I didn't intend for, but here I am, feeling exhausted and needing advice.

LoanDepot is beating Better with their amex credit, and I'm leaning towards them. The only thing is that their fees are atrociously high, but they're making up for it with a ton of lender credit. Is there anything I should be thinking of? Or am I being paranoid that something else will creep up, or there is a bait and switch waiting for me at the end of the rainbow?

Rate: 2.625%, 30 year conventional (locked on 7/20), approx 577k mortgage

Better: $1284 loan costs - $925 lender credit - $2000 amex credit = delta -$1641
Loan Depot: $2689 loan costs - $4,526 lender credit = delta -$1837

Thank you!
I've used both lenders, and you probably can't go wrong here either way. A few comments:

- LD's high fees don't matter if they're being offset by lender credit.
- Did you send LD's latest proposal to Better to see if they could beat it?
- When comparing the two offers, I recommend excluding section E costs (if you aren't already), because those should wind up being the same regardless of what lender you use. Just look at the costs in D for the loan costs.
presto987
Posts: 487
Joined: Sun Aug 30, 2020 10:58 pm

Re: Refinance Mega Thread

Post by presto987 »

bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512
We need to know your loan size in order to comment intelligently on which option is better. The 2% option is going to save you $1368 today relative to the 1.875% option. If you have a large loan balance then you may be willing to pay up for the 1.875% rate because of the interest savings over time, but if you have a smaller loan balance, then the interest savings is less, so 2% may be the way to go.
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Lee_WSP
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Location: Arizona

Re: Refinance Mega Thread

Post by Lee_WSP »

bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512
It comes down to breakeven time period. Personally I'd take the credits and not worry about when I'll breakeven by paying for the points.
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truenyer
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Re: Refinance Mega Thread

Post by truenyer »

ymmt wrote: Fri Jul 23, 2021 1:56 pm
Goal33 wrote: Fri Jul 23, 2021 1:54 pm
ymmt wrote: Fri Jul 23, 2021 1:46 pm
truenyer wrote: Fri Jul 23, 2021 1:27 pm Jesus… so which rate on bankrate did you have them match?
Let's use this one as an example:
bestisfree wrote: Fri Jul 23, 2021 1:14 pm 15 years
1.750%
A = points $2,167
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265
Bankrate's Better quote has this guy at 1.75% for 0 upfront costs. You can take a screenshot directly to your loan officer and say you want the 0 points. That saves you $2,167. But you can do better...

If you look at the 30 year fixed 2.25%, Bankrate's Better quote has upfronts at $3,329 out-of-pocket, but Better.com's system has the 2.25% upfront at a much higher level than that (I don't have it in front of me since I locked already), but let's say the it was $10,000. The gap between Bankrate's Better quote and Better.com's system for the 30year 2.25% rate was much larger than that of the 15yr 1.75% rate. So in this case, you would to use the 30yr 2.25% rate as your 'price match' (to capture more of that spread), and once they update the rate table you can just switch back to the 15yr to get the benefit for the rate you care about.

Was able to go from ~$2K in points upfront like in the quote above to about $3.5K in credits.
I've noticed that the number on Bankrate depends a bit on LTV, mine is fairly low. It was done via email directly to LO, screenshot the bankrate quote and ask for a match. They circle back within the hour and the rate tables get updated.

My difference is about 2500. not as extreme. still. that would be a big help... how do you process the rate match? email, chat, call?
Via email with the LO, just need a screenshot of the quote on Bankrate.

I've noticed that LTVs have an impact on the points, so that may be why. I have a fairly low LTV
Ugh I locked last week at 1.75% no points. Wonder if I can get them to give me some credit before I close.
MrJedi
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Re: Refinance Mega Thread

Post by MrJedi »

bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512
I prefer more credits.

If rates continue to fall you can refinance again and cash in again. Or if rates stay relatively flat and the Amex/Better renew the deal again you can do that again in 6 months.

If there's any potential of moving in the near future that favors the credits as well.

If you want to be one and done and believe you will hold the loan for a long time, then maybe the points make sense, that is personal though. It is sort of a bet that rates have bottomed though.
dfeucht
Posts: 29
Joined: Thu Apr 18, 2019 2:04 pm

Re: Refinance Mega Thread

Post by dfeucht »

2K2D wrote: Fri Jul 23, 2021 12:42 pm Hey everyone,

Long time reader, first time poster. You know the deal...taking everyone's advice and looking at a refinance through Better.com vs. my local mortgage broker. Better.com just seems easier and rates are way better than anything I can get locally. We refinanced in November of last year from 4.5% to 3.375 30 yr fixed. Better.com is quoting me the following. Can someone help me understand if I am truly getting a net credit? First time doing this myself. It appears I will owe at closing, but in reality I'll get most of that back in escrow return from my prior lender once the loan is funded since I am not financing any closing costs back into the loan?

This is on a 30 year fixed at 2.75%, no points on a $441k loan. Appraisal waived.

Loan Costs
A. $0
B. $64
C. $936
D. $1,000

Other Costs
E. $236
F. $506 (prepaid interest)
G. $5,123 (escrow prepay)
H. $0
I. $5,865

Total Closing Costs
D+I = $6,865
Lender Credits = $3,883
Cash from borrower at close = $2,982
A+B+C+E are the costs of doing the loan. F and G are costs you pay anyways. So with Lender Credit at $3,883 and A+B+C+E = $1,236 you are netting $2,647 to take this loan. If you get an AmEx you can net an additional $2k via credit after closing..

