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Refi - Options

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Established Contributor

Refi - Options

I planned to do Refi on my 9-month mortgage after seeing some rates drops recently. I have asked the lender for No cost refi.

 

What are my options on the table going with No cost refi?

 

Lender pulled my credit and it's in 744 across as I was told.

7/12/2019 FICO TU-815|EX - 787|EQ -809
Total Credit - $300K+
Starting Score: 640
Current Score: 785
Goal Score: 810


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Gardening since June/2019
Message 1 of 12
11 REPLIES 11
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Established Contributor

Re: Refi - Options

Well, I've never met an attorney, appraiser and loan officer that work for free, but as long as you realize that their 'fees' are hidden and paid for by the bank in some way shape or form and you are still getting a deal you are happy with then by all means go for it.

 

The rates on the US 10 YR Treasury bond yield (the barometer for mortgage rates in America) has plunged from it's high of 3.25% last year to 2.125% in the last couple weeks so the opportunities to refinance are out there to say the least and as a consumer, you can profit from this move by taking advantage of the opportunity.

 

Congrats!

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 2 of 12
Moderator Emeritus

Re: Refi - Options


@NC_Mtg_Loaner wrote:

Well, I've never met an attorney, appraiser and loan officer that work for free, but as long as you realize that their 'fees' are hidden and paid for by the bank in some way shape or form and you are still getting a deal you are happy with then by all means go for it.

 

The rates on the US 10 YR Treasury bond yield (the barometer for mortgage rates in America) has plunged from it's high of 3.25% last year to 2.125% in the last couple weeks so the opportunities to refinance are out there to say the least and as a consumer, you can profit from this move by taking advantage of the opportunity.

 

Congrats!


I suspect you're right on this one: I think no cost is basically not on the table; if OP's trying to do it without money out of pocket it's usually considered a cash-out refi and rolled into the loan as I understand it.  I know I absolutely positively won't be doing that in California, smokes my get free out of jail card if things really go sideways: I'll be bringing the fistful of cash to closing personally.

 

I need to go check rates again, been spot checking but didn't really look at the last few weeks.




        
Message 3 of 12
Established Contributor

Re: Refi - Options

My current mortgage rate is 4.625%

 

Is it worth if i get any refi rates of 0.5% reduced from my current one provided with no cost for refi? I am just guessing a number.

7/12/2019 FICO TU-815|EX - 787|EQ -809
Total Credit - $300K+
Starting Score: 640
Current Score: 785
Goal Score: 810


Take the myFICO Fitness Challenge
Gardening since June/2019
Message 4 of 12
Community Leader
Senior Contributor

Re: Refi - Options


@GetMeSlick wrote:

My current mortgage rate is 4.625%

 

Is it worth if i get any refi rates of 0.5% reduced from my current one provided with no cost for refi? I am just guessing a number.


The rule of thumb is if the increase is not at least 2% lower (2.625), it's not worth it and especially if you're not planning on keeping the home for another 7 years. However, 1.5% lower may be okay if you're not paying any closing costs. Just my 2cents

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Scores
JUN 2019: EX 788, TU 794, EQ 779
APR 2019: EX 787, TU 789, EQ 781
JAN 2019: EX 794, TU 783, EQ 801
DEC 2018: EX 777, TU 783, EQ 799

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Message 5 of 12
Established Contributor

Re: Refi - Options

Doesn't a no cost refinance just raise the APR? The fees just get devided over the life of the loan.
Message 6 of 12
Established Contributor

Re: Refi - Options

I get that part of refi pros being getting atleast 2% lesser than current rate.

What am i missing here if i do the refi now down the line/future refi's.

 

Will i still get refi offers in future if i do a refi now on my existing 8 months mortgage?

 

7/12/2019 FICO TU-815|EX - 787|EQ -809
Total Credit - $300K+
Starting Score: 640
Current Score: 785
Goal Score: 810


Take the myFICO Fitness Challenge
Gardening since June/2019
Message 7 of 12
Moderator Emeritus

Re: Refi - Options

That 2% line is just a recommendation TBH.

Do the actual math: there are good mortgage calculators online (I use Bankrate personally) and look at the current interest expected over the life of the loan vs what you would wind up paying with a refi... or at least until your expected sell date. In my case I expect to keep my current condo basically forever, if I pay it off I will be OK financially in retirement even if I do dream of being someplace closer to a good college or at least someplace with better mass transit.

Anyway back on topic, if that comes out winning compared to the origination fees, it can make financial sense if the amount is worth it to you.

If you have no fees (I.e the cost is rolled into the loan) and you are still saving money, that’s hard to turn down for what is a pretty darned easy process imo.



        
Message 8 of 12
Established Contributor

Re: Refi - Options

What's your loan balance?

 

 

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 9 of 12
Established Contributor

Re: Refi - Options


@NC_Mtg_Loaner wrote:

What's your loan balance?

 

 


$449k is current balance. 

7/12/2019 FICO TU-815|EX - 787|EQ -809
Total Credit - $300K+
Starting Score: 640
Current Score: 785
Goal Score: 810


Take the myFICO Fitness Challenge
Gardening since June/2019
Message 10 of 12