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Mortgage rates at all time low

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A guy I work with is looking to refinance. I hope he can get into a 15 year with no points without getting too close to PMI.

I really wanted to jump on these rates, but it doesn't make sense to me. By the time I refinance, if I were to pay off my house at the estimated rate, it may save me a maximum of $1200 in interest after fees.

I wish I had my current home paid off/down, I might be willing to trade up to a bigger place. We're still shredding through school debt at the moment so we can't make a move. I hope the rates don't shoot up too high in 4 years.
 
Pulled trigger on my new house. 30 yr, 3.85, 20%, no points. It's absolutely AMAZING what the amortization tables look like.
 
spidey07 said:
Yeah, that's what finally woke my broker up when I started rattling off numbers given by my credit union. Deal got MUCH better, REAL quick.
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Stay away from brokers and big banks.

In general small local bank (with good reputation) or a credit union is much better.

The biggest problem with brokers is
a) 99% scumbags and VERY few good ones
b) in most cases you won't know who your bank is until closing (if you care, I do)
c) too many use bate/switch tactic

I just tell people to stay the hell away/get rid of the middle man
 
mariok2006 said:
Can someone explain what points are and their purpose? A link would be great.
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Points are basically you paying a percentage of the interest up front. It makes your loan rate "seem" lower, when you're really just being scammed. 😛

Typically, 1 point = 1% of the loan amount. So a mortgage of $100k would cost you $1,000 per point due at closing. Most people trying to refinance would typically roll that up into the loan amount and end up tacking it on with the closing costs. If the loan beats the terms of your current mortgage, you can do that and still come out saving a lot of money.
 
Scarpozzi said:
Points are basically you paying a percentage of the interest up front. It makes your loan rate "seem" lower, when you're really just being scammed. 😛

Typically, 1 point = 1% of the loan amount. So a mortgage of $100k would cost you $1,000 per point due at closing. Most people trying to refinance would typically roll that up into the loan amount and end up tacking it on with the closing costs. If the loan beats the terms of your current mortgage, you can do that and still come out saving a lot of money.
Click to expand...

Yep, in general it's best not to pay points.

Note: new Fredie mac regulations force banks to charge .25 points if your value/loan ratio is above 75%

I just refinanced at 4.25% fixed 30 years .25 points (little above that 75% mark)
 
highland145 said:
http://www.bankrate.com/finance/mortgages/mortgage-points.aspx

http://www.bankrate.com/calculators/mortgages/mortgage-point-adviser.aspx
Click to expand...

Scarpozzi said:
Points are basically you paying a percentage of the interest up front. It makes your loan rate "seem" lower, when you're really just being scammed. 😛

Typically, 1 point = 1% of the loan amount. So a mortgage of $100k would cost you $1,000 per point due at closing. Most people trying to refinance would typically roll that up into the loan amount and end up tacking it on with the closing costs. If the loan beats the terms of your current mortgage, you can do that and still come out saving a lot of money.
Click to expand...

Thanks guys.
 
Once you lock in your rate and move forward, if the rate drops more can you readjust or would you be stuck at that rate without starting over?
 
JTsyo said:
Once you lock in your rate and move forward, if the rate drops more can you readjust or would you be stuck at that rate without starting over?
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Once you lock you can't readjust, but some banks do allow that or ask for a fee if you want to.

Basically you are stuck with that rate. Good if it goes up, bad if it goes down.

In general .125 to .25 is not that big of a deal...
 
A year ago we got 4.5% for 30 years. We thought it was a great time to sell --> buy (upgrade) houses because of the rate... now it just keeps getting better.. but of course homes sell for less now too. I think we could've had this house for at least $30k less now. Old house would've also sold for that much less.
 
rh71 said:
down payment to avoid PMI.

3.85% is crazy good. It's sick that the housing market is still in the shitter though. People want to rent instead because of job instability.
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Jesus.... That would be like having 40 grand laying around for me.

Not an option. I don't think I could really re-fi based on closing costs and such.
 
rh71 said:
down payment to avoid PMI.

3.85% is crazy good. It's sick that the housing market is still in the shitter though. People want to rent instead because of job instability.
Click to expand...

My neighbor is going to rent his paid for house out and use the 1500/month rent to buy a home 4 times bigger because of the rates so low. So his renters would be paying for his house that's much bigger and nicer.
 
spidey07 said:
My neighbor is going to rent his paid for house out and use the 1500/month rent to buy a home 4 times bigger because of the rates so low. So his renters would be paying for his house that's much bigger and nicer.
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I've actually been thinking of renting out my place(walking distance to Harvard and MIT) for around $3.5k/month and buying or renting another place.
 
AMDZen said:
Jesus.... That would be like having 40 grand laying around for me.

Not an option. I don't think I could really re-fi based on closing costs and such.
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well people have that money from many sources... could be if you're upgrading to a house, what you've sold gives you some cash. You could borrow short-term from close relatives. Could be from gambli... errr.. the stock market/"investments". Could be from dual income savings. But yeah if you've always rented, you've been throwing money out the window. I did re-fi for no closing costs once that only required signatures and a notary... but I'm sure costs were built into the new loan somehow... those sneaky bastids. I didn't pay "out of pocket" though and I still made out better of course.

spidey07 said:
My neighbor is going to rent his paid for house out and use the 1500/month rent to buy a home 4 times bigger because of the rates so low. So his renters would be paying for his house that's much bigger and nicer.
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he's gotta have a place to stay in the meantime no? Or is he fronting the money first?

Having incoming rent money is nice... we could rent out our finished basement for at least $1k/mo. around here, but it's just not worth the hassle of permits / potential headaches / raised taxes.
 
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rh71 said:
well people have that money from many sources... could be if you're upgrading to a house, what you've sold gives you some cash. You could borrow short-term from close relatives. Could be from gambli... errr.. the stock market. But yeah if you've always rented, you've been throwing money out the window.
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Uhhh, where did I say I've always been renting? I bought a house 7 years ago, and was thinking about refi'ing sometime soon. I just don't think its possible for me at the moment because of closing costs.

The problem is that I would be refi'ing based on an outlook quite distant in the future, since it wouldn't lower my payments for the time being. I'm at 1.5% right now and it most likely isn't going up anytime soon. If/when it does, it can only go up 1 point a year, and only two consecutive years in a row. So even if it went up each of the next two years, it would still be 3.5% which might still be lower then what I could get if I refi today.
 
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Vdubchaos said:
Stay away from brokers and big banks.

In general small local bank (with good reputation) or a credit union is much better.

The biggest problem with brokers is
a) 99% scumbags and VERY few good ones
b) in most cases you won't know who your bank is until closing (if you care, I do)
c) too many use bate/switch tactic

I just tell people to stay the hell away/get rid of the middle man
Click to expand...

Was a first time home owner, our agent was really great and went with her recommendation of a broker. Luckily I did my research on the fees and beat the broker a bit and saved over $1k in "junk fees". In the end it turned out well and my mortgage was sold to Wells Fargo.
 
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