Refinancing

riptides · Mar 12, 2003

Spencer

I would shop around. Try bankrate.com or some other internet sites for rate searches. I just refinanced a while back, that is how the B7800 showed up!

Anyway, I thought long and hard about it, but one thing stuck to me on all the advise given.

"What is your risk of losing out, if the rates go UP?" Yes they MAY drop yet again, but what are you losing in the meantime?
Just HOW much will you save by a 1/2 percent?

Take the CASH and run.....

Wrong person replied to, sorry.
-Mike Z. /forums/images/graemlins/cool.gif

BigDave · Mar 12, 2003

Spencer,

I think you should refi with the current company if the costs are significantly lower. They vary greatly between states and even localities, so I have no idea if a grand for closing costs is a good deal or not. You can find some lenders online to determine loan closing costs & call a local title company to get an estimate of fees. Add them up, and that's what refi with a new lender will cost. You might get stuck with an escrow account, and if so, that may mean a lot of money out of pocket although it's money you will have to spend eventually anyway. Anyway 6 months to recoup closing costs sounds like a no-brainer - I would go for it. /forums/images/graemlins/wink.gif

We are currently in the refi process, 15yr jumbo at 5% w/ 3/8 pt buy down. My current mortgage company counter offered with 5.25% & 0 points and 0 cost. It's a good deal, but due to the complexity of a 1st & 2nd mortgage & the jumbo status, it still will be cheaper to do a complete refi. Our closing costs will be about $3300. The amazing part is that we will save $8000 in interest the first year...of course the downfall is that our tax bill will go up $3000. /forums/images/graemlins/crazy.gif

Good luck. /forums/images/graemlins/smile.gif

19th_VA · Mar 13, 2003

That leaves you $5,000 in the black!

Mosey · Mar 13, 2003

You don't have to find the best deal, just find one that will make an improvement. I didn't do much work or spend much time and I got some cash and reduced my payments by a few hundred dollars. It was basically free money for no work. I refinanced last fall with 5th 3rd bank. They do not resell the their loans. The original loan with another company was sold within months to Bank of America. Shortly after that I had to hassle with them about whether or not my house was in the flood zone. They said it was determined to be in and it was up to me to prove it isn't. I had to deal with them over the phone and by mail and faxes. Now if I need to deal with my mortgage company, I just drive over and talk to them at 5th 3rd bank.

Spencer · Mar 13, 2003

( ...of course the downfall is that our tax bill will go up $3000. /forums/images/graemlins/crazy.gif )

Why would your tax bill go up if there was no change in ownership?

19th_VA · Mar 13, 2003

Sorry to answer for you, Big Dave. Spencer--because he's deducting $8,000 a year less in interest off his taxes. in a 35% tax bracket, that's about $3000 more in taxes.

WVBill · Mar 13, 2003

Lower interest payment = lower itemized deduction for interest = higher adjusted gross income = higher tax payment.

Spencer · Mar 13, 2003

( Sorry to answer for you, Big Dave. Spencer--because he's deducting $8,000 a year less in interest off his taxes. in a 35% tax bracket, that's about $3000 more in taxes. )

Thanks for clearing that up, I just assumed he was talking about property taxes.

BigDave · Mar 14, 2003

No need to apolgize, I couldn't of said it better myself. $5000 in black is why I'm refinancing. /forums/images/graemlins/grin.gif

The only downside is that the $3000 is out of pocket, while the $8000 is equity that is unrealized until I sell my home. I'm just thinking of it as a long-term savings program where I put away $250 in cash and I'm getting $667 in home equity. Not a bad deal. /forums/images/graemlins/wink.gif Of course, I'll build up equity much more quickly and will be able to borrow against it if a need arises.

Spencer · Mar 30, 2003

We signed the papers this last Friday. The agent at the title company said that she had not seen such a good refinance deal before. It cost us $988 but only $26 of that went to the mortgage company ($10 for tax service fee and $16 for courier service). We will make up the $988 in less than six months and we will save over $30,000 in the long run. The whole process couldn't have been easier. I will be saving $174 each month which almost covers my $200 tractor payment. /forums/images/graemlins/grin.gif