Thanks for all the help. Is there any other website to check other than bank rates. Checked with one of the local lender. They are little higher without closing costs. Looks like online is the only option to get lower rate.

gremln007 said: You might try a zillow mortgage search. Thanks. I find some more at 2.75% with no closing. But fine print says third party fees may not be included (Title, escrow, insurance and taxes). Insurance and Taxes are going to be part of escrow. Are we going to pay up some third party fees (title) even though they says zero closing costs.

rustum said: gremln007 said: You might try a zillow mortgage search. Thanks. I find some more at 2.75% with no closing. But fine print says third party fees may not be included (Title, escrow, insurance and taxes). Insurance and Taxes are going to be part of escrow. Are we going to pay up some third party fees (title) even though they says zero closing costs.

Thanks

I think you just answered your question. credits can go towards these fees if its a large enough credit.

Data point working with smarter mortgages aka ferion and am getting 3.625 for no costs (1600 credit to offset) on a 30 with 25% equity n prime credit. Will confirm when and how the close goes. They have 75% of the paperwork with online signatures and you can submit the rest as pdf or jpeg in thier portal. Seems streamlined so far.

is it difficult to switch to 30 year after moving to 15 yr mortgage? Obviously without job, I won't be getting loan. But I can switch it to spouse name in case assuming at least one of us keep the job.

mybuds said: Adding a data point - 3.500% with a ~$3200 lender credit toward costs from Better. Jumbo 30 year refi, good credit, ~60% LTV.

Interesting. I tried playing around with numbers on their rate calculator, and rates go down (and credit goes up) significantly around the 60% LTV range. I'm seeing a 3.25% 30 year fixed with $800 credit. It's just too bad my LTV is around the 80% range atm.

The only real hitch I've had so far with Better (loan process started 1/20/16) is their use of CoreLogic as a credit verification agency. I don't think i've ever had to contact CoreLogic before, but the offshore reps they have are ridiculous. I don't think they have any mortgage/credit report training at all, and the accents are so difficult to work through.

Should I go with Penfed 5/5 at 2.875% or Penfed 5/1 at 2.375. Currently I have 15 years fixed at 3% and 11 years left on the mortgage. We are plan to live in this home for 5 - 7 years . We are both 39 years old.

art07154 said: Should I go with Penfed 5/5 at 2.875% or Penfed 5/1 at 2.375. Currently I have 15 years fixed at 3% and 11 years left on the mortgage. We are plan to live in this home for 5 - 7 years . We are both 39 years old. If you're only staying 5-7 years, a no-cost loan option may make more sense than either of those. I usually saw 7-10+ year break-even points when I was rate-shopping last month. If the breakeven is longer than the planned duration of the loan, then it's more expensive to have the lower interest rate with higher up-front costs. And vice-versa, if you're planning to keep the loan longer than the breakeven and have a low expectation of rates falling and wanting a refi, then it's cheaper to pay the higher up-front costs to obtain the lower rate. (Unclear whether that 5/5 has 1% origination penfed usually charges for all their headline-quoted rates, and other closing costs could vary based on your location). I would first check if either of those have origination charges and then do a break-even calculation vs a no-cost. You have two ways to enter the closing costs into the calculator: 1) Convert fixed closing cost estimate (title/etc+origination or other lender junk fees) to a "points" number on both loans. The no-cost option will end up being zero, while "zero points" at penfed would end up being ~2.5 or so in the calculator depending on title/closing fees. 2) Convert lender junk fees only to a points-equivalent and add it to penfed's "zero points". The no-cost you are comparing to would be entered with a negative points number that would account for any lender fees minus the lender credit. The key is to compare apples-to-apples when you compare the options.

