Author Topic: Refinance - Am I missing something?  (Read 1914 times)

almondjoy22

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Refinance - Am I missing something?
« on: April 06, 2015, 04:22:53 PM »
Here's the scoop. I purchased my home in November 2014 @ 4.25% interest. I'm carrying PMI of $201.24/month at this rate. Total payment $2,648.75 broken into P: $542.35 It: $1,373.76 Escrow: $732.64 (impounded insurance/property tax/PMI).

I just did a quick look and I can get a 3.75% refinance today for $231.34 closing costs broken down as below. New payment $1796.35 + PMI.  PMI on this loan is $174.55 on 80-90% LTV and $232.73 on 90+% LTV. I'm currently flirting very closely with the 80-90 rate, depending on appraisal.

It appears that going forward with this would save me either $88.27/mo or $146.45/mo.

Looks like a no brainer to me, am I missing anything?

Processing Fee    $199.00
Points or (Lender Credit)    ($1,675.66)
Total Guaranteed Lender Fees    ($1,476.66)
Appraisal    $500.00
Credit Report    $13.00
Title Services    $1,195.00
Total Estimated Third Party Costs    $1,708.00
TOTAL: $231.34

velocistar237

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Re: Refinance - Am I missing something?
« Reply #1 on: April 06, 2015, 04:57:02 PM »
This total is from the Good Faith Estimate?
Do you have some cash to pay into the property if your appraisal comes in low?
Try a calculator if you haven't already: http://mtgprofessor.com/calculators/Calculator3a.html

almondjoy22

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Re: Refinance - Am I missing something?
« Reply #2 on: April 06, 2015, 05:11:45 PM »
Yeah from the GFE. I have cash available but hopefully I do not have to use it. I have it earmarked for building my rental guest house that my zoning allows for.

Also, I fully expect the appraisal to be higher than existing based on the comps in my neighborhood.
« Last Edit: April 06, 2015, 05:14:34 PM by almondjoy22 »

velocistar237

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Re: Refinance - Am I missing something?
« Reply #3 on: April 06, 2015, 05:43:07 PM »
It does seem like a no-brainer, but also too good to be true. Why would your total origination cost less than the appraisal? What's the source of these ~$3000 in credits? Why is the "Total Guaranteed Lender Fees" negative?

Grateful Stache

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Re: Refinance - Am I missing something?
« Reply #4 on: April 06, 2015, 07:09:02 PM »
We just did a similar deal, but without the PMI. Many low/no-cost refinancing options are available, and it was much easier than the initial closing. If it adds up, then go for it!

Retired To Win

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Re: Refinance - Am I missing something?
« Reply #5 on: April 06, 2015, 08:10:39 PM »
It does seem like a no-brainer, but also too good to be true. Why would your total origination cost less than the appraisal? What's the source of these ~$3000 in credits? Why is the "Total Guaranteed Lender Fees" negative?

Because the lender wants the business, and is likely to "flip" the loan as soon as it closes for an upfront fee and have the capital right back in hand again to do another deal.  And the transaction will be profitable.