Mortgage Refinance

[FreedomHawk]

Wondering if this makes sense to refi:

Current Mortgage:
Term: 30 Year (360 Months)
Remaining: 298 Months
Original Loan Amount: $405,900
Principal Balance Remaining: $366,400
Estimated Home Value: $576,000
Rate: 4%

Did a quick check at AIMloan.com:



Using www.calcxml.com, I get the following results but I'm not sure if I entered the fees correctly. I used $3054. If I include the Prepaids and Initial Escrow deposit, it's a bit more ($7917).

I like this calc because it includes the "Enhanced Refinance" which assumes you'll pay a monthly amount that pays off your mortgage in the same amount of time as your existing mortgage. I would actually do "Enhanced Plus" where I would pay the same monthly payment as my original loan.

[BogleBoogie]

You would be lowering your rate from 4% to 3.125%? That seems like a no brainer for me, yes.

[katrid11]

What are the fees to do the enhanced refinance?

Do you still escrow? Can you use the refinance to get out of it?

To drop from 4 to 3.1% is a no brainer especially if the breakeven point is less than 24 months. I just refinanced and my breakeven point was 10 months.

[dsmil]

Yes, going from 4% to 3.125% is a good idea. You would be paying this mortgage for another 5 years so you could alternatively see if you can get a 25 year mortgage. I agree with you counting $3k of fees. The prepaids/escrows shouldn't count in that calculation.

If your credit score is good, you should be able to find an even better deal. When I locked in earlier this week, 2.875% was the rate offered with close to zero lender fees and 3% had a $2,500 lender credit attached (https://www.keystonefunding.com/). If you are able to find that same deal at 3%, your refinance becomes free.

[FreedomHawk]

Yes, going from 4% to 3.125% is a good idea. You would be paying this mortgage for another 5 years so you could alternatively see if you can get a 25 year mortgage. I agree with you counting $3k of fees. The prepaids/escrows shouldn't count in that calculation.

If your credit score is good, you should be able to find an even better deal. When I locked in earlier this week, 2.875% was the rate offered with close to zero lender fees and 3% had a $2,500 lender credit attached (https://www.keystonefunding.com/). If you are able to find that same deal at 3%, your refinance becomes free.

Awesome. Great info. Thanks a million.

[BrandonBogle]

Yes, $3,054 is the right figure to use. The offer is good and I would proceed if you don’t find an offer that doesn’t include that $995 origination fee, or includes lender credits to offset that of more. So essentially, get those closing costs to $2k or less.

For the size of your loan, that should be doable (assuming good credit). The Refi Mega Thread has plenty of recent offers and comments about the process, so it’s a good place to check for other lenders to try as well.

[FreedomHawk]

Just spoke with keystonefunding. I got this quote:

Your Mortgage Details
Loan Purpose: Refinance - Rate & Term
Loan Program: Conf 30 Year Fixed
Home Value: $575,000.00
Loan Amount: $367,735.00
Interest Rate: 2.875%
Lender Credit: $-3,000.00
Cash to Close: $-25.40

Looks pretty good to me.

[BrandonBogle]

Just spoke with keystonefunding. I got this quote:

Your Mortgage Details
Loan Purpose: Refinance - Rate & Term
Loan Program: Conf 30 Year Fixed
Home Value: $575,000.00
Loan Amount: $367,735.00
Interest Rate: 2.875%
Lender Credit: $-3,000.00
Cash to Close: $-25.40

Looks pretty good to me.

Lock the rate, pat yourself on the back, and call it a day!