My guess is you could go to 2.625% and the credit would fall by less than that $2,647 so you would still net money from the closing and can get the AmEx credit if you get or have an AmEx Card. I would ask what the credit would be at 2.625% and even 2.5%. May be a small cost at 2.5% but again could net $2k via AmEx card to cover it. Either way you have choices.
bestisfree
Posts: 137
Joined: Thu Jan 07, 2016 12:30 pm

Re: Refinance Mega Thread

Post by bestisfree »

presto987 wrote: Fri Jul 23, 2021 2:05 pm
bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512

We need to know your loan size in order to comment intelligently on which option is better. The 2% option is going to save you $1368 today relative to the 1.875% option. If you have a large loan balance then you may be willing to pay up for the 1.875% rate because of the interest savings over time, but if you have a smaller loan balance, then the interest savings is less, so 2% may be the way to go.

Thank you! The loan size is $214k. They actually sweetened the deal (see below for the updated rates) -- and so I am even more confused...


Loan size: $214,000

15 years
1.750%
A = points $857
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$45 (profit)

15 years
1.875%
points -$560 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,462 (profit)

15 years
2.000%
points = -$1928 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$2,830
mrmr
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Joined: Wed Dec 09, 2015 4:12 pm

Re: Refinance Mega Thread

Post by mrmr »

dks05c wrote: Wed Jul 21, 2021 1:51 pm
toblerone wrote: Wed Jul 21, 2021 1:41 pm
2Scoops wrote: Wed Jul 21, 2021 8:31 am
bws wrote: Wed Jul 21, 2021 8:28 am
2Scoops wrote: Wed Jul 21, 2021 8:10 am

Updating my info as well from a few days ago where a few people in this thread pointed me to Better for my refinance. My numbers are extremely similar to yours. I also locked in a 15 year at 1.75%, similar loan cost and also getting 2K AMEX credit. Loan is 251K and home value is around 500K.

Really appreciate everyone on the forum!
Where do you think you could have done better than Better? 1.75 is the lowest I've seen at close to no cost.
I assume you were responding to Toblerone and not me. I am extremely happy with the 1.75% and it was the best offer I found after looking at several options. :sharebeer
I was extremely happy until someone posted before me that they got 1.875% at Better with a $4k credit, plus the $2k Amex bonus. That's about a $6k difference for only .125% higher rate. Oh well, I suppose I'm still pretty happy :sharebeer 1.75% is insanely low.
I did have to get Better to match Bankrate rates. The day before they quoted me 2.25% and a fraction of a point. I sent a quote screenshot but the LO said that wasn't enough, he needed a full estimate from a competitor. While I was getting the estimate they relented and offered 1.75%.

Now they are saying the appraisal cannot be waived because it's a Fannie Mae requirement. It looks like maybe I should have chosen $990k instead of $1m for home value, but maybe Better does the appraisal every time regardless. Would have been nice to save $550.
Sorry that was me. The trick is to get the best overall deal on bankrate, not just the specific rate/term you are looking for. Once better updates that rate on their site, ALL of the terms change across the board. For example, if a 30 year cash out refi has the best actual DEAL (not rate but deal) on Bankrate, have Better match that rate, which will then reduce the 15 year fixed non cash out on Better. By doing that 15 year fixed for me showed either 1.75 with 2200 in credits or 1.875 with 4400 in credits. I went with the 1.875.
I'm curious how to tell which offer is the best deal.

I'm looking for a 30 year on 397k; the offers from Better I'm seeing on bankrate are:
0 pts/2.5%/30yr
0.199($790) pts/2.375%/30yr
1.099 pts($4363)/2.25%/30yr
0.14 pts($556)/1.75%/15yr
0 pts/1.875%/15yr

I can see that the delta 2.5% and 2.375% is 0.8 points, and between 2.375% and 2.25% is 0.9 points, so it would appear if I asked them to match the 2.375%/0.199 points offer and then went with 2.5%/0 points I could achieve -0.1 points which it sounds like is received as a credit. But how do I compare the 15 year offers to the 30 year offers?
presto987
Posts: 487
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Re: Refinance Mega Thread

Post by presto987 »

bestisfree wrote: Fri Jul 23, 2021 3:10 pm
presto987 wrote: Fri Jul 23, 2021 2:05 pm
bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512

We need to know your loan size in order to comment intelligently on which option is better. The 2% option is going to save you $1368 today relative to the 1.875% option. If you have a large loan balance then you may be willing to pay up for the 1.875% rate because of the interest savings over time, but if you have a smaller loan balance, then the interest savings is less, so 2% may be the way to go.

Thank you! The loan size is $214k. They actually sweetened the deal (see below for the updated rates) -- and so I am even more confused...


