Home refi questions :)

ezbtr

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I have a 3.5% 30 yr fixed, but I still have PMI, which is another 1.3% ($220 per mo) Im told - I can get a 30 yr fixed 4.375% and save $141 a month, anything sound nuts here? In 18 mos when my CS is done, I'll def refi to a 15 yr at 3.375% with $280 a month more, Thanks guys :)
 

tpenfield

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Well depending on the amount of the loan and if the higher interest loan has no PMI, then maybe. . . You should do the math yourself to verify though, rather than get sold a bill of goods.
 

jbcurt00

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And dont forget to add mortgage origination, points and any other fees when you do the calcs.
 

gm280

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Always, always run such decision through amortization schedules/formulas and see what the totals are for each way you can go to determine if one is saving more total outlay of your money. Problems with doing that is if you are making future plans to change situations down the road. Then that skews the results... Any time you can avoid PMI you are a winner because that monthly money buys you nothing, Zero, Nada... And always plan on the very worst case scenarios in everything concerning mortgages. Then you are in the clear when that doesn't happen as worst case.
 

redneck joe

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yes do not forget overall costs for origination loans - they don't do this for free.

I have a 30 year fixed, but am self amortized on a 12 year, and am 4 years into that and if my company stock stays where it is or better we'll be selling that when avail and be out of the house in three or less.

I like to know that if it hits the fan for us work wise, I can go back to the lower payment as needed. I do not think, in my case, that the rate saving between the 15 and 30 makes a material difference.
 

southkogs

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And also consider your current load and the equity you have in it: If your current provider will drop the PMI based on the equity you have in your loan, then you're probably better off staying put.

DISCLAIMER: I am not a mortgage professional, nor do I play one on TV :) Consult your local mortgage dude for professional advice.
 

bruceb58

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What is the principal balance on your loan?

Assuming you have a $200K loan, Your current interest is $7k/year and PMI is $2.6K /year

With the 4.375% interest, your yearly interest is $8.8K/year. Difference is around $800/year plus whatever tax savings you get since you can't deduct PMI.

Your monthly savings you have calculated is actually more than you would actually be saving because you are comparing a new 30 year loan to an existing loan which is 30-(years you have had the loan). If you have had a 30 year loan for 5 years, you actually have a 25 year loan so comparing a 30 year loan to a 25 year loan is apples and oranges.

The big question with waiting for the 15 is, what will interest rates be doing in 18 months.
 
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aspeck

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Bruce, I just went through that same argument with a friend ... they told me they were saving $160 per month if they refied. I told them I doubted it and went to my amortization table to show them how much they would be paying OVER THE COURSE OF THE LOAN for the refi verses if they just kept paying at the higher current rate. They found my argument hard to swallow at first, but when seeing it in black and white and understanding we were talking about 30 more years instead of the existing 25 years ... then I showed them what a difference it would make if they paid an additional $50 a month in principle each month, or even just and additional $25 in principle, I even went to $10 a month additional principle, and they were shocked at how much they would "Save" (not pay the bank). They decided to "suck it up" and pay the additional principle when they could ...

Not saying you SHOULD NOT refi ... just make sure you are comparing apples to apples when you do your figuring, and make sure you know the TOTAL cost of the transaction (points, fees, and total interest to be paid over the course of the loan). The total cost is what you want to look at with the refinance ...
 
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bruceb58

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Bruce, I just went through that same argument with a friend
I know! Some how people can't figure that part out.

For example, not that you wanted to do it, you could have paid off your loan for 5 years and do a refi at the exact same interest rate and lower your payment. Of course you have just converted your 25 year loan to a 30. Of course you will lower your payments if you lengthen a loan!

Heinz, if you are really going to go to a 15 year loan in 18 months, I would just do that and not do the 30. I gave you my loan guy's info to you a while ago. Personally, I would do the 15 right now and suffer for 18 months with the larger payment.
 
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ezbtr

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Im going to clean up a few credit dings (ambulance bill from accident that workers comp should have paid), get my score up, then see what I can do, I did get a quote for 4.375% fixed 30 yr, no PMI, vs the 3.5% 30 yr fixed FHA with PMI ,saving $140 a month, but it would bump up my loan by approx $4000 and a $450 charge
 
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bruceb58

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4.375% sounds awfully high for a 30. Should be able to get under 4% 0 points with a 740 or better FICO.

Again, you do understand you are turning a 25 year or so mortgage into a 30 and that is a portion of why the payment is lower right?

is the $4K points and title charges?
 
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rogerwa

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I just refied and was able to get 3.125% on a 15 yr. Coming from a 5% on a 30 year, my payment was not all that much more. If you are a costco member, they have a program thats pretty good. I was very pleased with the closing costs and the origination fee was $398.
 

ezbtr

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I just refied and was able to get 3.125% on a 15 yr. Coming from a 5% on a 30 year, my payment was not all that much more. If you are a costco member, they have a program thats pretty good. I was very pleased with the closing costs and the origination fee was $398.
thats awesome!! as soon as my credit gets back to normal, it should go much better for me :rolleyes:
 

bruceb58

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(ambulance bill from accident that workers comp should have paid)
Not that it's relevant to Refi but why didn't your health insurance or your company pay for that since it happened at work?
 

ezbtr

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Not that it's relevant to Refi but why didn't your health insurance or your company pay for that since it happened at work?
it is relevant, WC should have paid it, but they stink at times, I told them, they missed it - thus it got put on my credit report w/o me knowing
 

aspeck

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it is relevant, WC should have paid it, but they stink at times, I told them, they missed it - thus it got put on my credit report w/o me knowing

With documentation to the companies involved you should be able to get that off your score. I have worked with others in similar matters. It won't be easy and will involve a lot of phone calls, faxes, and pushing, but it can be done if it was truly the fault of the insurance company.
 

bruceb58

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it is relevant, WC should have paid it, but they stink at times, I told them, they missed it - thus it got put on my credit report w/o me knowing
I meant relevant to our refi discussion.

Did you get a bill? This should be easy to get off. It has been paid right?
 

ezbtr

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Not that it's relevant to Refi but why didn't your health insurance or your company pay for that since it happened at work?
They goofed, I sent WC the bill, now I have a call into the hospital billing dept to straighten it out
 
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