Checked with one of the lender who advertised for 2.50 rate and 2.580 APR (310k 15 yr loan). This APR still doesn't involve covering third party expenses. In TX, these are going to be around $2500. According to him in order to cover all the expenses, my rate is going to be 2.875% which is lot more than what they advertised. Looks like I should jump on any one offering 2.750% covering all costs (loan and third party). Is it going to cost me 0.25% rate to cover my expenses?

rustum said: Checked with one of the lender who advertised for 2.50 rate and 2.580 APR (310k 15 yr loan). This APR still doesn't involve covering third party expenses. In TX, these are going to be around $2500. According to him in order to cover all the expenses, my rate is going to be 2.875% which is lot more than what they advertised. Looks like I should jump on any one offering 2.750% covering all costs (loan and third party). Is it going to cost me 0.25% rate to cover my expenses?

Thanks Need little help in understanding how much they are going to jack up my interest rate to cover their expenses? If 15 yr 310k loan interest rate is 2.50%. I will be end up paying 2.75% rate in order to cover all the expenses(load and third party) right?

rustum said: rustum said: Checked with one of the lender who advertised for 2.50 rate and 2.580 APR (310k 15 yr loan). This APR still doesn't involve covering third party expenses. In TX, these are going to be around $2500. According to him in order to cover all the expenses, my rate is going to be 2.875% which is lot more than what they advertised. Looks like I should jump on any one offering 2.750% covering all costs (loan and third party). Is it going to cost me 0.25% rate to cover my expenses?

Thanks Need little help in understanding how much they are going to jack up my interest rate to cover their expenses? If 15 yr 310k loan interest rate is 2.50%. I will be end up paying 2.75% rate in order to cover all the expenses(load and third party) right? If that's the rates associated with the two, then yes. You would want to plug them into the mortgage points calculator to determine break even. I can't do so without the loan amount which is needed to compare the rate to the fee. You'd plug 180 into "months" for 15 years, loan amount, and then 2.50% @ (closingfees/Loan Amount in percent) points, and 2.75% @ 0 Points.

Alternately, you could equivalently enter the 2.50% @ 0 points and the 2.75% @ negative points (calculated from the "net lender credit amount" divided by loan amount, converted to percent).

Bend3r said: rustum said: rustum said: Checked with one of the lender who advertised for 2.50 rate and 2.580 APR (310k 15 yr loan). This APR still doesn't involve covering third party expenses. In TX, these are going to be around $2500. According to him in order to cover all the expenses, my rate is going to be 2.875% which is lot more than what they advertised. Looks like I should jump on any one offering 2.750% covering all costs (loan and third party). Is it going to cost me 0.25% rate to cover my expenses?

Thanks Need little help in understanding how much they are going to jack up my interest rate to cover their expenses? If 15 yr 310k loan interest rate is 2.50%. I will be end up paying 2.75% rate in order to cover all the expenses(load and third party) right? If that's the rates associated with the two, then yes. You would want to plug them into the mortgage points calculator to determine break even. I can't do so without the loan amount which is needed to compare the rate to the fee. You'd plug 180 into "months" for 15 years, loan amount, and then 2.50% @ (closingfees/Loan Amount in percent) points, and 2.75% @ 0 Points.

Alternately, you could equivalently enter the 2.50% @ 0 points and the 2.75% @ negative points (calculated from the "net lender credit amount" divided by loan amount, converted to percent).

TX's "regulated" title fees do suck. Thanks Bend3r, I will check it out by putting numbers. My loan amount is 310k.

Bend3r said: art07154 said: Should I go with Penfed 5/5 at 2.875% or Penfed 5/1 at 2.375. Currently I have 15 years fixed at 3% and 11 years left on the mortgage. We are plan to live in this home for 5 - 7 years . We are both 39 years old. If you're only staying 5-7 years, a no-cost loan option may make more sense than either of those. I usually saw 7-10+ year break-even points when I was rate-shopping last month. If the breakeven is longer than the planned duration of the loan, then it's more expensive to have the lower interest rate with higher up-front costs. And vice-versa, if you're planning to keep the loan longer than the breakeven and have a low expectation of rates falling and wanting a refi, then it's cheaper to pay the higher up-front costs to obtain the lower rate. (Unclear whether that 5/5 has 1% origination penfed usually charges for all their headline-quoted rates, and other closing costs could vary based on your location). I would first check if either of those have origination charges and then do a break-even calculation vs a no-cost. You have two ways to enter the closing costs into the calculator: 1) Convert fixed closing cost estimate (title/etc+origination or other lender junk fees) to a "points" number on both loans. The no-cost option will end up being zero, while "zero points" at penfed would end up being ~2.5 or so in the calculator depending on title/closing fees. 2) Convert lender junk fees only to a points-equivalent and add it to penfed's "zero points". The no-cost you are comparing to would be entered with a negative points number that would account for any lender fees minus the lender credit. The key is to compare apples-to-apples when you compare the options.