Loan size: $214,000

15 years
1.750%
A = points $857
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$45 (profit)

15 years
1.875%
points -$560 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,462 (profit)

15 years
2.000%
points = -$1928 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$2,830
I would go for 2% or even higher. At your loan balance, a 0.125% rate reduction only saves you less than $300 of interest in year 1 (and the savings are even less than that if you deduct your mortgage interest). As someone notes up thread, it’s all about the number of years to break even. In your case, it’s ballpark around 5 years. Better off taking the guaranteed credit, in my view, unless you are locked into this house for a long time and don’t intend to refi again.
investor.was.here
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Re: Refinance Mega Thread

Post by investor.was.here »

Just locked in with Better:

term: 15yr
rate: 1.75%
loan size: $346k
B+C+E = $3646
AmEx promo = -$2000
net cost = $1646

old rate: 2.875%
term: 22yr
ROI about 5mo

Incidentally, we started at 3.6% 8yrs ago. Rough math, the drop in interest rates knocked 5yrs off the mortgage.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Goal33 wrote: Fri Jul 23, 2021 12:28 pm In my scenario, better beats themselves on bankrate for the 15 year by a few hundred in credit but loses to themselves on bankrate for a 30 year by a few thousand.

I want a 15 year. Should I have them match based on the 30 year and expect the 15 year to improve as well?

Brandon, do you know?

Another question or opinion requested. Is it worth giving up a 2.5% 30 year (10 months in) for a 1.875% 15 year? The difference in payment (~$1800) would be going to a 70/30 stock/bond portfolio otherwise.
Yes, pricing is updated across all your rate tables. You could take screenshots of both the 15 year and 30 year, send them only the 30 year, and then look at your rate table once it has been updated. If the 15 year isn't as good, then send them the 15 year one and say "I've decided I rate get the lower rates on a 15 year term and see Better's Bankrate pricing for that is even better. Could you please adjust my rate table again to match this?" :)

That one is a hard one to answer. For me, my mental line in the sand is no more than 30 years since I bought the house. Given that I've had it over 10 years but under 20, a 15 year loan fits just right for me. It's my way of balancing the emotional aspect to the financial aspect. Either one is a good offer and it all depends on your overall cash flow.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

presto987 wrote: Fri Jul 23, 2021 3:50 pm
bestisfree wrote: Fri Jul 23, 2021 3:10 pm
presto987 wrote: Fri Jul 23, 2021 2:05 pm
bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512

We need to know your loan size in order to comment intelligently on which option is better. The 2% option is going to save you $1368 today relative to the 1.875% option. If you have a large loan balance then you may be willing to pay up for the 1.875% rate because of the interest savings over time, but if you have a smaller loan balance, then the interest savings is less, so 2% may be the way to go.

Thank you! The loan size is $214k. They actually sweetened the deal (see below for the updated rates) -- and so I am even more confused...


Loan size: $214,000

15 years
1.750%
A = points $857
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$45 (profit)

15 years
1.875%
points -$560 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,462 (profit)

15 years
2.000%
points = -$1928 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$2,830
I would go for 2% or even higher. At your loan balance, a 0.125% rate reduction only saves you less than $300 of interest in year 1 (and the savings are even less than that if you deduct your mortgage interest). As someone notes up thread, it’s all about the number of years to break even. In your case, it’s ballpark around 5 years. Better off taking the guaranteed credit, in my view, unless you are locked into this house for a long time and don’t intend to refi again.
I would also do 2% (or more) in your shoes. I'm close and can do 2.25% at $500 after closing costs (but before Amex credit) or 2.375% at $700 profit after closing costs (but before Amex credit). So which am I doing? 2.5% at $4,800 in lender credits bringing my totals after closing costs and Amex credit to $5,300! Plus, this is my 5th refi with Better and I plan to do another in February if I can. Incidentally, if I locked on Tuesday this week instead of weeks ago, I would be another $3,500 cheaper, so probably walking away with this same $5k profit at 2.125% - 2.25%.
Goal33
Posts: 2004
Joined: Sun Apr 12, 2015 12:30 pm

Re: Refinance Mega Thread

Post by Goal33 »

For the better amex deal, do the email addresses on file need to be the same? What's the identifier?
Cycle
Posts: 2047
Joined: Sun May 28, 2017 7:57 pm
Location: Minneapolis

Re: Refinance Mega Thread

Post by Cycle »

I don't currently have an Amex. For eligible cards to get the $2k, could it be any of the 18 cards here:

https://www.americanexpress.com/us/cred ... sonalcards

Including delta, which currently has 70k bonus miles sign up? I may be banned from that one since we've churned it a few times, but could probably qualify for the others, like blue cash.

Question 2, can I lock before the card arrives or do I need to give them my Amex info before locking?

For others, Amex fine print is here https://better.com/with/amex
Never look back unless you are planning to go that way
ercolau
Posts: 10
Joined: Sat Apr 21, 2018 10:23 am

Re: Refinance Mega Thread

Post by ercolau »

Cycle wrote: Fri Jul 23, 2021 5:32 pm
Question 2, can I lock before the card arrives or do I need to give them my Amex info before locking?
When I did my first refi with better last year I applied for the Amex a few days after locking and everything worked fine. After I got the card I asked Better to add the Amex promo to my application.

The only issue I ran in to was that the new card showed up on my credit report during underwriting and Better asked for the most recent monthly statement for it. Since it was a new card I didn't have a statement and there was a several rounds of back and forth with the loan person trying to figure out how to deal with that. The solution in the end was to wait until the first statement was issued but this was in the early stages of the pandemic when closings were taking longer, not sure if that would work now that Better is caught up with applications and closing faster.
tj
Posts: 9317
Joined: Wed Dec 23, 2009 11:10 pm

Re: Refinance Mega Thread

Post by tj »

BrandonBogle wrote: Fri Jul 23, 2021 4:56 pm
presto987 wrote: Fri Jul 23, 2021 3:50 pm
bestisfree wrote: Fri Jul 23, 2021 3:10 pm
presto987 wrote: Fri Jul 23, 2021 2:05 pm
bestisfree wrote: Fri Jul 23, 2021 1:14 pm TIA - great thread as everyone has stated.

