When to refinance
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Anonymous
| We took a 15 year mortgage last year at 6.99. Does it make sense to look at refinancing now? We would love to lower the payment. |
Anonymous
| Look when you can save 1 or 2 percentage points. How much longer on your 15? |
Anonymous
| We are waiting until it goes below 6 |
Anonymous
| OP here. we have 14 more years and 700k to pay off. |
Anonymous
what is your current rate? so you would refinance at, say, 5.8? we initially planned to wait till 5.0. but our monthly payment is huge. |
Anonymous
Restarting the 15 yr clock isn’t bad then. 1 pp is about 7K year. Weigh against closing costs and the possibility they could go down further and you have to do it again, or up and you’ve lost the opportunity. Personally I’d wait until hits 6 to think about. |
Anonymous
|
wait for a couple weeks until the Fed lowers interest rates, then refi.
Many mortgage companies/brokers will allow you to refi with no closing costs. If so, refi anytime rates decrease by 1%. Back in the 2010's, I refi'd 3 times in 6 years. |
Anonymous
Why wait for a 1% reduction if you are refinancing with no closing costs? I would do it with a 0.5% reduction...and just keep doing it. Mortgage rates are based on the 10-year treasury. At this point, the 10-year has baked in several rate decreases already, so not sure it will move much when the Fed lowers rates. |
Anonymous
Why did you go 15 year mortgage if you wanted a lower payment? |
Anonymous
Thank you. Any example of mortgage companies, perhaps something that worked for you? |
Anonymous
| Any time you can refinance at no cost to a lower rate. Any specific numbers are arbitrary. We refinanced to lower our rate by just .5, but there were no costs and given the size of our mortgage it saves us a few hundreds on interest every month. |
Anonymous
Thank you, I had no idea you could refinance at no cost. Was this your primary lender? |
Anonymous
Yes, it was with our credit union. We did not go for the lowest rate but instead took a credit for a slightly higher one. The credit was over 4k and the cost of the refinance was just over 2k in the end so we actually made money on it plus we have a lower rate. We refinanced three times in total in less than two years. The paperwork is a pain but it really paid off for us. You never know where the rates will go so if there is scope to save just go ahead and refinance. If they drop further you just refinance again. |
Anonymous
^ As an employee of a large mortgage provider, this is the correct answer. Also, almost done refinancing a 30y from 6.99% to 6.125% with no points. So, you are due up for a much improved rate if you are sticking with a 15y right now. |
Anonymous
what about increase in timing and increase in loan balance for refi? |