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Should I refi now, or wait

Good Rule of Thumb

A good rule of thumb is that if interest rates are 1/2% to 5/8% lower than your current interest rate, it may be a good time to consider refinancing a home mortgage.
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I don't quite get refinancing (never done it), but isn't there a catch along the lines of you'll be starting at the "beginning" of the loan again, meaning you're going to be paying the interest part first?
 
yllus said:
Good Rule of Thumb



I don't quite get refinancing (never done it), but isn't there a catch along the lines of you'll be starting at the "beginning" of the loan again, meaning you're going to be paying the interest part first?
Click to expand...

Different on a 15 year. The first year, 1/3 goes to princible, the next year kicks up to 40%. We are in year 3 of a 15 year and half goes to princible.
 
yllus said:
Good Rule of Thumb



I don't quite get refinancing (never done it), but isn't there a catch along the lines of you'll be starting at the "beginning" of the loan again, meaning you're going to be paying the interest part first?
Click to expand...

Yes. It resets your amortization tables which is why it's not always a good idea to refinance, you could wind up paying MORE even if your rate is lower. But being as OP's only a year in that pretty much negates that angle. If he was 10 years in on a 15 then absolutely don't refi.
 
on 100k currently will pay $35.8k in interest.
@3.8 you'll pay $29.1k in interest.

Edit: That's for the full 14 years.
 
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spidey07 said:
Yes. It resets your amortization tables which is why it's not always a good idea to refinance, you could wind up paying MORE even if your rate is lower. But being as OP's only a year in that pretty much negates that angle. If he was 10 years in on a 15 then absolutely don't refi.
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You are only talking about the total sum of money, you really should do an NPV analysis of a loan.

And if you don't want to restart the loan, you can always make prepayment on a 15 year loan to shorten it to 5 year.
 
I just refinanced by having the broker roll all the fees into points on the APR. No up front costs and you still get a lower APR than without refinancing. Win-win.
 
OP, thanks for this thread! didn't know rates were this low. I JUST called and re-fi'd my 30 (25 left @ 5.9&#37😉 to a 15 yr @ 3.875%. I have a 2nd mortgage so my payments stay the same, but I pay $300 less a month in interest. should be able to recoup costs in 8 months. they rolled $2000 in fees/costs into the mortgage though. was that too much?
 
Why would anybody roll the fees into the mortgage? You're paying interest on something that has zero value or return. Don't do that.
 
I just refinanced by buddy that I sold a condo to in September down to 4.5 percent; from 5.375;. I paid all his fees and still made $7K on the deal.

Win-Win. 🙂

Basically anyone who is sitting in the 5+ range, with good credit and 20+ percent equity should think about refinancing.
 
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Anyone telling you the amortization resets isn't entirely accurate. You can refi and some lenders will allow you to keep your current schedule. We refi'ed 1 year into a 30 year mortgage and kept the remaining # of payments the same.
 
I have a six percent loan, i think its a no brainer for two full points down but anything less u got to balance closing costs , and what yourloan futureis. I plan on saving up andpaying loan off early within five or six years..if i fail to do that i will fail epicly passing up on a easy 1 point reduction. 25 years left on mortgage
 
sjwaste said:
Anyone telling you the amortization resets isn't entirely accurate. You can refi and some lenders will allow you to keep your current schedule. We refi'ed 1 year into a 30 year mortgage and kept the remaining # of payments the same.
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What does the lender get out of the deal? Upfront transaction fee?
 
^ He must be talking about a loan modification with the servicer he already had. Your loan starts at whatever term the Note says, which is going to be 40, 30, 25, 20, 15, or 10 years.
 
OCGuy said:
I just refinanced by buddy that I sold a condo to in September down to 4.5 percent; from 5.375;. I paid all his fees and still made $7K on the deal.

Win-Win. 🙂

Basically anyone who is sitting in the 5+ range, with good credit and 20+ percent equity should think about refinancing.
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Not always.

If you are refi'ing a non-recourse loan you could be losing that protection.

Don't listen to ATOT. Go talk to an attorney or financial planner who has your best interest in mind.
 
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