Looking at two refi options at Better. Currently at 2.5% 15 years. Is my calc for net cost correct (cost = A+B+C+E- Amex discount)? Which one should I go for (I assume 15 years, 1.875% but not sure if my rationale is sound...)?

15 years
1.750%
A = points $2,167

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = $1,265

15 years
1.875%
points $750

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$152 (profit)

15 years
2.000%
points = -$618 (credit)

B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,512

We need to know your loan size in order to comment intelligently on which option is better. The 2% option is going to save you $1368 today relative to the 1.875% option. If you have a large loan balance then you may be willing to pay up for the 1.875% rate because of the interest savings over time, but if you have a smaller loan balance, then the interest savings is less, so 2% may be the way to go.

Thank you! The loan size is $214k. They actually sweetened the deal (see below for the updated rates) -- and so I am even more confused...


Loan size: $214,000

15 years
1.750%
A = points $857
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$45 (profit)

15 years
1.875%
points -$560 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$1,462 (profit)

15 years
2.000%
points = -$1928 (credit)
B+C+E = $1,098
AmEx promo = -$2,000
Net cost = -$2,830
I would go for 2% or even higher. At your loan balance, a 0.125% rate reduction only saves you less than $300 of interest in year 1 (and the savings are even less than that if you deduct your mortgage interest). As someone notes up thread, it’s all about the number of years to break even. In your case, it’s ballpark around 5 years. Better off taking the guaranteed credit, in my view, unless you are locked into this house for a long time and don’t intend to refi again.
I would also do 2% (or more) in your shoes. I'm close and can do 2.25% at $500 after closing costs (but before Amex credit) or 2.375% at $700 profit after closing costs (but before Amex credit). So which am I doing? 2.5% at $4,800 in lender credits bringing my totals after closing costs and Amex credit to $5,300! Plus, this is my 5th refi with Better and I plan to do another in February if I can. Incidentally, if I locked on Tuesday this week instead of weeks ago, I would be another $3,500 cheaper, so probably walking away with this same $5k profit at 2.125% - 2.25%.
is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
MrJedi
Posts: 3538
Joined: Wed May 06, 2020 11:42 am

Re: Refinance Mega Thread

Post by MrJedi »

Goal33 wrote: Fri Jul 23, 2021 5:30 pm For the better amex deal, do the email addresses on file need to be the same? What's the identifier?
Nope. You enter in the card number in your loan/task portal. Name on the account has to match borrower or co borrower. Statement credit goes directly onto the card entered in the portal.
ssizzling7s
Posts: 6
Joined: Sat Jul 17, 2021 7:45 pm

Re: Refinance Mega Thread

Post by ssizzling7s »

Hey all, this group has been highly informative, so much that I think we're going to change our approach to our loan.

We plan on refinancing through Better, we wanted the best APR and were able to get an APR of 2.2589 for $330 in origination fee. No lender credits so we were looking at a 321k loan amount with 8k in closing costs equaling a total principal of 329k. This would be $1705 monthly and total interest of $80,199.

Seemed straight forward enough until we started reading about the benefits of going with a higher APR and taking lender credits. Assuming we go that course, we're looking at the following on our locked table.

APR of 2.404, drop the $330 point fee and get $2,536 in credits. This changes our loan amount to 326k, including 5k in closing costs. We'd be looking at $1712 monthly and over the course of the loan and pay 85k in interest.

Odds are we'll refinance, either to get a better rate or possibly move into a 15yr. Not rolling that $2800 in additional closing costs into a future loan is quite appealing. It looks like the lower 2.25% would only start paying off about 15 years into the loan. Are we understanding the above numbers correctly? If anyone is wondering why our closing costs are so high, here's the breakdown. We live in Seattle and everything is expensive up here.

origination $330
appraisal/credit report $614
title insurance & Settlement $1,101
Recording fee and taxes $431
Property tax $4,109
Initial Escrow $1,905

Also, what are your thoughts on that property tax, would you roll it into the new loan or would you pay it off with the funds that will come from closing out our old escrow account (it'll be roughly the same). Thanks again for any insight you guys have.
tj
Posts: 9317
Joined: Wed Dec 23, 2009 11:10 pm

Re: Refinance Mega Thread

Post by tj »

ssizzling7s wrote: Fri Jul 23, 2021 7:30 pm Hey all, this group has been highly informative, so much that I think we're going to change our approach to our loan.

We plan on refinancing through Better, we wanted the best APR and were able to get an APR of 2.2589 for $330 in origination fee. No lender credits so we were looking at a 321k loan amount with 8k in closing costs equaling a total principal of 329k. This would be $1705 monthly and total interest of $80,199.

Seemed straight forward enough until we started reading about the benefits of going with a higher APR and taking lender credits. Assuming we go that course, we're looking at the following on our locked table.

APR of 2.404, drop the $330 point fee and get $2,536 in credits. This changes our loan amount to 326k, including 5k in closing costs. We'd be looking at $1712 monthly and over the course of the loan and pay 85k in interest.