Both options have no origination fee. The closing cost in my state would be around $3500-$4000. I am planning to pay the same amount that I am paying every month on fixed for the first 5 years. The loan amount is $240K . By year 6 when the mortgage ready to adjust. I should less than $100k on the mortgage. Am I making sense ?

Art07154, are you sure you're accomplishing anything with a refi? If you already have 3%, you might just increase your payment and avoid the refi completely.

gremln007 , Honestly I am not sure . I am on year 5 of my 10 years contract with my employer . We would be likely to move to another state or even overseas assignment. We purchased this home on 15 years fixed at 3% the first month that I took this job .The balance on the mortgage is $240k. LTV 65%

art07154 said: Both options have no origination fee. The closing cost in my state would be around $3500-$4000. I am planning to pay the same amount that I am paying every month on fixed for the first 5 years. The loan amount is $240K . By year 6 when the mortgage ready to adjust. I should less than $100k on the mortgage. Am I making sense ?

If you're paying 3500-4000 up-front to change from 3% 15yr fixed to 2.875% 5/5, you're not going to be saving anything on the "interest", it's simply impossible for this scenario to come out as a benefit to you. Rough calculation: $4000 = 1.6667% of principle amount. 0.00125*7.5(half the amortized term@15yr) = 0.9375% of loan in "saved" interest. Net loss of 0.729%*240000 = $1750

Alternately doing the equation in reverse and looking at the $ amount rather than percent:If you take 15 more years to pay off the loan (I think this is overestimating based on your plan/numbers), the maximum interest "savings WITH interest assumed to stay at 2.875 throughout term" is approximately 7.5*0.00125*240000 = $2250 on the 5/5. This is only about half of your up-front costs, plus if plans change and you sell/refi because the 3500-4000 is an up-front cost you will not receive it back in future "savings". $2250 minus $4000 = $1750 net loss. (Yay, it should have come out to the same answer as the alternate method I calculated with, above, and it did )

Best case scenario on the 2.375% assuming again that the rate stays at exactly 2.375% over the whole term is 0.625%*240000*7.5 = $11,250 maximum "savings", with an up-front cost of the $4000, resulting in a net maximum benefit of $7250. However, your plans reduce the maximum savings though, because you pay it down faster so there is less interest accrued and less interest "saved" overall. Additionally, a 5/1 includes a significant risk of the interest rates repeatedly increasing after the first 5 years, which would again reduce savings or even end up with higher rates than you started with. So, this rate/cost refinance option does not look very appealing either.

Now, if you can find a 15 yr fixed rate at any rate lower than 3% for a no-cost refinance (that covers most or all closing costs), you will immediately come out ahead because you're dropping the rate with no up-front cost. That's the easiest way to know the refi "definitely" makes sense because it doesn't depend on you holding the loan for X more years to break even or any other conditions. Or, similarly if you found ~2.5% or less for 15yr fixed with an up-front cost like you were seeing on the 2.875, it would likely be beneficial with the assumptions you keep the loan/property for some number of years. How much you need to come out ahead to make it worth the effort of a refi is another question ($500? $1000? 2000? more?), and you do generally put at least ~$500 at risk for the appraisal to go forward with a refi. I'm refi-ing $155k from 4.125% 30yr last August to 4.000% right now, but I am getting ~$500-$700 cash in my pocket, cashing-out another $3000 (without counting as a cash-out) for the new escrow account starting balance, plus lowering the rate by 0.125% (worth about ~ $3000 interest savings over a complete 30 year term).

