refinancing without huge cost?

[My2CrazyGirls]

People always say they refinance their mortgagebut when I plug the numbers in it will cost us 10k to 14k to refi. We would save 200 about month so our break even time would be 4 to 6 years. Of course it would add years to our mortgage since we are 4 years in already. Am I missing something?

 

[mrsklamc]

Check with a credit union. Our refi only cost the price of the appraisal, about $300.

 

[mrseace711]

We are paying $300 for our appraisal.

 

[chalee94]

even credit unions usually charge an origination fee to refi a loan. and if your home value has gone down in the last 4 years, you may be required to put more money in upfront (and possibly even if the value has been stable, as most lenders require a higher percentage down payment these days.)

if you have the money to put down, it's worth it to get in at these interest rates, though...assuming you are saving at least 1.00% (preferably closer to 2.00%) on the loan rate and the fees are not enormous.

i'm wondering if part of the $10-14k is a down payment though...

 

[Gr8t Fan]

We did a no cost refinance with Wells Fargo our existing lender and lowered our interest rate and the term of our loan. Have you checked with your current lender?

 

[Diegosmom]

a $0 cost refi does not mean you are not being charged to refi it just means they take the cost to refi (I have been seeing around $5,000) and add it to your load.

To OP I have been seeing what you see. I was told it would take me 5 years to see the savings but we honestly dont know if we will be in the house that long...I know I could save at least 2% but we dont have any upfront money to use.

 

[ICF]

I refi'd last year at a bank in town and I think the bank we used charged either $299 or $399.....

We've refi'd a few times and I dont think it was ever more than $1K in charges. There is no way I'd never ever pay $14K to refi.

 

[RitaE]

When I refinanced I think I paid for the credit report and a $50 application fee and the appraisal and then some miscellaneous title fees etc. All told me fees were under $500. My apr interest rate was also right at the lowest I could find.

Now I did have to pay down mortgage by about $12000 to get it under the 75% equity line but I don't consider that a fee. I was paying down the debt.

 

[platanito]

I would love to take advantage of the going rates, We were advised it would be around 4 years to break even and we could save almost 2% on the rate but we don't have any funds or pay down money to use. We have been quoted around in 10k closing cost and down payment to achieve 80% loan value that the credit union is willing to lend. If you have the opportunity to refi with these rates jump on it.

 

[allison443]

We refinanced with Valley National Bank for $499 total cost. There was nothing "added in" to our loan. If they are in your area you can try them.

 

[gracie1]

IU was going to refinance and the cost would've been $4k. However, because of the economy our appraisel didn't come back high enough. So it cost me $500 for nothing (well, the appraisel and credit report) but I didn't get to refinance

 

[DisneyLoverUSA]

We recently got our percentage rate on our loan reduced by 2%. There was no upfront fee but the financing charges or whatever they call it of almost $2k was added to the loan amount to be refinanced.

 

[rszdtrvl]

IU was going to refinance and the cost would've been $4k. However, because of the economy our appraisel didn't come back high enough. So it cost me $500 for nothing (well, the appraisel and credit report) but I didn't get to refinance

Our appraisal didn't come in high enough so we had to pay for some sort of additional insurance on our mortgage until we reach a certain amount of payments and then the insurance will drop off and our payment will go down.

Fine by us though, although we were irritated that the house next to ours - IDENTICAL to ours - just sold a year prior for $120,000 but our house appraised at only $45,000 (approx.) with major upgrades (new windows, insulation, floors).

We ended up going for a 15 year mortgage, which shaved 8 years off our original 30 year mortgage, and are only paying an additional $40/month. We refinanced through our credit union, and I believe the appraisal cost around $400, although if we wanted, they could have added it into the amount we currently owed on the house (or something like that).

Our house will be paid off in 14 years. Sweet!!!

 

[mrsklamc]

a $0 cost refi does not mean you are not being charged to refi it just means they take the cost to refi (I have been seeing around $5,000) and add it to your load.
.

Nope, ours was literally, no cost other than the appraisal fee.

 

[SleepyatDVC]

We did a no cost refinance with Wells Fargo our existing lender and lowered our interest rate and the term of our loan. Have you checked with your current lender?

Did you call them directly?

I tried to do it online a few months ago and couldn't do it, had to call instead but I never followed up.

What were the requirements to refinance directly with WF? Do you know what the current rates are now? Online it says 4.250% but that is for new and with an "origination fee" of 1% I think.

Trying to figure out if it is worth it to refinance from an existing 4.875% loan that is only 2 years in out of 30 years. We don't plan to move for a LONG while until my DD10 is in college or maybe longer...

Thanks for any insights from anyone!

 

[mrsklamc]

In addition to not paying any closing costs or origination fees, our credit union does not do PMI regardless of your loan to value. Absolutely worth looking into a credit union.

 

[Gr8t Fan]

a $0 cost refi does not mean you are not being charged to refi it just means they take the cost to refi (I have been seeing around $5,000) and add it to your load.

To OP I have been seeing what you see. I was told it would take me 5 years to see the savings but we honestly dont know if we will be in the house that long...I know I could save at least 2% but we dont have any upfront money to use.

Wrong. We've refinanced 2x with Wells Fargo - first was a traditional refinance (from a 30 to a 15) with closing costs rolled into the loan. The second time was a streamlined "no cost" refinance where we reduced the term of our loan from 15 years to 10 years at no additional cost to us. We had to meet certain terms -- like having had an appraisal within the last 3 years and a few other things, but it did not cost us one dime to do it the second time.

 

[Gr8t Fan]

Did you call them directly?

I tried to do it online a few months ago and couldn't do it, had to call instead but I never followed up.

What were the requirements to refinance directly with WF? Do you know what the current rates are now? Online it says 4.250% but that is for new and with an "origination fee" of 1% I think.

Trying to figure out if it is worth it to refinance from an existing 4.875% loan that is only 2 years in out of 30 years. We don't plan to move for a LONG while until my DD10 is in college or maybe longer...

Thanks for any insights from anyone!

I was able to do everything online but that was in 2004. We had to have 75% equity in the home and an appraisal within the last 3 years. We were asked to verify that we were both still employed in the same jobs, and that we hadn't declared bankruptcy and a few other things, and they sent a "close at home" package. We just had to sign, have our signatures notarized, send the documents back by FedEx and they sent our new loan docs back out to us the same way.

For us, the main advantage is that we shortened the term of our loan from 15 years to 10 years and our payment didn't go up by too much. We've been paying extra on it as much as we can and we're actually only 4 payments away from paying it off completely!!!!

 

[mom of princessx2]

a $0 cost refi does not mean you are not being charged to refi it just means they take the cost to refi (I have been seeing around $5,000) and add it to your load.

Wells Fargo does do a no cost refi because we did it last year as well. However the new rate given is not as low as current mortgage rate but it is a good option for someone that does not have many years left on their mortgage and wants to get a lower rate.