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Refinancing Mortgage (both rental and personal)

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Hi Everyone,

I know there are a million threads on this....I tried to read through some but everyone seemed to be unique and have oddities dissimilar to what I was looking for.

I bought a house in March 2017. 20% down, $405k and $25k loans making it up. I got 4.125% rate for 30 years (rate wise bad timing). I know the rates have since dropped way back down again. I see rates online at 3.625% or 3.725%. I'm thinking about refinancing....but I'm confused about paying fees. Some sites say there are no fees with certain banks, whereas other threads I read say people paid thousands in fees. Anyone have a recommendation of what company to go with?

Also I bought a rental property in July at 4.25% at 25% down, $375k loan over 30 years. What are my options with that now or in the future? Is there anything I should do?

I just want to get the most out of my money, and I've never done this before. Any recommendations are helpful.

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Did you happen to check the mortgage thread stickied at the top of the Finance forum?

https://www.fatwallet.com/forums/finance/788032

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donotdrinkPBR said:   Did you happen to check the mortgage thread stickied at the top of the Finance forum?

https://www.fatwallet.com/forums/finance/788032

  Hi Donotdrink, I looked at that thread as well and the list on page 1 hasnt' been updated in years.....unlike some of the other threads similar to that which are kept up to date. Hard to look through that and get current advice similar to my situation other than random things.

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I recommend NFCU. Or you can roll the dice on Zillow.

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I don't think No-fee Refis are at 3.625% for 30yr.  I'm seeing around 3.875% for a 417k loan 80ltv (at the lender i used anyways, box, with my county selected.  Mauve someone else is really 0.25% lower and/or your areas closing costs are lower - have not checked zillow).  Which is certainly worth it, you can lower your rate 0.25%, ir ~$1k/yr in interest savings.

I'd suggest looking at no fee rates first to see if it makes sense. Then it's a separate question if the ~10yr break-even for paying down the rate any makes sense.

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Mrr82 said:   I'm thinking about refinancing....but I'm confused about paying fees. Some sites say there are no fees with certain banks, whereas other threads I read say people paid thousands in fees. Anyone have a recommendation of what company to go with?Some mortgage originators / lenders charge more fees than others (aka lender fee or origination fee). Most (all?) of them will let you increase the interest rate in exchange for a lender credit, which can be used to offset the fees (it's the opposite of buying down the rate, same math). I'd guess that on ~$400K loans, the credit will be ~$3K for 1/8th of a point (meaning if a lender quotes you $2500 in closing fees for 3.625%, the same lender should quote you $500 in lender credit for 3.75%). This is just a guesstimate.

I always recommend the Zillow mortgage page, because lenders there are much more competitive than anywhere else. I also always recommend a slightly higher rate to pay nothing out of pocket, or better yet get some cash paid to you after closing (limited cash out refinance allows you to receive < $2K; if you take more it's considered a cash out refinance, which is more expensive than no cash out / limited cash out). Look for my posts in the mortgage thread if you want an explanation for why paying points makes no sense for most people.

As far as your specific situation, most lenders require at least 6 months seasoning, so I doubt you'll be able to refi your rental until Nov-Dec (but let me know if you find out otherwise). Also the best you could get for rental is probably 4.125% for the past few weeks. Your home mortgage will be 6 months old in September, which means you can apply for refinance and get a 30-day lock in August, but it'll come down to an exact day in August that's probably at least ~150-155 days from when the mortgage was closed.

Depending on where you live, I suspect that you might get better terms if you get just one loan under the conforming limit of $424,100 and pay off the difference if you can. The fact that you have two loans for your primary home (405+25) might complicate things and make the refi more expensive. I'm surprised that you had the cash and decided to do 405+25 for your home -- care to explain?

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Bend3r said:   I don't think No-fee Refis are at 3.625% for 30yr.  I'm seeing around 3.875% for a 417k loan 80ltv (at the lender i used anyways, box, with my county selected.  Mauve someone else is really 0.25% lower and/or your areas closing costs are lower - have not checked zillow).  Which is certainly worth it, you can lower your rate 0.25%, ir ~$1k/yr in interest savings.

I'd suggest looking at no fee rates first to see if it makes sense. Then it's a separate question if the ~10yr break-even for paying down the rate any makes sense.
Whenever I look, Box is not and has never been better than the best lenders on Zillow.  Also conforming limit went up to 424100 from 417000.

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scripta said:   
Mrr82 said:   I'm thinking about refinancing....but I'm confused about paying fees. Some sites say there are no fees with certain banks, whereas other threads I read say people paid thousands in fees. Anyone have a recommendation of what company to go with?
Some mortgage originators charge more fees than others (aka lender fee or origination fee). Most (all?) of them will let you increase the interest rate in exchange for a lender credit, which can be used to offset the fees. I'd guess that on $300K-$400K loans, the credit will be about $3K for 1/8th of a point (meaning if someone quotes you $2500 in closing fees for 3.625%, the same issuer should quote you $500 in lender credit for 3.75%). This is just a guesstimate.

I always recommend the Zillow mortgage page, because lenders there are much more competitive than anywhere else. I also always recommend a slightly higher rate to pay nothing out of pocket, or better yet get some cash paid to you after closing (limited cash out refinance allows you to receive < $2K; if you take more it's considered a cash out refinance, which is more expensive than no cash out / limited cash out). 

  Yeah i also said to check zillow.  Didn't compare recently and there's lots of variables that affect who's lowest.  0.25% just seemed like more difference than I'd expect from past comparisons (with carefully comparing the quotes - they aren't always displayed equally including which 3rd party are shown in the estimates).  They were always lowest or within a couple $100 for my loan size (<$200k) over the time periods where I was looking at refis.  Zillow was higher on those terms back when I refi'd.  There is a fatwallet 1/8 point affiliate credit to add in and they also overestimated 3rd party in my quotes all the times I went with them.