Edit: After reviewing my thought process, I figured my rough estimates were underestimating total interest accrual. But I found that the estimate was still really close, within 10%. Using an amortization calculator to calculate the exact interest amount, 3% fixed on 240k @15yr amortization = $58,331.16 interest. 2.875% fixed on 240k @15yr amortization = $55868.80 total interest. Maximum total interest savings: $2462.36. Still < the $4000 costs.

I am noticing lower interest rates during the search. But with no closing cost (Including Texas third party expenses) it is always going to be 2.875% and more with everyone. Not seeing anything lower than that for last 1-2 weeks. I am gooing ahead with 2.875% 15yr mortage with no closing cost. What do you guys thing?

rustum said: I am noticing lower interest rates during the search. But with no closing cost (Including Texas third party expenses) it is always going to be 2.875% and more with everyone. Not seeing anything lower than that for last 1-2 weeks. I am gooing ahead with 2.875% 15yr mortage with no closing cost. What do you guys thing?

Thanks

You aren't talking a big difference even with a .25% drop based on Texas real estate prices.

DPG said: rustum said: I am noticing lower interest rates during the search. But with no closing cost (Including Texas third party expenses) it is always going to be 2.875% and more with everyone. Not seeing anything lower than that for last 1-2 weeks. I am gooing ahead with 2.875% 15yr mortage with no closing cost. What do you guys thing?

Thanks

You aren't talking a big difference even with a .25% drop based on Texas real estate prices. $20 difference in monthly payment for 310k with 2.875% vs 2.750%. Agree not much difference in payments. I have $1645 monthly payment with 30yr now.

I currently have a 30 year 4.09% mortgage. I will be in the house long term (>10 years). Not sure what to do - the PenFed 5/5 ARM looks enticing but rates 5 and 10 years out could be anything, so don't want to take the risk. Refinancing to 3.375% (which I see as today's rates) incurs A LOT of closing costs (I'm seeing $4k+). I live in TX. Any low or no closing cost options? I'd take a higher than 3.375% but lower than 4% if no closing costs.

Got 2.750 from online mortgage lender for 15 yr. But I have to pay for appraisal. There is no way to opt out of escrow later. Escrow waiver is 0.125% as of now. That brings everything back to 2.875%.

I'm in a 30 jumbo at 3.75%. We just got it last year, so our LTV is .78 We expect to be in the house for at least 15 years if not more, long term is to keep as rental when we retire.

I'd like to refinance at anytime it benefits me- but what am I looking out for? It seems like the quotes online will have the fees listed- are there hidden fees to look out for? I know I don't want anything added to the loan balance, and any fees should be balanced out by my monthly payment reduction rather quickly, if there are any fees at all.

TPaine said: Is there another comprehensive one to use? The simple calculation to compare two alternate "new" loans of same terms but different rate/points at the same lender is: Take difference in costs (points+closing costs excepting initial escrow which is not really a "cost"), divide this by the difference in the two "payment" amounts. The result is the number of months to break-even on the lower rate/higher fee option. The difference from this simple calculation and the calculator like I linked and is down is primarily the opportunity cost of the money and the tax deductions are not taken into account, both which would increase the break-even time.

The challenge as to why the above simple comparison doesn't work between different lenders is because most do not include third party costs or all closing costs in the payment calculations, while some will (example: Box includes third party costs in APR and payment amounts. Costco rate search includes no third party costs in APR or payments. The third party costs are also estimates, so they could all use different estimates which would skew the payment amounts slightly)

Edit: The one I linked to appears to be working. If you don't fill in all the fields it returns an error, but it seems to work when fields are filled in. See attached. I threw in current rates form box. *Cries a little it's ~0.25 lower than the rates I'm closing at tomorrow or mon...* If you want to see break-even vs existing loan rather than just comparing two new loans, then you would enter the existing loan rate in the first column at 0 points and the new loan rate in the 2nd column with points plus closing costs converted to points.

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