Odds are we'll refinance, either to get a better rate or possibly move into a 15yr. Not rolling that $2800 in additional closing costs into a future loan is quite appealing. It looks like the lower 2.25% would only start paying off about 15 years into the loan. Are we understanding the above numbers correctly? If anyone is wondering why our closing costs are so high, here's the breakdown. We live in Seattle and everything is expensive up here.

origination $330
appraisal/credit report $614
title insurance & Settlement $1,101
Recording fee and taxes $431
Property tax $4,109
Initial Escrow $1,905

Also, what are your thoughts on that property tax, would you roll it into the new loan or would you pay it off with the funds that will come from closing out our old escrow account (it'll be roughly the same). Thanks again for any insight you guys have.
The property taxes just seem completely irrelevant. You have to pay property taxes even if yo don't have a mortgage.
MichaelAZ
Posts: 35
Joined: Tue Jun 08, 2021 10:49 pm

Re: Refinance Mega Thread

Post by MichaelAZ »

tj wrote: Fri Jul 23, 2021 6:45 pm is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
Better limits the cash to borrower to $2K on a non-cash-out refi. If you bump up against that limit, they'll reduce the new loan's principal balance (you don't lose the lender credits). The restriction is set by Freddie and Fannie, but I'm not sure it's $2K, but rather 1% of loan (not certain). But Better limits it to $2K.

They also limit lender credits to $5K. I asked them to improve my pricing on a refi I'm closing tomorrow due to removal of adverse market fee. They agreed to 0.25% ($1100), but my lender credit was already at $4230 so there wasn't room to take the full 0.25%. They offered to let me take $5K in credits on my locked 2.125% rate (i.e. $770 improvement) or to float down 1/8th on my original pricing table and take the full $1100. I opted for the $5K.
tj
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Re: Refinance Mega Thread

Post by tj »

MichaelAZ wrote: Fri Jul 23, 2021 7:44 pm
tj wrote: Fri Jul 23, 2021 6:45 pm is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
Better limits the cash to borrower to $2K on a non-cash-out refi. If you bump up against that limit, they'll reduce the new loan's principal balance (you don't lose the lender credits). The restriction is set by Freddie and Fannie, but I'm not sure it's $2K, but rather 1% of loan (not certain). But Better limits it to $2K.

They also limit lender credits to $5K. I asked them to improve my pricing on a refi I'm closing tomorrow due to removal of adverse market fee. They agreed to 0.25% ($1100), but my lender credit was already at $4230 so there wasn't room to take the full 0.25%. They offered to let me take $5K in credits on my locked 2.125% rate (i.e. $770 improvement) or to float down 1/8th on my original pricing table and take the full $1100. I opted for the $5K.
This is interesting, so by doing serial refinances, you're effectively paying down the loan faster even when you take the higher interest rate. :mrgreen:
ssizzling7s
Posts: 6
Joined: Sat Jul 17, 2021 7:45 pm

Re: Refinance Mega Thread

Post by ssizzling7s »

ssizzling7s wrote: Fri Jul 23, 2021 7:30 pm Hey all, this group has been highly informative, so much that I think we're going to change our approach to our loan.

We plan on refinancing through Better, we wanted the best APR and were able to get an APR of 2.2589 for $330 in origination fee. No lender credits so we were looking at a 321k loan amount with 8k in closing costs equaling a total principal of 329k. This would be $1705 monthly and total interest of $80,199.

Seemed straight forward enough until we started reading about the benefits of going with a higher APR and taking lender credits. Assuming we go that course, we're looking at the following on our locked table.

APR of 2.404, drop the $330 point fee and get $2,536 in credits. This changes our loan amount to 326k, including 5k in closing costs. We'd be looking at $1712 monthly and over the course of the loan and pay 85k in interest.

Odds are we'll refinance, either to get a better rate or possibly move into a 15yr. Not rolling that $2800 in additional closing costs into a future loan is quite appealing. It looks like the lower 2.25% would only start paying off about 15 years into the loan. Are we understanding the above numbers correctly? If anyone is wondering why our closing costs are so high, here's the breakdown. We live in Seattle and everything is expensive up here.

origination $330
appraisal/credit report $614
title insurance & Settlement $1,101
Recording fee and taxes $431
Property tax $4,109
Initial Escrow $1,905

Also, what are your thoughts on that property tax, would you roll it into the new loan or would you pay it off with the funds that will come from closing out our old escrow account (it'll be roughly the same). Thanks again for any insight you guys have.
Thanks for the reply, I understand the property tax remains regardless, just threw it it for a complete breakdown of closing costs.
MrJedi
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Re: Refinance Mega Thread

Post by MrJedi »

