Refinance - Where to start?

[Anonymous]

Hi everyone!

We purchased our home back in 2006 (yes at height of high prices just before the great crash).  We had some troubles on and off for years after that.  Got behind and was able to get back on track with a crappy modification.  We had credit issues for a while but we have been on track with that for more than 5 years now.  No negative anything on our credit reports, util around 16% and scores ranging from 775-790, combined income of $140,000.  

We’d like to refi our terrible rate (6.5) to something much better as we plan to stay in this house for at least 7 more years (probably more) and we’d like to pay down as much as we can before we retire from our gov’t jobs in 7-8 years.   We owe about $340,000 and current value of our home hovers around $480,000. We’ve never done a refi so not even sure where to begin.  

We’d love to get as much info as possible so we are informed when we finally take the plunge.

Thanks!

Em

[NC_Mtg_Loaner]

I recommend folks to look at the #s you can obtain from mortgage calculators available at Bank Rate.com --no endorsement here.

Take a look at the #s you see for principle and interest payments for 10, 15 and 20 years would be my recommendation as well because this will allow you a great opportunity to keep your investment (aka payment) low but still aggressively lowering the overall principle balance further by looking out 5-10 years or  from now to see where you'd like your balance to be around the time you retire. 

Many lenders will even have some very good calculators on their websites showing rates and fees in real time that you can apply for immediately if you have your mind made up. 

[JVille]

Sit down with a Loan Officer at your local Credit Union. They will go over what is available and how it works. Very easy, the costs can be wrapped into the loan.

[homeloanexpert]

Should I refi or should  I not?

You're at that threshold where it is a valid question. We Loan Officers have some pretty cool tools available to us that can point out the advantages or disadvantages of refinancing. It factors in the cost, time remaining on your current loan (you are bringing down your principle balance at a higher rate now after 13 years), and potential savings.  In cases like yours I offer my borrowers a choice of amortization. Meaning they can choose how many years they want to payoff their loan, other than the traditional 15, 20, 30 year fixed.  I suggest reaching out to a LO and have them run numbers for you. I do this all the time for folks without having to run their credit.  If the numbers work, then you can choose to move forward.

[MauiMan85297]

Rates are in the 3's right now so it's best to act now while rates are at a 3 year low, you can do odd term years (as long as a lender has it, which we do) and get a lender credit to cover closing costs and part if not all of your escrow account.  You might be able to skip a payment or two.

It's a great market right now!

[Anonymous]

Your (or any) Credit Union is a good place to start, I also recommend Lending Tree online.  They will get your info out there and voila, you'll get flooded with offers.  There are deals out there to be had, even though rates have went up in the last 2 weeks or so. ~3.75 - 4.125%

Are you in an FHA or Conventional?  It would be a win either way.

I was able to lock in @ 3.375 with $50k cash out on 9/4.  I had 8 Loan Estimates.  My Credit union, along with 2 other lenders, provided rate, lender credit and closing costs matching.  I pitted the 2 against each other, then took the best LE to Canvas Credit Union here in Denver.

$250K loan amount, including $50k cash out, against a home value of $400k - LTV 62.5%

30 Yr Fixed Conventional

3.375 - $0 origination fees with $934 Lender Credit

$875 (Appraisal, credit report, fllod cert, tax service and income verification)

$995 Title services (I shopped these, down from $2600, $2300 and $1250)

So bottom line - $1027 Closing Costs or ~0.4% of loan value. I did not include taxes, prepaids and escrows for obvious reasons.

Last minute, I shopped the final LE, just to be told by multiple lenders, "lock that in and take it to the bank!"  and  "Hell of a deal!"  Boom!