Mortgage question

[Blackjack200]

By my math APR on a 3.875% loan would be ~ 3.945%.

((0.03875/12) + 1)^12

Unless I'm crazy...

The answers here are actually wrong in some cases. Some banks will reamortize your loan if you drop a large principal payment in your mortgage account.

Holy cow, I never knew that. I'll have to call my bank and ask if they do this.

 

[Tweak155]

People on this board will always say if you cannot put 20% down you cannot afford a house. They are wrong.

VA loans are great for those that qualify. So are the 0 down USDA loans.

Technically they're not wrong, as the bank can afford it but you can't

 

[Tweak155]

actually that might have been the APR. i just checked my mortgage stuff and the interest rate is 3.875% so i'm not sure where i got that other number from, maybe it was the APR.

Sounds decent. When we bought our first house in 2012 we were able to get 2.75% on a 15yr (which is what we went with) and 3.5% on a 30yr but that was with 20% down.

 

[Apple Of Sodom]

Yes, depending on the mortgage company. It is called reamortization and you just have to ask. My mortgage allows a reamortization for free then charge a small fee each time I do it. Basically, they don't want you to put down an extra thousand bucks and reamortize the loan. They do realize that some people may get a windfall and wish to do this to the loan.

tl;dr - most likely, just ask them what the terms and costs are for reamortization.

 

[UglyCasanova]

The term is "recasting" and some allow it and others don't, and there will probably be a minimum amount in order for them to do it. Note also that this is going to be up to the servicer of the loan (pretty sure) which more often than not isn't the originator where you applied.

 

[RearAdmiral]

actually that might have been the APR. i just checked my mortgage stuff and the interest rate is 3.875% so i'm not sure where i got that other number from, maybe it was the APR.

That's still generally a pretty good APR, I feel like the difference between the interest rate and APR is a little high though. The difference is coming from somewhere you are getting charged. I'm not an expert but it might be worth looking into.

Either way still a good APR!

 

[purbeast0]

That's still generally a pretty good APR, I feel like the difference between the interest rate and APR is a little high though. The difference is coming from somewhere you are getting charged. I'm not an expert but it might be worth looking into.

Either way still a good APR!

well i don't know where i got the 4% number from, it could have been me just making a number up lol. it was like 18 months ago. i really have no clue what the apr is. it's not listed on the web portal either.

 

[RearAdmiral]

well i don't know where i got the 4% number from, it could have been me just making a number up lol. it was like 18 months ago. i really have no clue what the apr is. it's not listed on the web portal either.

Okay. Just something to think about. It should be on your closing docs I think.

 

[UglyCasanova]

Okay. Just something to think about. It should be on your closing docs I think.

There are 2 docs, the HUD-1 and the TIL that you would use to figure out why your APR is what it is. In a perfect world the APR represents the true cost of that loan to you which includes interest plus the various fees and mortgage insurance that you would pay, and give you the ability to shop around on an even basis to find the best real price.

Alas, this isn't a perfect world and mortgage law is some of the most nonsensical convoluted mess our government has ever cranked out. As a result the APR has less meaning than maybe it should (various things are left out of it), many in the mortgage industry itself have a hard time grappling with it much less the end borrower, and itself has become just another meaningless compliance cost that you ultimately pay for.

Now with Dodd Frank in place the CFPB is trying to correct some of this and make some of the regs work more harmoniously with each other (RESPA and TILA), but we all know how the government fixes things.

 

[rh71]

Anyone else maintain an escrow balance and gaining interest back on it? We're getting 2% in NY from Wells Fargo which isn't bad considering the rates out there. I also heard not all banks are willing to do this and the rate depends on the state. Every quarter we're getting a free whopping $20. Doesn't seem like a lot until you look at your interest earned from your regular savings accts.