Author Topic: Worth it for us to refinance?  (Read 3007 times)

LipFoliage303

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Worth it for us to refinance?
« on: February 19, 2015, 10:36:23 AM »
Wife and I bought a permanently affordable home in Boulder about a year ago. Our current mortgage is with our credit union, so we called to ask about refinancing. They got us a quote the same day. Interest rate of 3.875% and would save us $78 a month. We can put that $78 right to my wife's student loan which is at 6.8%.

The mortgage balance is $101,300 and the refinancing costs ($2500) will be rolled into the loan. This means we'll be "even" in about 3 years. Is it worth it to make this move?

I called the bank and left a message asking if any of these fees are negotiable since we just went through this routine a little less than 12 months ago. Haven't heard back.


JasonS

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Re: Worth it for us to refinance?
« Reply #1 on: February 19, 2015, 11:37:48 AM »
Your credit union has no incentive to give you the best rate, they already have your business.  I'd shop around, then see if your credit union can match the rate and terms. 

Gone Fishing

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Re: Worth it for us to refinance?
« Reply #2 on: February 19, 2015, 11:40:39 AM »
You can't just focus on the monthly reduction in payment because you are probably stretching the length of the loan by a year as well. What is your current rate?  Do you have PMI?

Argyle

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Re: Worth it for us to refinance?
« Reply #3 on: February 19, 2015, 12:28:52 PM »
When I was refinancing, my credit union did not have a good rate.  You should definitely look further afield.  I'm seeing rates as low as 3.00% out there.  That would save you a non-negligible amount of money. Don't extend the life of the loan, either.

RH

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Re: Worth it for us to refinance?
« Reply #4 on: February 19, 2015, 12:30:50 PM »
We refinanced with Amerisave.com . Very simple process. Paid no closing costs and got a silly low locked in rate.
 

Comp281

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Re: Worth it for us to refinance?
« Reply #5 on: February 19, 2015, 12:33:57 PM »
As suggested above, I would shop around. I recently locked in a 15 year refinance at 2.5%. Our current 30 year mortgage (27 years remaining) is 4.375. So my monthly payment will go up slightly, but the loan duration is reduced dramatically as well as the amount of interest owed.

LipFoliage303

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Re: Worth it for us to refinance?
« Reply #6 on: February 19, 2015, 12:43:47 PM »
Thank you for the responses. We appreciate it.

The CU rep called me back and said the title fee is a flat rate and that they'll charge the exact cost when they get that figure. So we'll see. He also said he'd submit a request to reuse our appraisal from 11-12 months ago. Not promising, but I suppose there is a chance there. I also told him we saw yesterdays big news - feds aren't increasing rates. He said he'd "run the numbers" again today and get back to me with a new quote.

Our current rate is 4.625% and we have PMI.
The last quote does not have PMI. Not sure how it went away.

Wife and I plan to live here for 8 more years and then purchase a market rate home. Why 8 years? My PSLF (public service loan forgiveness) will eliminate my student loan and we'll have wife's student loan gone in just 4-5 years. As I said in OP, this reduction in rate will go towards wife's student loans. We're currently throwing more than $3000 a month to her loan, so this $80 a month is not a game changer.

I will contact two other banks and see what they can do. Thanks for the suggestion/nudge to do so.

I see a new post - RH - how do you not have closing costs?

RH

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Re: Worth it for us to refinance?
« Reply #7 on: February 19, 2015, 01:40:17 PM »
"how do you not have closing costs?"

Ask for a lender credit of $2,500 and see what the interest rate would be. They'll charge a slightly higher interest rate to cover the  $2,500 closing costs.

Gone Fishing

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Re: Worth it for us to refinance?
« Reply #8 on: February 19, 2015, 02:04:36 PM »
Getting rid of the PMI is almost always worth it!