Mini Refi Boom--We just closed

[BridgetBordeaux]

Can't seem to find my original post that was made before the server migration. My update is that the recent low rates have caused a flurry of refi activity.

We agreed to a no closing cost refi and got a 4 percent rate. We then locked a little lower at 3 7/8 percent and agreed to pay for the appraisal out of pocket.

The biggest headache was the fact that the IRS is way behind in providing confirmation that the tax numbers we provided matched their official records. What used to take a day or two now takes almost a week.

We started our process about 2-3 weeks ago and we closed last night at our kitchen table.....yep...the attorney came to our house at 5pm for the closing!

 

[holycow]

That is GREAT! We close on Monday. I had hope to get a bit of a lower rate but the DH didn't want to pay out to lower it. I'm still glad we did it!

 

[tasha99]

I'm refinancing too--going from 4.25 to 3.25 (and from 30 to 15 years). It will shave a couple hundred a month off my mortgage.

 

[erin1715]

I'm going to jump on this bandwagon and ask a question or two about refinancing. My husband and I are looking into it, and if we refinanced and extended it to 30 years we would reduce our monthly payment by $140. If we refinanced at 15 years we'd be paying a few dollars more than we are now. We also plan to put our house on the market possibly this summer. So, would refinancing our current loan put us at any disadvantage for getting a new loan to buy another home so close together? And also, if we do refinance, is there any disadvantage to refinancing for 30 years, especially since we don't plan on staying in this home? I guess I would rather reduce our payment and refinance for 30 years instead of 15, and I don't see the benefit of refinancing for 15 years. TIA!

 

[chicagoshannon]

That actually seems fast. We are 2 weeks into waiting. When we refinanced 4 years ago it took 5 MONTHS!

 

[tvguy]

I'm going to jump on this bandwagon and ask a question or two about refinancing. My husband and I are looking into it, and if we refinanced and extended it to 30 years we would reduce our monthly payment by $140. If we refinanced at 15 years we'd be paying a few dollars more than we are now. We also plan to put our house on the market possibly this summer. So, would refinancing our current loan put us at any disadvantage for getting a new loan to buy another home so close together? And also, if we do refinance, is there any disadvantage to refinancing for 30 years, especially since we don't plan on staying in this home? I guess I would rather reduce our payment and refinance for 30 years instead of 15, and I don't see the benefit of refinancing for 15 years. TIA!

I don't think it would make any economic sense to refinance if you plan to sell in a few months. You need several years of payment savings to offset the refinance costs. And check with the lender, all 3 of my mortgages (first and 2 refis) required you to pay a penalty if you paid off the loan before 2 years after the loan was made.

 

[Shelly F - Ohio]

No to mention if you refi now and plan to move in 2015 this will be another hit on your fico score which may impacted the new home loan you take out. I would not refi now if I am going to put the house on the market.

 

[My3Princez]

I wonder if it is time for us to look into refinancing. We're sitting at 4.75% and would qualify for a streamline FHA refi ...
Time to start looking into it ....

 

[elgerber]

I don't think it would make any economic sense to refinance if you plan to sell in a few months. You need several years of payment savings to offset the refinance costs. And check with the lender, all 3 of my mortgages (first and 2 refis) required you to pay a penalty if you paid off the loan before 2 years after the loan was made.

That must be something in the area you are in? I have been in mortgage for 22 years and I have never processed a file with a pre payment penalty, except for a few in the sub prime loans back in the height of the market.
But I agree it makes no sense at all to refi if you are going to sell.

 

[supersnoop]

I recommend Pentagon Federal Credit Union (www.penfed.org) and their 5/5 ARM. It's at 2.75 right now, and they usually offer to cover the closing costs.

 

[erin1715]

Thanks all. The advice you gave was the same we received from the lender, so we won't be refinancing.

 

[tvguy]

That must be something in the area you are in? I have been in mortgage for 22 years and I have never processed a file with a pre payment penalty, except for a few in the sub prime loans back in the height of the market.
But I agree it makes no sense at all to refi if you are going to sell.

No clue, but if you Google it it seems to be nationwide, but less common than it used to be. Although freddiemac's website seems to indicate their mortgages have pre-payment penalties.
My experience with mortgages is the conditions lenders put in their loans can change wildly from year to year. For example, I bought my home with a 5% down. 4 years later I went to refinance with the same bank, and when I started the paperwork, the loan officer insisted that his bank had never written mortgages with that little down. Second visit, he had our original loan packet on his desk and seemed genuinely astonished that I was correct, and that my down payment had been just 5% of the purchase price.

http://www.freddiemac.com/singlefamily/pdf/ppm.pdf
http://www.zillow.com/mortgage-rates/finding-the-right-loan/pre-paying-your-mortgage/
http://money.usnews.com/money/blogs/my-money/2011/08/04/understanding-a-mortgage-prepayment-penalty
http://www.bankrate.com/finance/mortgages/6-steps-to-a-lower-prepayment-penalty-1.aspx
http://www.mtgprofessor.com/a - options/prepayment_penalty.htm

 

[Gumbo4x4]

We went to a 20-year, 3.75% loan a couple years back. Only "downside" is we now pay too little in interest to deduct any of it LOL.

We've refinanced several times (usually with little to no closing costs) & it's never taken more than 2-3 weeks. If it was as big of a pain for us as others, I doubt we'd have done it. yikes!

 

[tvguy]

We went to a 20-year, 3.75% loan a couple years back. Only "downside" is we now pay too little in interest to deduct any of it LOL.

We've refinanced several times (usually with little to no closing costs) & it's never taken more than 2-3 weeks. If it was as big of a pain for us as others, I doubt we'd have done it. yikes!

My experience too.