refinance...again?

[mailmanusa]

I refinanced my mtg about 18 months ago. 30 fixed and I paid points to get a lower rate. Now the rates are considerably lower, it seems to make sense to do it again.

I'll loose the previous bet of paying those points 18 months ago, I understand. But now I can do it again, pay points to get 4% even over 30 years. It seems like a no brainer. 12k less over the life of the loan and $88 a month less in mtg payment.

Eating half of the previously paid points is the only sour part but it still looks like the right financial thing to do now.

Am I thinking right or do some of you need to talk me out of this?

I got 343 months remaining at $1127 a month.

I can sign up for 360 months at $1039 a month. That includes rolling the closing costs into the new balance.

Go for it...right?

 

[Frixxxx]

Go for it...right?

If you can afford the payments, why do it? It really comes down to what you are trying to do.:suspicious:

I can't see WANTING to extend your mortgage payments to save $88 a month and write off 12 grand.....:blink:

If you refinance, you may want to go to a fifteen year loan to get done with it. If you like having a mortgage, then refi.

If you added $50 bucks a payment now, you could recoup that 12 grand before the loan matures to completion.

 

[Scout333]

Mail, How much of a rate decrease will you get? I'm not a big fan of paying closing costs. With closing costs its not "free money". You can, most places get a "no closing cost option" with a slightly higher rate (usually 1/4 to 3/8% higher). Then compare your current payment with the new one. Small part of the reduction is due to extending your payments from 343 to 360 months but most is free money. No points, no closing costs. Will have to pay escrow amounts for insurance and property taxes, etc. You'll get a refund on your current mortgage escrow account assuming you have one. One other option is , tell your current mortgage holder you are going to refinance and ask for a interest rate modification. Won't get as much of a reduction but is generally the least aggravating paperwork-wise , etc. Good luck!

 

[Silverbird]

Also keep in mind, you may have to pay for another inspection depending on when your last one was. And the assesed value right now may not be good news compared to 18 months ago.

 

[Buster]

One thing I have done throughout all my life as a homeowner, is to use the equity I have built up in my home for buying big ticket items like cars, home improvements and watches..(I'm kidding about the watch)

If you can..Find a lending Bank that will set you up on an Equity line that allows you to pay back the loans at 1% of the unpaid balance/month (course you can double up payments to pay it down sooner)..But the key thing is, you can use the interest as a tax deduction if you are filing the 1040 long form (schedule A)..It's better than paying interests to a car loan and getting nothing back..Don't let anybody tell you it's illegal, it's not, it's completely legal....Call it creative financing.

 

[mailmanusa]

The current rate is 4.875. The new rate would be 4.0.

 

[Buster]

The current rate is 4.875. The new rate would be 4.0.

An old rule of thumb when refinancing..If the difference is less than 1%, it ain't worth the costs.

 

[Scout333]

The current rate is 4.875. The new rate would be 4.0.

With the rates you quoted no closing cost option would roughly be 4.5% vs 4.0% you currently have. Probably less than $ 50 month savings. You have a pretty good current rate. Call may depend on how long you plan to stay in this house? Anyhoo, keep us posted on what you decide and why.

 

[mailmanusa]

I'll be in this house for a long time. 20 yrs plus. I went for the refinance. It lowers the cost of the loan in the long term and lowers the monthly payment. That includes rolling in the closing costs. As long as I dont sell for at least 7 years, the closing costs are recovered by the lower rate.

4.0 APR on a 30 year fixed. Never in history has it been that low.

 

[Scout333]

Mail, One other thought. You could keep paying the same payment you are now and it should knock off 4-5 years off your mortgage. Just note apply to principal on your monthly statement/coupon.

 

[jimijr]

I believe that when you refinance, you can deduct all the remaining points, no need now to spread them out over 30 years or the life of the loan.

Anything under 6% is quite good. If you want to get out from under it, just double your principle. It is probably around $2k/yr in the early stages of the loan so doubling it would not be a strain.

Me, I like not owning outright. If the worst happens -- major hurricane, say -- the bank takes the hit not me.

I retire on Dec 31. My pension will pay my bills, the supplement/SS will pay my taxes, and my TSP/IRA will just be for walkin' around money. My plan is very simple as you see.

The details took some thought, like maxing the TSP by October this year so I can pocket some big bucks during the last quarter. The hard part is using zero annual leave this year, whew! I'm counting on a big leave payout next year, so no withdrawl from the kitty will be necessary.

 

[SkyPilot]

I believe that when you refinance, you can deduct all the remaining points, no need now to spread them out over 30 years or the life of the loan.

Anything under 6% is quite good. If you want to get out from under it, just double your principle. It is probably around $2k/yr in the early stages of the loan so doubling it would not be a strain.

Me, I like not owning outright. If the worst happens -- major hurricane, say -- the bank takes the hit not me.

I retire on Dec 31. My pension will pay my bills, the supplement/SS will pay my taxes, and my TSP/IRA will just be for walkin' around money. My plan is very simple as you see.

The details took some thought, like maxing the TSP by October this year so I can pocket some big bucks during the last quarter. The hard part is using zero annual leave this year, whew! I'm counting on a big leave payout next year, so no withdrawl from the kitty will be necessary.

Seems that you have been peeking at my super secret diabolical black box retirement plan. I must check all my systems to be sure that my security protocols have not been compromised :nuts::nuts::nuts:

 

[Mcqlives]

4 on a 30 is great! I just refied again myself and took a 4.25 (on a 15) down to 3.5. This saves me 112 each month so it only takes me 11 months to more than break even on the closing costs. Make sure you take your closing sheet with you at tax time!

If you were having any doubts about jumping in so quickly since the last refi just do the math...$88 x 12 x 30 = $31680. This is just what you save at face value...if you pay early on your principle you save so much more. Why would anyone not do this as long as they were not going to sell in a couple of years? Only thing I saw, without getting specifics, in the posts below, that worries me is the closing costs. Mine were $1200 (including titling and appraisal) and I hope you didn't get ripped! If it is not too late check with the credit unions!