Author Topic: Worth free refinance but small rate change??  (Read 1002 times)

TheAnonOne

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Worth free refinance but small rate change??
« on: January 04, 2021, 08:25:23 AM »
Team,

I can go from 2.75(great rate) to a 2.6 for "free" due to the amount of lender credits.

Is there any reason to not do this? Most information tries to say you should at least drop "1%" or some other measure that seems picked out of thin air.

The only negative I can find is just the hassle of a refi, for 50-60 bucks a month.

CptCool

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Re: Worth free refinance but small rate change??
« Reply #1 on: January 04, 2021, 08:58:20 AM »
If you don't mind the hassle of providing documentation and following up with the lender, then go for it. The only downside is time (and it doesn't take all that long)

joe189man

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Re: Worth free refinance but small rate change??
« Reply #2 on: January 04, 2021, 09:08:49 AM »
if you are going to stay in the house for a while i see no reason not to refinance and save that cheddar

TheAnonOne

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Re: Worth free refinance but small rate change??
« Reply #3 on: January 04, 2021, 09:32:57 AM »
if you are going to stay in the house for a while i see no reason not to refinance and save that cheddar

Yeah... other option being going from 2.75-> 2.5 for "$2,250" which saves $59 /mo in payment but $100 a month in interest.

Not sure what is more important, interest savings or cashflow but that option looks to be 22 -> 36 months to break even.

RedmondStash

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Re: Worth free refinance but small rate change??
« Reply #4 on: January 04, 2021, 11:17:01 AM »
I see no reason not to.

People like to espouse mathematical formulas for financial decisions, but they're generally rule-of-thumb things, and sometimes based on circumstances that don't apply in your situation.

If you can create your own formulas in a spreadsheet and calculate both monthly payments and overall payments, and it's advantageous, and you're willing to invest the time, why not? It really all comes down to the numbers.