$2k cash out for limited refi is generally true but not the whole story.  You are also allowed to roll the new escrow into the mortgage (and receive a refund after close of your old escrow balance).  Near the end of the year, where we are now, that can be significantly more than $2k.

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Bend3r said:   $2k cash out for limited refi is generally true but not the whole story.  You are also allowed to roll the new escrow into the mortgage (and receive a refund after close of your old escrow balance).  Near the end of the year, where we are now, that can be significantly more than $2k.This is true, but probably won't work for OP, because he only put 20% down just 6 months ago. I would only recommend this if he (1) is still able to stay under 80% LTV, and (2a) either can't bring the mortgage below $424100, or (2b) the rate difference between being under or over 424100 could be justified by all that cash he'd be taking out.

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scripta said:   
Bend3r said:   I don't think No-fee Refis are at 3.625% for 30yr.  I'm seeing around 3.875% for a 417k loan 80ltv (at the lender i used anyways, box, with my county selected.  Mauve someone else is really 0.25% lower and/or your areas closing costs are lower - have not checked zillow).  Which is certainly worth it, you can lower your rate 0.25%, ir ~$1k/yr in interest savings.

I'd suggest looking at no fee rates first to see if it makes sense. Then it's a separate question if the ~10yr break-even for paying down the rate any makes sense.

Whenever I look, Box is not and has never been better than the best lenders on Zillow.  Also conforming limit went up to 424100 from 417000.

  Was bored, just compared a couple refi rates.  For a TX $160k/214k loan, the top Zillow lender was net lender credit of $1394 (948+445, I removed appraisal from their credit rather than adding in third party fees to equalize) .  Box is $1065 credit, so it's ~$329 higher cost at the same 3.875%.  However, this is not the zero-cost rate, that's one rate higher and I could not figure out a way for zillow's search to show it.  At 4.000%, box is a credit of $1986.
Looking at zillow's second listed lender, Sebonic, at 3.875%, has a net credit of $767 and is $300 higher than Box.  Do you agree with the numbers I've pulled from these quotes to make the comparison?
Just because I know what to expect from Box I'd personally go with them a fourth time based on above quotes, through the same loan officer I have all three times before if I were to refi -- But my rate's already at 3.75 so not likely to have a new opportunity.  I also know what their preferred title co charges (which is not terrible), and I can even negotiate with them down to near entitledirect level.   If I were looking from scratch I'd definitely investigate First Bank and go with them instead if they checked out.


Now, I then reran with different variables -- a $255k/340k loan and the top zillow listed (same lender, "Consumer Direct/ First Bank") appeared to be ~$1000 cheaper at 3.75%, and sebonic around $500 cheaper than Box.   Again, no real zero-cost was listed on Zillow though -- Is there some trick to get more credits to show up on zillow's search or do you have to call them and they offer a higher rate/lower fee step than shown on Zillow?  I had applied the filter "No fees, no points" to get these one-away-from-zero-cost rate quotes.  If my loan was this size and I was looking to refi, First Bank looks a lot more appealing with the different variables as it has a $1000 rate gap.  From the limited dataset of 2, Box seems less competitive on larger loans and more competitive on smaller loans.

Always a good plan to compare all options, even if you have a few go-to places to throw in the mix.

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"No fees, no points" in the filter is what I always use. When the time is right and the difference between market rate and the nearest 1/8th of a point is large enough, you can get enough credits to cover all closing costs.

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scripta said:   Bend3r said:   I don't think No-fee Refis are at 3.625% for 30yr.  I'm seeing around 3.875% for a 417k loan 80ltv (at the lender i used anyways, box, with my county selected.  Mauve someone else is really 0.25% lower and/or your areas closing costs are lower - have not checked zillow).  Which is certainly worth it, you can lower your rate 0.25%, ir ~$1k/yr in interest savings.

I'd suggest looking at no fee rates first to see if it makes sense. Then it's a separate question if the ~10yr break-even for paying down the rate any makes sense.
Whenever I look, Box is not and has never been better than the best lenders on Zillow.  Also conforming limit went up to 424100 from 417000.


Depends on location. Around here jumbo loans don't start until 625500. Come on scripta. You are a Californian. Stop acting like a Midwesterner.

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conform said:   scripta said:   Bend3r said:   I don't think No-fee Refis are at 3.625% for 30yr.  I'm seeing around 3.875% for a 417k loan 80ltv (at the lender i used anyways, box, with my county selected.  Mauve someone else is really 0.25% lower and/or your areas closing costs are lower - have not checked zillow).  Which is certainly worth it, you can lower your rate 0.25%, ir ~$1k/yr in interest savings.

I'd suggest looking at no fee rates first to see if it makes sense. Then it's a separate question if the ~10yr break-even for paying down the rate any makes sense.
Whenever I look, Box is not and has never been better than the best lenders on Zillow.  Also conforming limit went up to 424100 from 417000.
Depends on location. Around here jumbo loans don't start until 625500. Come on scripta. You are a Californian. Stop acting like a Midwesterner.
Firstly it's not $625500 anymore, it's $636150, and secondly that's a "conforming jumbo" and it is more expensive than the <= $424100 conforming non-jumbo. I was replying to Bend3r's comment where he used 417K as an example. That happens to be the old limit, so I was just reminding of the new limit.

Also, couldn't a Midwesterner live in California?

Did you create an alt-id because you knew you were wrong?

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