Seems a no brainer nowadays to refinance to lower my interest rate on my mortgage. Wife and I are gathering info from a few online loaners. We are currently in 6 yrs on a 30 yr. fixed at about 4.10%. We are being quoted 2.5% for a 15yr fixed and 2.85% for a 20yr fixed. Since the rates and terms we are being quoted appear all about the same how do I play one against the other to get an advantage and decide who to give the business to? Thanks.

Will your local bank who loaned you the money (assuming you used a local bank) give you a rate adjustment?

If you haven’t consulted your local bank’s mortgage lender I think you’re missing out.

At the very least you can get your question fully answered there.

There's not much negotiation to it. You shop it & pick the best deal for you.
As x said, contact your current lender & see what they'll do, if anything.
Otherwise, the difference is Future Value- rate, term & fees. Going from a 30 to a 15 will up your payment, are you comfortable with that? It will save you the most money overall.

My wife is a mortgage processor.

Compare your payment and term to see what is your best fit (Assuming 300k loan, 2000 x 15y or 1,650 x 20y), will that $350 be a hot to your budget? Could it become one?

Over the life of the loan in this scenario, you could save 33k by going with the 15 year deal. Is 33k a number that makes it worthwhile to you?

Are there points/fees that are different between the options?

I agree that sitting with you local banks Lending Partner can make all of this easier to understand, and see what they can offer.

Many local banks write "portfolio loans" where they keep the debt themselves, most online lenders will sell your loan the first chance they get, and you may be "sold" or transferred multiple times. This may or not matter to you, but it is something to consider.

I never considered contacting my current lender, who is Wells Fargo. Ill try that first, thanks.
All other things being equal we are talking no points, and I do realize that naturally as my term gets shortened my cost per month will rise.
Naturally, both companies are happy to lend us a few grand more to consolidate cc debt, which is a good move. Looks like going from a 30yr, of which there is 24 yrs remaining will cost an additional 200/mo. While going with the 15 yr. will cost closer to 600/mo. which might be a stretch. Thanks guys.

Is the cc debt payments now more than the increase in payments ? While I am not a fan of paying credit cards off in 15,20 or 30 years it is what is and you can transfer that debt deon double digit to low single digit rates, tax favoured. Will you be disciplined to not spend on the cc and to throw extra at tuhe mortgage every month ?

I sell and underwrite mortgages for a living as well and depending on loan amount for most people taking the longest term with lowest payment then doubling up payments is most efficient. But needs discipline. Then If you hit a rough patch income wise, you can go back to the lower minimum payment. The bank is indifferent if you take 15,20 or 30 Just remember that whatever program you choose, any extra payments made are not any chits you can use down the road. Lose your job and call your banker and tell him you’ve made double payments for 5 years in a row but. Is you need some help, and he’s gonna say hey sorry about that, payment is due on the 1st...

If you think you ever might want to pay extra on the mortgage to shorten the term and/or save additional interest, make sure there’s no prepayment penalty on whatever new note you select.

If your current lender won't offer a deal, and if you can get it for free, request a payoff statement. That usually gets their attention and then they start asking how they can keep your business.

Do it.

Do it, do it

Consider how long you will continue to live there.
I would use almost anyone other than Wells Fargo. I used to have business and personal accounts there from all the bank mergers in the '08 meltdown and it was the worst continuing customer service experiences I've had.
Check with a local community bank too because they don't seem to mark up the outside fees and other B/S (closing costs) like the big banks.

So, what's your plan to not get back into credit card debt?

As a business owner that works with the bank you mentioned, I would urge you to strongly consider another institution. The advice to speak with your current mortgage provider was good advice, up until the realization of who that provider was got disclosed. Even a fly by night online broker might be better than your current holder.

Nearly all residential mortgage companies sell off the loan immediately upon closing. Legislation has been introduced to require the originators to hold loans for a period (I believe 36 months was the goal) in order to help cut down on predatory lending and other mortgage fraud. Wells Farge was one of the largest $$$$ who opposed it. I believe it is dead in the water now, and with the expected changes to financial policy that are coming, it won't likely get passed now. Shop your local mortgage broker if you can, see what they can offer. Look at the hidden and undisclosed fees and potential headaches. Pitting two entities against each other can feel smart, but can actually hurt you. With banking and lending, reputation and ethics are more important than rates and fees. Go with the institution that isn't looking for a way to screw you over. Too good to be true can be very true in lending also. If they aren't making their money on interest...where are they making their money?

when looking at fees, you need to know what is a lender fee and what is a 3rd party fee.

We just closed on a 30 year 2.5% at -.875 point. It was with Provident Funding, we have had great service and results from them. Closing costs were the rest of January's interest, February's payment + about a grand.

