Just Refinanced!!

[Kate and Pete]

Thanks to the many threads on refinancing here on budget board, DH and I decided to try it out. I just finished talking with the rep from Bank of America (they already had our mortgage - AND could offer us the best deals...) and all we have to do is sign the paperwork! We've gone from 6.5% to 4.8%! AND, we were able to drop our PMI - for a total savings of around $160/month!

While we were at it, we dropped our cable (we only had basic programming, and never watched it) - saving $20, and changed phone/internet providers - saving $30!!!! So, a savings of $210/month!! We need it right now - we used to always have a huge savings account, and now we don't, so it'll be nice to have a little boost to help us get one started again and up to where we feel comfortable.

So, for everyone who might say that the threads just aren't relevant to you - I would've never done all this if I hadn't watched you other budgeters do it, too - so THANKS!!!!

 

[kimisabella]

We are in the process of re-financing w/Bank of America also. They also currently hold our mortgage. Just curious, are you paying closing costs? They would not offer any deals on the closing costs, which are almost $14K, just a small "discount" because they already hold the mortgage.

 

[ceecee]

14,000 in closing costs??? We paid a flat $250 when we refinanced.

 

[mamaLori05]

We are in the process of re-financing w/Bank of America also. They also currently hold our mortgage. Just curious, are you paying closing costs? They would not offer any deals on the closing costs, which are almost $14K, just a small "discount" because they already hold the mortgage.

we just refinanced also. We went through a local bank that already holds our mortgage (so not Bank of America) but we didn't have any closing costs. We didn't have to pay a dime!! If you do, then I would definately look around!!!

 

[rlduvall]

We are in the process of refinancing right now, also. Our closing costs are going to run about $5,000., but the bank will pay $1,000. of that [because I told them no thanks after I was originally told it would only be about $2,500. I hate "bait and switch]. That also includes about $2,000. in escrows. We are going to a 15 year note for 4.25%, but we may let the 60 day lock expire because it has gone down even lower.

 

[ilovepete]

Wow that is great!

 

[thebeesknees]

That's great! We've been thinking about refinancing, too, but so far the rates haven't dropped enough to make it worthwhile for us. We currently have a fixed 4.25% on a 15-year loan, and DH figured out that it would have to go to 3.75% for us to make back what we put into closing costs. BoA holds our current loan, and the guy I talked to there basically laughed when I asked him what the best rate we could get right now would be, since we are already getting their best rate according to him. But I figured it was worth the call, anyway, just to see. And on the bright side, they put me in the system for an auto-notification if the rate drops to 3.75%.

 

[SKWDW]

Congrats OP! That's great Budget Board news.

We're in the "engagement phase" of refinancing with Wells Fargo right now. They hold our current mortgage and have been "courting" us to re-fi at a lower rate. We were at 6%, 1-1/2 years into a 15-yr fixed. They are offering us 4.25% and no "extra" closing costs. To them that means that we have to pay recording fees and title insurance. That change will lower our payment $500. We're going to continue to pay the old amount so we can get the balance paid off earlier.

I agree with PP that if your lender wants to charge you that much for closing costs, then you should skip them and shop around!

 

[Kate and Pete]

$14000 is crazy!!!! Our BoA closing costs are $3500. I wouldn't pay them $14000!

 

[Swimalie]

Congrats on all the savings. We're refinancing right now too. We're dropping from 5.75 to 4.25 on a 30 year conventional. We'll save about $290 a month More for the savings account

 

[neile45]

14,000 in closing costs??? We paid a flat $250 when we refinanced.

who did you refinance through?

 

[kimisabella]

$14000 is crazy!!!! Our BoA closing costs are $3500. I wouldn't pay them $14000!

Unfortunatley this is NY, we don't have too much of a choice.

 

[StefnMike]

Unfortunatley this is NY, we don't have too much of a choice.

It sucks doesn't it? We can't refinance because we are under water, but even if we could, the difference between our current % and the new % would have to be huge to cover the CC. We paid over $20k the first time around.

 

[DisneyWatchMan]

We are in the process of refinancing right now, also. Our closing costs are going to run about $5,000., but the bank will pay $1,000. of that [because I told them no thanks after I was originally told it would only be about $2,500. I hate "bait and switch]. That also includes about $2,000. in escrows. We are going to a 15 year note for 4.25%, but we may let the 60 day lock expire because it has gone down even lower.

The "closing costs" are actually $2000. You can't count the escrows because you would have to pay your taxes and insurance even if you didn't have a mortgage. $2000 is reasonable for the Chicago area.

By the way, for those who believe they are not paying closing costs, they usually are by paying a higher interest rate.

For those who are paying $14,000 in closing costs, you are probably paying "points" or up front interest to permanently buy down your interest rate.

 

[travelbug]

Congrats on your refinance and your other lower expenses! Cutting expenses by $210 is terrific -- you did a great job!

I'm also closing on a refinance this week. I'm going from a 25-year mortgage at 6.25% (I had about 17 years left) to a 15-year at 4.375%. Closing costs are $1050, which I'll pay up front instead of rolling in.

I shopped around the rate and the closing costs. My mortgage has been with Chase (after they bought out WaMu), so I checked to see what they would offer. They weren't even in the same galaxy as the other places I checked with. They quoted 5.5% and $3500 closing costs. All the other places were quoting 4.375 or 4.5 and $1000-2000 closing costs. So it was pretty easy to decide to walk away from Chase.

 

[rlduvall]

The "closing costs" are actually $2000. You can't count the escrows because you would have to pay your taxes and insurance even if you didn't have a mortgage.

Right, that's why I said that. I think we all tend to group it together when we say "closing costs." And when I was told $2,500. originally in costs it included the escrows. I definitely understand real estate.

 

[jessrose18]

We are refinancing as well with usbank. We couldnt shop our mortgage because we carry pmi.. We are getting 4.95 for a 30 year where usbank covers 3,500 of closing costs. We will have to start the new escrow account and cover part of the title insurance. 4.35 was the interest rate if we wanted to cover closing costs, payment would have been /$25 bucks lower a month, but we didnt want to add equity to our loan becuase of our pmi ratio. We saved $130 a month in interest adn $50 a month in pmi, our old interest rate was 5.45%. I am glad we looked into it, worth it for us. Ontop of getting to skip a mortgage payment and getting our old escrow account back at closing. Good luck to anyone thinking about refinance!

 

[mamaLori05]

Congrats on all the savings. We're refinancing right now too. We're dropping from 5.75 to 4.25 on a 30 year conventional. We'll save about $290 a month More for the savings account

that's what we got too!!!!! It was GREAT!!!

 

[mamaLori05]

The "closing costs" are actually $2000. You can't count the escrows because you would have to pay your taxes and insurance even if you didn't have a mortgage. $2000 is reasonable for the Chicago area.

By the way, for those who believe they are not paying closing costs, they usually are by paying a higher interest rate.

For those who are paying $14,000 in closing costs, you are probably paying "points" or up front interest to permanently buy down your interest rate.

not true in our case. We paid $0 in closing costs and got a 30 yr mortgage at 4.25%.

 

[Mary•Poppins]

Here is a GREAT website I located from The Boglehead boards. It is great for answering questions about mortgages.

http://www.mtgprofessor.com/home.aspx

And also, ask lenders to supply you with the new HUD GFE form!! This helps borrowers compare deals. A lender is "suppose" so supply you with this if you ask (be sure it is the HUD form). It is actually a legal document that was just created by the government in Jan. If they don't supply this, ask them why.