We sign tomorrow morning on a VA IRRL, dropping to 2.9%. Even though we just refi’d a year ago the rate drop makes it worth it.

16 months with the lower rate and the costs are covered.

I've never had a mortgage.
But
People talk about variable and fixed and balloons.

Many of the posts above do not use those terms

We're all discussing fixed rates.

A variable rate loan doesn't make much sense at this point, because there is really nowhere for rates to go but up. These are the lowest rates in modern history.

Friendly advice from my banking friend...be careful of those low, tempting rates. Be sure to read the fine print. They often come with VERY expensive fees and add-on cost. For example, I saw 2.75% advertised from Chase, my current bank and where my friend works. She told me that rate came with VERY high fees and it wasn't worth it unless my current mortgage was really high, which it isn't.

quote:

Originally posted by Beancooker:
Last year we took on a 30 year at 4%.
Wells Fargo has offered 3% to stay with them. It appears closing costs will be minimal, 2%. I have asked for the appraisal fees to be waived which will get it down to the 1.5% range. The monthly savings will pay off the closing costs in 16 months.
I think I’ll take the 3% even though I wish I could score a 2.5.

Closing costs of 2% on a refi is highway robbery. Not sure where you are at, but locally a refi under $510,400 (delineation of Jumbo) maxes out at 1.31% for a 2.875% 30 year when you include the .5% rate buy down. This assumes you have at least 25% equity.

quote:

Originally posted by erj_pilot:
Friendly advice from my banking friend...be careful of those low, tempting rates. Be sure to read the fine print. They often come with VERY expensive fees and add-on cost.

That may be true of some lenders. And I could see it being more likely on refis.

But my new purchase 2.25% USDA loan only has standard closing costs and lender fees. In fact, my lender had slightly lower in-house fees by a few hundred bucks than any of the 4 lenders that I shopped around with, along with having the best interest rate by anywhere from 0.25% to 1.5%, and by far the best communication/service... Benefits of a small local bank vs. large national banks.

(Besides, all my closing costs are being paid by the seller/builder anyway. )

And yes, that's the par rate, meaning no points or other extra outlay required to get it.

So no gimmies or gotchas here. Just reaping the benefits of historically low interest rates.

quote:

Originally posted by 280nosler:

quote:

Originally posted by Beancooker:
Last year we took on a 30 year at 4%.
Wells Fargo has offered 3% to stay with them. It appears closing costs will be minimal, 2%. I have asked for the appraisal fees to be waived which will get it down to the 1.5% range. The monthly savings will pay off the closing costs in 16 months.
I think I’ll take the 3% even though I wish I could score a 2.5.

Closing costs of 2% on a refi is highway robbery. Not sure where you are at, but locally a refi under $510,400 (delineation of Jumbo) maxes out at 1.31% for a 2.875% 30 year when you include the .5% rate buy down. This assumes you have at least 25% equity.

Thanks for the comparison. I’m in Cottonwood AZ. I’m at approx 32% equity. Back to the banking lady I go.

quote:

Originally posted by erj_pilot:
Friendly advice from my banking friend...be careful of those low, tempting rates. Be sure to read the fine print. They often come with VERY expensive fees and add-on cost. For example, I saw 2.75% advertised from Chase, my current bank and where my friend works. She told me that rate came with VERY high fees and it wasn't worth it unless my current mortgage was really high, which it isn't.

Yeah I saw the thread, and called my loan guy who I have known for 15 years. He did the first loan on the house and my refi's so I trust him. We went over what I owe on the house (payoff), and my mortgage which is actually pretty low per month comparatively. He said due to the low amount I owe, the already low payment he advised against refinancing due to fees, etc. I'm at 4.125%. I told him I wanted to refi, and get about 50k out of the deal for remodeling. His opinion was to do a heloc instead. After going over what I owe, current rate and monthly mortgage, and how long I want to be here (max 10 more years) that's what we decided. I'm at around 60% ownership.

So I don't create another post that is related to this topic... please allow me to ask these questions. I have never refi our house (owned for 5 years now, of 30 year loan). We would like to pull out some cash for some house projects. Currently 5% fixed rate (No PMI).

1. What are the questions I need to ask our bank? (points, fees, etc.). What is it about in layman's term? I also heard about "break even" on the associated fees.

2. What does it mean by "buying points"?

Can remember good old days(1969) when 7 1/2 was sweet and you also needed a decent down payment.

Thanks for the reminder. I looked at it about 2 months ago but was gun shy because I thought the rates might dip a little more.

They did. I locked in a 2.5% 15 year loan today. Dropping our rate by 3%, dropping 10 years off the term, and getting out of a PACE loan that was much higher interest without paying substantially more monthly.

The website I used several years ago was bankrate.com.
You will want to use the annual percentage rate (APR) and not just the interest rate to compare different lenders.
What's the difference? APR is the annual cost of a loan to a borrower — including fees. Like an interest rate, the APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees such as mortgage insurance, most closing costs, discount points and loan origination fees.

quote:

Originally posted by wxl:
Can remember good old days(1969) when 7 1/2 was sweet and you also needed a decent down payment.

damn.

I just punched through the prompts on Lending Tree and got a response of 2.25% with 2 lender points on a 15 year fixed. Same lender as I was attempting a 2.75%/20 back in March when pandemic things were really starting to heat up and the wheels came off...

That's over a point reduction and would shave about 5 years off my mortgage.

Boss

After locking in my 2.75% rate the day I started this thread (April 30) we finally closed today. 2.75% for 15 years. I am not interested in financing the closing costs over 15 years so I paid all the misc costs up front. If we make our same payment as we did on the existing loan I'll have it paid off in just over 11 years. Need to be disciplined on that one.

quote:

Originally posted by 1967Goat:
After locking in my 2.75% rate the day I started this thread (April 30) we finally closed today. 2.75% for 15 years. I am not interested in financing the closing costs over 15 years so I paid all the misc costs up front. If we make our same payment as we did on the existing loan I'll have it paid off in just over 11 years. Need to be disciplined on that one.

Yup. You did well my friend.

quote:

Originally posted by Edmond:

quote:

Originally posted by wxl:
Can remember good old days(1969) when 7 1/2 was sweet and you also needed a decent down payment.

damn.

You could probably have gotten 5% on passbook savings then. It really got crazy in 1981 when mortgage rates were in the 17% range.

First house I bought was in 1978 and my loan was 8 3/4%. Bought my fruit stand property in 1981 owner financed @ 9% and felt like I'd made the deal of the century.

I locked 15yr at 2.5% no points today. No plans to move and at the very least we will save $10k in interest over the life of the loan.

quote:

Originally posted by doublesharp:
First house I bought was in 1978 and my loan was 8 3/4%. Bought my fruit stand property in 1981 owner financed @ 9% and felt like I'd made the deal of the century.

Yeah, it's interesting to look back at mortgage rates for the past 50 years, with the average being around 7-10 percent, but with multiple spikes into the teens in certain years.

http://www.freddiemac.com/pmms/pmms30.html

Really hammers home what an amazing opportunity it is right now, with the lowest mortgage rates in the past few generations.

And I can't imagine trying to buy a house in 1982 at almost 18% interest!