We'll just keep paying the higher amount from before the refi.

Since your interest rate is pretty close on a 15 and 20 what about going with the 20 but making the payment for the 15 year. If you have a bad month or two you could always stop paying the addition principle.

quote:

Originally posted by ElToro:
Is the cc debt payments now more than the increase in payments ? While I am not a fan of paying credit cards off in 15,20 or 30 years it is what is and you can transfer that debt deon double digit to low single digit rates, tax favoured. Will you be disciplined to not spend on the cc and to throw extra at tuhe mortgage every month ?

I sell and underwrite mortgages for a living as well and depending on loan amount for most people taking the longest term with lowest payment then doubling up payments is most efficient.

apf383, you need to listen to this man just if the donut maker is asking you whether you're sure you really want to buy some donuts.

Alarm bells went off in my head reading your second post. Lowering your interest rate from 4.10 to less than 3% and from 24 years to 30 and your payment is going to go UP $200 / month???

That's not how it's suppose to work; your payments are supposed to go lower. Given the 2.85%, 30 year term, and $200 monthly increase, it sounds like you're rolling into the loan about $48,400. I guess you have to do what you have to do but as others point out, you need to have a plan that keeps you from loading up those credit cards again.

By the way, the $600 additional payment for the 15 year loan might be off as that calculates to about $90,000 that you'll be rolling into the loan. If the $48,400 is in the ballpark then $322 should be the additional payment under the 15 year, 2.85%.

No prepayment penalty from either company.
I will inquire about "Payoff Statement" Thanks Rick.
Wife lost work due to Coved, so less coming in, naturally, we had a few unforeseen expenses necessitating credit card usage. We will probably be retiring out of NY in about 10 yrs.


ElToro, Rey, We initially had a 30 yr. that was sold almost immediately to Wells Fargo of which we've paid 6 yrs. We would be going from a 30yr to a 20yr. Possibly a 15 if we can make the numbers feasible. CC payments are currently more than the additional money we will/would be paying by refinancing, so it seems to me we would be better off borrowing by rolling that additional money, say 20k into the refi, and paying off the credit cards immediately, and then dealing with the monthly mortgage. I've got to sit down with the wife over the weekend and hash out a few things, then get back to the lenders. I'd like to do this asap as I expect rates will rise.
The 20 yr. is looking like the way we may want to go as I don't want to be "house poor".

quote:

Originally posted by apf383:
No prepayment penalty from either company.
I will inquire about "Payoff Statement" Thanks Rick.
Wife lost work due to Coved, so less coming in, naturally, we had a few unforeseen expenses necessitating credit card usage. We will probably be retiring out of NY in about 10 yrs.


ElToro, Rey, We initially had a 30 yr. that was sold almost immediately to Wells Fargo of which we've paid 6 yrs. We would be going from a 30yr to a 20yr. Possibly a 15 if we can make the numbers feasible. CC payments are currently more than the additional money we will/would be paying by refinancing, so it seems to me we would be better off borrowing by rolling that additional money, say 20k into the refi, and paying off the credit cards immediately, and then dealing with the monthly mortgage. I've got to sit down with the wife over the weekend and hash out a few things, then get back to the lenders. I'd like to do this asap as I expect rates will rise.
The 20 yr. is looking like the way we may want to go as I don't want to be "house poor".

Okay, I got the $48,400 from using the incorrect years (30 instead of 20). The additional $200 a month translates to $36,600 being rolled into the loan.

Looking at Credit Card interest rates versus Mortgage rate, it makes mathematical sense. But understand that 1) you still need a plan or commitment to not continue piling on credit card loans or you'll be looking at refinancing again 5 years down the road and 2) have a goal to add to your principal payments to knock off as soon as possible however much credit card you're rolling in otherwise you'd be paying off whatever stuff you bought for 20 years which I'm willing to bet will be more years than how long most of the stuff you bought will last.

Just friendly financial advice.

quote:

Originally posted by 220-9er:
Consider how long you will continue to live there.
I would use almost anyone other than Wells Fargo. I used to have business and personal accounts there from all the bank mergers in the '08 meltdown and it was the worst continuing customer service experiences I've had.
Check with a local community bank too because they don't seem to mark up the outside fees and other B/S (closing costs) like the big banks.

Yeah OP will have a real challenge on his hands finding intelligent life at WF. We have spent 3 weeks and a half dozen phone calls trying to set up to transfer some $ from our WF account. After the most recent failure my wife was so pissed she said enough, closing the account. We have Chase as well and frankly they are no better. One of the challenges in living in multiple places in retirement is finding one good bank with local access to your cash. The large banks are not the answer. The good small banks don't have a presence all places.