Mortgage Refinance Advice

[cincystache]

Currently 1 year into a 30 year mortgage with my local credit union.
3.625% 158,000 principal left, house is worth 200k

Is it worth it to refinance?
Current offering at the same credit union is 3.25% (3.434%APR) 30yr fixed
Is the delta between 3.25 and 3.434 representative of the closing costs?

Are there other recommended lenders out there with better rates with preferably minimal or no closing costs?

[RWD]

Whether it is worth it depends on what the actual closing costs are and how long you will keep the mortgage.

[mozar]

The rule of thumb is to wait until the rates drop 1%. So 3.6% to 2.6% in your case. It is more beneficial to refinance early in your mortgage career than later so keep an eye on this.
You can ask the bank what all the fees and closing costs are.
There are tons of lenders out there. Each one can give you a list of their fees.

[tweezers]

I'm not sure that a 1% decrease is a rule of thumb actually...I recall it being 0.5, but it will depend on the costs for the loan and your specific loan details.

I just started a 30-yr conventional refi through better.com with a 30-yr fixed at 2.75% with no points (advertised through zillow.com).  I withdrew from that process to lock in 2.5% with a local back (Bank of the Pacific).  I think you can do much better than what your local credit union is offering if you look around and have good credit. 

https://www.zillow.com/refinance/#/

[cincystache]

@tweezers I looked up rates on the link you shared and got back 3.25% as the lowest available. It's not clear to me what drives that delta. We have top notch credit, I'm curious what other factors are relevant.

[Cranky]

I dunno but we’re buying a house with dd and her mortgage from a credit union is locked in a 3.0%, so I’d shop around some more.

[simonsez]

If you recently refinanced a year ago, see if you can get a house appraisal waiver.  That should save a couple hundred bucks from the closing costs if you haven't done so already.

But ya, right now I would think you can do 3.000 or 2.875 for 30 yr fixed with no points at minimum, just matters on the closing costs.

[JLee]

I got an offer at 2.5% two weeks ago - I would shop around.

[ender]

But ya, right now I would think you can do 3.000 or 2.875 for 30 yr fixed with no points at minimum, just matters on the closing costs.

I talked to a lender today that was going to be $2300 closing costs for a 2.875/30 year.

No points, minimal costs associated with closing.

Considerable better than OP (I'm refinancing from 3.25% myself!).

Would pay back very quickly for OP (1 year) for the same closing costs.

[tweezers]

Sorry cincy...not sure why your rate offerings are so high.  If that's the best you can get, you'll have to sit down and so some math on the costs and whether it worth it given your circumstances.  There are a lot of refi calculators out there.  Because I'm lazy (and because I think it does a good job capturing the total costs/savings given the period of the existing vs. refi loan period), I also use the one on Zillow.  Good luck.  I hope you can find a better rate than 3.25%.

https://www.zillow.com/mortgage-calculator/refinance-calculator/

[JLee]

Anyone who's not rate-locked now might be screwed -- https://www.cnbc.com/2020/08/13/mortgage-refinancing-more-expensive-as-fannie-mae-freddie-mac-raise-fees.html

I probably just burned a $495 appraisal...the rate I was told two weeks ago is gone by a significant margin with effectively no notice.

[NextTime]

I'm in the middle of refinancing to 3.0% from 3.95% at sofi.  They waived the appraisal and accepted the Zillow estimate, which shocked me, but I'm happy to take it.
Best thing is, I put only 5% down on my home just over 3 years ago, and the Zillow appraisal put me slightly over 80% LTV. So by throwing an extra $1,300 on the principal, I also eliminated the PMI.

My break even on the closing costs is 9-10 months, and I will be saving approximately $275/month on the payment.