Home refinance or not?

TFinalshot · Feb 12, 2009

LAST EDITED ON Feb-12-09 AT 09:45PM (MST)[p]I've got a conventional load on my home mortgage. I plan to keep the place for a while. Can any of you mortgage guys help with some tips for refinancing? Should we go to a local bank, or an online mortgage outfit, should we just go with the best rate we can find or are there reasons to take a higher rate? And how much lower does a rate have to be before a refi is really worth doing?

Refi's seem popular now and I'm seeing a lot of information floating around, I'm not sure how much of it I trust. What happened to mortgageman, is he still around here anymore?

Anyone else in the business want offer some tips?

deerbedead · Feb 12, 2009

TF,
I know you want info from the pros, and I'm not one, but I've refinanced a few times, so I'm going to offer up a couple things I look for.

I feel like if I can drop about 1% in interest rate it will be worth the hassle of the refi.

My last one I went from a 6.75% 30 year note, to a 5.25% 15 year note. My payment went from $840 per month to $1035 per month, but I cut off 15 years off the back end of the loan.

The other thing I look at is the fees. Some are real cheap and others aren't. Make sure you know what the mortgage man is going to charge to do the refi. They make their money either from you, or from the company that will carry the note, or both.

I'm working on another refi right now, and hope to cut my interest rate down a notch or two. I'm looking at going back to 30 years though to lower my payment and free up more cash. Crazy times make people do crazy things!

Good luck whatever you do.

D13er · Feb 12, 2009

If I were you I'd get an interest only ARM...

great post/pic, thanks for sharing

JB

ramtagless · Feb 12, 2009

TF ? I have been in the mortgage business for 11 years and would be happy to provide advice. Feel free to PM me and I can go into greater detail or we can chat on the phone.

If you can find a good honest broker to work with you will obtain the best terms (interest rate and closing cost). A broker has a huge advantage - they are able to shop a bunch of lenders to find the best loan, given your goal and objectives. A ?retail bank? only has one set of rates that may not be as competitive. The key is finding an honest broker that knows what he/she is doing. Unfortunately there are a bunch of dirt bags (and idiots) in my business.

There truly is no hard and fast rule in regards to how much you need to improve your rate before a refinance will make sense. You simply need to calculate you break even point. What are your total closing cost to obtain the new loan, divided by your monthly savings? If that break even is reasonable and you will be in the home long enough to benefit, then the new loan
(typically) makes sense. A good broker will be able to provide you several options in terms of closing cost and interest rate (the lowest rate is not always the best loan).

I could go on and on, in much greater detail. Shoot me a PM and I will give you honest straight forward advice. If it turns out I can help you, even better. But, I assure you I will not mislead you in anyway.

Thanks - Andy

TFinalshot · Feb 19, 2009

Thanks for the great comments and for taking the time to help me out!

www.tonybynum.com

"Roadless areas, in general, represent some of the best fish and wildlife habitat on public lands. The bad news is that there is nothing positive about a road where fish and wildlife habitat are concerned -- absolutely nothing." (B&C Professor, Jack Ward Thomas, Fair Chase, Fall 2005, p.10).

D13er · Feb 19, 2009

Hey, no problem.

great post/pic, thanks for sharing

JB

eelgrass · Feb 19, 2009

Obama just refinanced the whole country. China didn't even ask to see our W-2 or anything.

rutnbuck · Feb 19, 2009

+ 1 what eel says. What ever eel says just tickles me plumb to death. I hear Texas is having a Pig Hunt. Not sure if it has any thing to do with refinance. But I think it dose.
http://www.msnbc.msn.com/id/29287057/?gt1=43001

D13er · Feb 19, 2009

It's not legal now?? Uh oh.......got any advice for Tmoneyshot???....this is his thread

great post/pic, thanks for sharing

JB

Wiszard · Feb 19, 2009

I agree with Ramtagless. If you go with B of A or Countrywide, they can only sell THEIR product. If you go with a broker, he/she can shop around to everyone in the industry to see who has the best rates/product for you. Make sure whoever you use they show you the estimated buyers statement. This will show you everything you are being charged for. Take that to either another lender who will help you out and explain the fees OR ask the escrow officer who's handling the re-fi to explain the fees. More times than not, the customer doesn't fully understand what they are paying for. You may be hard pressed to find another lender/broker to look over your estimated buyers statement, but it is worth a shot.

Steve

eelgrass · Feb 19, 2009

Hey Rut, California is thinking of doing that too.....with illegal aliens!

Eel

CAelknuts · Feb 19, 2009

For TFinal or anyone else, if you need some assistance with any mortgage advice, I'll be glad to help anyone on here, just as Ramtagless mentioned.