I typically only go for offers that have no true cost (D+E-lender credits = 0 or close). Beyond that there will be prepaids and initial escrow (F+G) that show up in cash to close. I do not mind simply rolling those costs into the loan balance and then pocketing the old loan/escrow refund, sort of like an extra little cash out. Yes the loan balance goes up, but if you are making minimum payments anyway and investing the difference, then you are already content with holding debt at that rate. You can always effectively change your mind later as well by making an extra principal payment with the refund from the old loan and escrow after that is received.
User avatar
BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

tj wrote: Fri Jul 23, 2021 6:45 pm
BrandonBogle wrote: Fri Jul 23, 2021 4:56 pm I would also do 2% (or more) in your shoes. I'm close and can do 2.25% at $500 after closing costs (but before Amex credit) or 2.375% at $700 profit after closing costs (but before Amex credit). So which am I doing? 2.5% at $4,800 in lender credits bringing my totals after closing costs and Amex credit to $5,300! Plus, this is my 5th refi with Better and I plan to do another in February if I can. Incidentally, if I locked on Tuesday this week instead of weeks ago, I would be another $3,500 cheaper, so probably walking away with this same $5k profit at 2.125% - 2.25%.
is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
Yes. One could use escrow/prepaids to use up those credits. However, in my case, I am doing a cash out (or else I could drop the rate further for the same credits), so I don't have any limit on what I'm getting, up to their $5k can the lender credits itself.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

MichaelAZ wrote: Fri Jul 23, 2021 7:44 pm
tj wrote: Fri Jul 23, 2021 6:45 pm is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
Better limits the cash to borrower to $2K on a non-cash-out refi. If you bump up against that limit, they'll reduce the new loan's principal balance (you don't lose the lender credits). The restriction is set by Freddie and Fannie, but I'm not sure it's $2K, but rather 1% of loan (not certain). But Better limits it to $2K.

They also limit lender credits to $5K. I asked them to improve my pricing on a refi I'm closing tomorrow due to removal of adverse market fee. They agreed to 0.25% ($1100), but my lender credit was already at $4230 so there wasn't room to take the full 0.25%. They offered to let me take $5K in credits on my locked 2.125% rate (i.e. $770 improvement) or to float down 1/8th on my original pricing table and take the full $1100. I opted for the $5K.
It is 1% of the loan amount, up to $2k. So in essence, the lessor of 1% or $2k.
gcc
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Re: Refinance Mega Thread

Post by gcc »

Hello

I have no mortgage on my house and looking to do a cash-out refi, LTV would be about 25% with 250k refi.

I've been working with better - I asked them to match a bankrate offer of 2.5% 30 year fixed 0 points vs the offer I see in their portal with the same terms requires $5,418 in points.

Should be a no brainer, but they declined to match. Reason being that the offers on bankrate require that you already have an existing mortgage balance of at least $10,000....

So I am thinking of a refi at a higher rate where Better pays me a credit of $3,500 (rate = 3.25%) and then just refinancing again at the next opportunity. What is the quickest I could refi again? Twice in 2 days?

Any issues with this?

Thank you
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

My data point with Better from today:

1.875% 15 year fixed. $1350 in credits, $2000 amex bonus, $1800 third party fees. $1540 profit

755k loan, 999k value (I put this, for appraisal waiver- it worked), no escrow, single family home, SF Bay Area suburb

I am moving away from a 2.5% 30 year fixed, I am hesitant to give it up because it seems like that is now unavailable for my scenario. But 1.875 was not available for my scenario back when I got the 2.5% for 30 year fixed, so the market has shifted from in view from great deals on 30 year to great deals on 15 year.
Last edited by Goal33 on Fri Jul 23, 2021 11:13 pm, edited 1 time in total.
tj
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Re: Refinance Mega Thread

Post by tj »

BrandonBogle wrote: Fri Jul 23, 2021 9:43 pm
tj wrote: Fri Jul 23, 2021 6:45 pm
BrandonBogle wrote: Fri Jul 23, 2021 4:56 pm I would also do 2% (or more) in your shoes. I'm close and can do 2.25% at $500 after closing costs (but before Amex credit) or 2.375% at $700 profit after closing costs (but before Amex credit). So which am I doing? 2.5% at $4,800 in lender credits bringing my totals after closing costs and Amex credit to $5,300! Plus, this is my 5th refi with Better and I plan to do another in February if I can. Incidentally, if I locked on Tuesday this week instead of weeks ago, I would be another $3,500 cheaper, so probably walking away with this same $5k profit at 2.125% - 2.25%.
is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
Yes. One could use escrow/prepaids to use up those credits. However, in my case, I am doing a cash out (or else I could drop the rate further for the same credits), so I don't have any limit on what I'm getting, up to their $5k can the lender credits itself.
Are rates not higher (penalties to the rate table,i mean) for "cash outs" ? Why would someone not want their refi to be categorized as a "cash out" ?
Last edited by tj on Fri Jul 23, 2021 11:08 pm, edited 1 time in total.
onamatopeia
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Re: Refinance Mega Thread

Post by onamatopeia »

presto987 wrote: Fri Jul 23, 2021 2:02 pm
onamatopeia wrote: Fri Jul 23, 2021 12:24 pm I have been working with Better and LoanDepot, in a back and forth matching game, that I didn't intend for, but here I am, feeling exhausted and needing advice.

LoanDepot is beating Better with their amex credit, and I'm leaning towards them. The only thing is that their fees are atrociously high, but they're making up for it with a ton of lender credit. Is there anything I should be thinking of? Or am I being paranoid that something else will creep up, or there is a bait and switch waiting for me at the end of the rainbow?

Rate: 2.625%, 30 year conventional (locked on 7/20), approx 577k mortgage

Better: $1284 loan costs - $925 lender credit - $2000 amex credit = delta -$1641
Loan Depot: $2689 loan costs - $4,526 lender credit = delta -$1837

Thank you!
I've used both lenders, and you probably can't go wrong here either way. A few comments:

- LD's high fees don't matter if they're being offset by lender credit.
- Did you send LD's latest proposal to Better to see if they could beat it?
- When comparing the two offers, I recommend excluding section E costs (if you aren't already), because those should wind up being the same regardless of what lender you use. Just look at the costs in D for the loan costs.
Got it! Thank you! Yes, the "loan costs" listed above are strictly from D.

Yes, better end up increasing credits by about $300, and beat LD by $90ish this afternoon. So now we are at the nickle and dime stage. I think I lean LD just because the amex discount is built in and I don't have to wait for it. And supposedly LD services their own loans. So will see what LD comes back with, if anything.

So for anyone thinking no one can match better, there might be lenders out there motivated enough to do it! If you're willing to do the back and forth.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

tj wrote: Fri Jul 23, 2021 10:57 pm
BrandonBogle wrote: Fri Jul 23, 2021 9:43 pm
tj wrote: Fri Jul 23, 2021 6:45 pm
BrandonBogle wrote: Fri Jul 23, 2021 4:56 pm I would also do 2% (or more) in your shoes. I'm close and can do 2.25% at $500 after closing costs (but before Amex credit) or 2.375% at $700 profit after closing costs (but before Amex credit). So which am I doing? 2.5% at $4,800 in lender credits bringing my totals after closing costs and Amex credit to $5,300! Plus, this is my 5th refi with Better and I plan to do another in February if I can. Incidentally, if I locked on Tuesday this week instead of weeks ago, I would be another $3,500 cheaper, so probably walking away with this same $5k profit at 2.125% - 2.25%.
is there no cap on how much cash you can get from the re-fi ? I thought it would be a "cash out" if it was over $2k or something?
Yes. One could use escrow/prepaids to use up those credits. However, in my case, I am doing a cash out (or else I could drop the rate further for the same credits), so I don't have any limit on what I'm getting, up to their $5k can the lender credits itself.
Are rates not higher (penalties to the rate table,i mean) for "cash outs" ? Why would someone not want their refi to be categorized as a "cash out" ?
I’m taking $150k out. In prior refis, if I had an excessive amount credits, then yes, I opted for escrow to avoid the adverse pricing for a cash-out. But I also had a $130k left on the prior mortgage and the lender credits were $1k higher for the same rate if I took out the cash. This positions me to do a rate-and-term refi early next year.
ymmt
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Re: Refinance Mega Thread

Post by ymmt »

Goal33 wrote: Fri Jul 23, 2021 10:52 pm My data point with Better from today:

755k loan, 999k value (I put this, for appraisal waiver- it worked), no escrow, single family home, SF Bay Area suburb
Is your home within that 999k area, or is it way off? I was considering doing this but felt like it would be outright lying.
presto987
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Re: Refinance Mega Thread

Post by presto987 »

onamatopeia wrote: Fri Jul 23, 2021 11:06 pm Got it! Thank you! Yes, the "loan costs" listed above are strictly from D.

Yes, better end up increasing credits by about $300, and beat LD by $90ish this afternoon. So now we are at the nickle and dime stage. I think I lean LD just because the amex discount is built in and I don't have to wait for it. And supposedly LD services their own loans. So will see what LD comes back with, if anything.

So for anyone thinking no one can match better, there might be lenders out there motivated enough to do it! If you're willing to do the back and forth.
I guess the problem is that it sounds like the Better LO is assuming the Amex credit when matching LD. That’s not how it should work. They should be matching on the basis of section D minus lender credit, and the Amex offer should be a bonus.

If they do not, then I would agree with going with LD, as it’s more of a bird in the hand. Plus you retain the option of refinancing again with Better in the near future and getting the Amex credit.
presto987
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Re: Refinance Mega Thread

Post by presto987 »

ymmt wrote: Sat Jul 24, 2021 5:11 am
Goal33 wrote: Fri Jul 23, 2021 10:52 pm My data point with Better from today:

755k loan, 999k value (I put this, for appraisal waiver- it worked), no escrow, single family home, SF Bay Area suburb
Is your home within that 999k area, or is it way off? I was considering doing this but felt like it would be outright lying.
This is not an issue. What Fannie/Freddie are worried about is people overstating the value of a property. Their system will reject property values that appear to be too high based on their models, but I don’t believe coming in too low is ever an issue. Which makes sense, because the reason the property value matters is that the property is collateral in the event of borrower default.
2K2D
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Re: Refinance Mega Thread

Post by 2K2D »

My data point. Locked with Better today. 2.75% with 4,388 in credits. 440k loan value with no appraisal. I’ll net 2,483.
rage_phish
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Re: Refinance Mega Thread

Post by rage_phish »

Wow that’s great

Anyone refinancing loans around $622k

We’re trying to get under 3% without paying anything
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

presto987 wrote: Sat Jul 24, 2021 8:57 am
ymmt wrote: Sat Jul 24, 2021 5:11 am
Goal33 wrote: Fri Jul 23, 2021 10:52 pm My data point with Better from today:

755k loan, 999k value (I put this, for appraisal waiver- it worked), no escrow, single family home, SF Bay Area suburb
Is your home within that 999k area, or is it way off? I was considering doing this but felt like it would be outright lying.
This is not an issue. What Fannie/Freddie are worried about is people overstating the value of a property. Their system will reject property values that appear to be too high based on their models, but I don’t believe coming in too low is ever an issue. Which makes sense, because the reason the property value matters is that the property is collateral in the event of borrower default.
I think my home would appraise in real life for 1.3 million or so. But the rates didn’t look different for the 15 year and the delta in credits from bankrate for the 30 year was the same for both scenarios even though the 1.3 value caused better pricing overall. So I dropped it to 999k and had them match based on that and it updated my 15 year table I believe the same way it would for both stated values.
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

rage_phish wrote: Sat Jul 24, 2021 9:14 am Wow that’s great

Anyone refinancing loans around $622k

We’re trying to get under 3% without paying anything
That should be easy to accomplish for a 30 year or 15. Assuming you’re in the high balance conforming range, and not jumbo for your area.
ymmt
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Re: Refinance Mega Thread

Post by ymmt »

Goal33 wrote: Sat Jul 24, 2021 10:13 am
presto987 wrote: Sat Jul 24, 2021 8:57 am
ymmt wrote: Sat Jul 24, 2021 5:11 am
Goal33 wrote: Fri Jul 23, 2021 10:52 pm My data point with Better from today:

755k loan, 999k value (I put this, for appraisal waiver- it worked), no escrow, single family home, SF Bay Area suburb
Is your home within that 999k area, or is it way off? I was considering doing this but felt like it would be outright lying.
This is not an issue. What Fannie/Freddie are worried about is people overstating the value of a property. Their system will reject property values that appear to be too high based on their models, but I don’t believe coming in too low is ever an issue. Which makes sense, because the reason the property value matters is that the property is collateral in the event of borrower default.
I think my home would appraise in real life for 1.3 million or so. But the rates didn’t look different for the 15 year and the delta in credits from bankrate for the 30 year was the same for both scenarios even though the 1.3 value caused better pricing overall. So I dropped it to 999k and had them match based on that and it updated my 15 year table I believe the same way it would for both stated values.
I’ll have to try this for my next refi. Could’ve saved a couple hundred bucks.
rage_phish
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Re: Refinance Mega Thread

Post by rage_phish »

Yeah seems like getting to at least 2.75% should be easy

Now another question

We are only 3 months into living in our home. Does doing a refi earlier than 6 months hurt the original lender? We used a lender we have a good personal working relationship (he actually save our home sale when our buyers lender fell through).

We won’t refi with him since he’s never the cheapest. But would doing a refi so early lose him money or anything? (Obviously I don’t understand the business side of this aspect)
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

rage_phish wrote: Sat Jul 24, 2021 10:39 am Yeah seems like getting to at least 2.75% should be easy

Now another question

We are only 3 months into living in our home. Does doing a refi earlier than 6 months hurt the original lender? We used a lender we have a good personal working relationship (he actually save our home sale when our buyers lender fell through).

We won’t refi with him since he’s never the cheapest. But would doing a refi so early lose him money or anything? (Obviously I don’t understand the business side of this aspect)
Depends where he works. Usually though, it does cause them to lose their commission. Sucks but it happens.
Goal33
Posts: 2004
Joined: Sun Apr 12, 2015 12:30 pm

Re: Refinance Mega Thread

Post by Goal33 »

ymmt wrote: Sat Jul 24, 2021 10:37 am
Goal33 wrote: Sat Jul 24, 2021 10:13 am
presto987 wrote: Sat Jul 24, 2021 8:57 am
ymmt wrote: Sat Jul 24, 2021 5:11 am
Goal33 wrote: Fri Jul 23, 2021 10:52 pm My data point with Better from today:

755k loan, 999k value (I put this, for appraisal waiver- it worked), no escrow, single family home, SF Bay Area suburb
Is your home within that 999k area, or is it way off? I was considering doing this but felt like it would be outright lying.
This is not an issue. What Fannie/Freddie are worried about is people overstating the value of a property. Their system will reject property values that appear to be too high based on their models, but I don’t believe coming in too low is ever an issue. Which makes sense, because the reason the property value matters is that the property is collateral in the event of borrower default.
I think my home would appraise in real life for 1.3 million or so. But the rates didn’t look different for the 15 year and the delta in credits from bankrate for the 30 year was the same for both scenarios even though the 1.3 value caused better pricing overall. So I dropped it to 999k and had them match based on that and it updated my 15 year table I believe the same way it would for both stated values.
I’ll have to try this for my next refi. Could’ve saved a couple hundred bucks.
Things always depend on the markets and your scenario of course. What I saw is the lower LTV moved the needle big time for the 30 year. Not so much for the 15 year in my scenario. Also crossing the 548,250 line was a big mover, but I’m $200k away from that so nothing there for me.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

rage_phish wrote: Sat Jul 24, 2021 10:39 am Yeah seems like getting to at least 2.75% should be easy

Now another question

We are only 3 months into living in our home. Does doing a refi earlier than 6 months hurt the original lender? We used a lender we have a good personal working relationship (he actually save our home sale when our buyers lender fell through).

We won’t refi with him since he’s never the cheapest. But would doing a refi so early lose him money or anything? (Obviously I don’t understand the business side of this aspect)
Typically if the loan is refinanced before 6 payments are made, the commission a loan officer makes (and profit the lender makes from selling the loan to an investor) is clawed back.

Someone else posted two pages or so ago a similar situation and they reached out to the loan officer to talk about that. They essentially personally reimbursed the guy his commission to avoid any bad blood and proceeded with refinancing since the new loan had much better terms.
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