I've been in the mortgage business for 16+ years, and will be glad to help any MM'er out with advice and guidance in dealing with your local mortgage professional with any refinancing needs. Rates for conforming loans, those up to $417,000 are the lowest they've been in any of our home owning years. Depending on where you are, rates are generally available in the high 4's to low 5's. One thing that has happened, and that everyone should know, is that pricing has become more compressed than normal for 30 year fixed rate laons. What I mean by that is, you normally would get a 1/4% discount to your interest rate for each point you pay to buy the rate down. Lately, instead of 1/4%, the discount is often 1/2% for a point and I've seen many days where a point or so can get you as much as 3/4% discount to your rate. If you're going to stay in your house for very long at all, it makes compelling sense to pay a point or point and half to lower your rate. The payback from the monthly savings is commonly 2 1/2 years or less.

I've helped a few of our members with advice over the last few years, and will be glad to continue to do so. Simply PM either Ramtagless or me and we'll be glad to assist you as a courtesy if we can't help you outright.

CAelknuts · Feb 19, 2009

Take
>that to either another lender
>who will help you out
>and explain the fees OR
>ask the escrow officer who's
>handling the re-fi to explain
>the fees. More times than
>not, the customer doesn't fully
>understand what they are paying
>for. You may be hard
>pressed to find another lender/broker
>to look over your estimated
>buyers statement, but it is
>worth a shot.
>
>Steve

A couple comments about this post. First, it is unlikely that you'll find many brokers who'll review your estimated settlement statement, without trying to convince you to switch to them. Second, escrow officers cannot tell you much about the fees, other than what some of them are for, as they are supposed to be a neutral third party. Escrow officers often know when your lender is scr*w*ng you, but they are not supposed to say anyting, so as to maintain their impartiality. I'm sure that Ramtagless would agree that either of us would be glad to review your Estimated Settlement Statement before you sign in order to counsel you as to the type of deal you're getting.

One final comment, if you're going to be staying in your house for longer than a few years, and your loan balance is $417,000 or lower, it makes huge sense to just get a 30 year fixed and be done with it. It DOES NOT make sense to get an adjustable, nor does it make sense to get an interest only loan. 30 year rates are at historic lows, and common sense says that they'll almost always be higher than they are today, probably quite a bit higher for most of the future.

Wiszard · Feb 19, 2009

CAelknuts- Just how low will a lender allow you to buy down your rate these days? Say if the going rate is 5.25%, is it possible to buy down that rate to 4.25%? Thanks.

Steve

CAelknuts · Feb 19, 2009

It gets very expensive to buy the rate down much beyond 4.75% or so. Up until a few days ago, there was a bit of a price spread between 4.875% and 4.75%, so it really made a lot more economic sense to just go to 4.875%. This week, the pricing for 4.75% has closed up some, so you can get that rate for around a point or so. You could probably justify going about as low as MAYBE 4.50%, but the points start getting heavier as you go lower.

If you're interested in specifics, just email one of us and we can give you a sample rate quote. Depending on where you live, one of us may be able to help you, but if not it'll still give you an idea of approximately where your pricing should be with a local broker.

There has been a lot of talk on here lately about the cost of hunts. Consider this example of a current client of mine. His loan is $417,000., and his rate is 6.25 or so. We calculated his new payment, and he'll be saving more than $600. per month. That comes to more than $7,200 in annual savings. Two years of that, and you can pay for a Dall Sheep hunt! The savings would allow you to go on a good mule deer or elk hunt every year if you're not into sheep hunting.

Wiszard · Feb 20, 2009

I appreciate the info on buying down the rate. I figured the price goes heavier and heavier the lower you go. Thanks again.

Steve

isayNUNYA · Feb 20, 2009

Don't worry Tmoneyshot. Obama will bail you out, just let him know you voted for him and you can start skiping your payments.

"I'll keep my Freedom, I'll keep my Money, I'll keep my guns! You keep the change.
---------------------------------------
"I needed a cheesy signature saying like everyone else"

TFinalshot · Feb 20, 2009

LOL, from a guy who lives in a state that's only exceeded in federal welfare transfers by AK and NV. . . The boy who lives in glass house should not throw stones.

If youre a real free market guy, UT is about the last place you could possibly live and claim any sovereignty over welfare. The Beehive state IS a welfare state, you don't have to agree with me, but it is a fact friend. . .

WE, the tax payers keep your state live with in-lue payments, water projects, highway moneys, and have since your dirt was extracted from the Colorado territory in 1896. If you care to test this out, try to get your neighbors and your politicians to send back the federal in-lue dollars, or tell the feds and the state to stop hiring and employing staff to manage our public lands and roads. . . and drain lake Powell . . .

I'm always surprised when a free marketer from the third largest welfare state in the union pops off about bail outs and free money. If you were really upset about it you'd move to a state like Texas. . . Wayne, youre on the tit, that's plain and simple. . .

CAelknuts · Feb 20, 2009

>or tell the feds and
>the state to stop hiring
>and employing staff to manage
>our public lands and roads.
>. . and drain
>lake Powell . . .
>
>

OK Tony, I'll bite. I may be slow, so please explain to me how draining Lake Powell is in the national interest? Please!