Explain to me the what the benefits are to REFI - I am just not getting it.

[Anonymous]

I actually just looked on USAA and they are offering that rate to their members. Perhaps that is where the loan is from, if a VA loan the rate is lower. 5 and 1s and some 15 years are almost the same right now.

[Anonymous]

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Anonymous wrote:OP HERE - it was a 30 year mortgage to start and we are 8 years into it. So quite a bit of time left on it.

We had exact same numbers as you and did a 15 year refi at 3.25. Our payment went up $100, but we shaved 7 years off. Just crunch the numbers to see what is best.

Who did you use? We are currently with Navy Federal so no PMI involved, but I don't think that they will give the best deal on a REFI.

There's never no PMI involved if you didn't put down 20 percent.

The way Navy Federal works is that it builds the PMI into the rate. That's why your rate is so high at 6 percent, because your PMI is including in the rate (i.e. you pay a higher interest rate and the lender pays the PMI).

A lot depends on how long you plan on staying there as well as what your house will appraise for. If you do not have 20 percent equity in your house, then you will not be able to refi without paying PMI or building it into the rate (which means you aren't going to get as low a rate as everyone here is saying).

The first thing you should do is find out (look up some comps) what other houses are selling for in your neighborhood. You really need to know if you have 20 percent equity.

Or a VA loan...

Yeah, but I don't think that's what OP did. Navy Federal advertizes a 100 percent ltv loan with no PMI. And when I called about it, they explained it's a slightly higher interest rate. They pay the PMI out of the higher interest rate. At least that's how it was explained to me, because I saw the advertisements about no PMI, and I was curious.

Same poster here -- just a disclaimer: I didn't get a loan with Navy Federal, and it was about a year ago that I called for information about their loans (because of the no PMI thing). That's how the lady on the phone explained it, but I don't know details beyond that because I didn't go through with it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP HERE - it was a 30 year mortgage to start and we are 8 years into it. So quite a bit of time left on it.

We had exact same numbers as you and did a 15 year refi at 3.25. Our payment went up $100, but we shaved 7 years off. Just crunch the numbers to see what is best.

Who did you use? We are currently with Navy Federal so no PMI involved, but I don't think that they will give the best deal on a REFI.

There's never no PMI involved if you didn't put down 20 percent.

The way Navy Federal works is that it builds the PMI into the rate. That's why your rate is so high at 6 percent, because your PMI is including in the rate (i.e. you pay a higher interest rate and the lender pays the PMI).

A lot depends on how long you plan on staying there as well as what your house will appraise for. If you do not have 20 percent equity in your house, then you will not be able to refi without paying PMI or building it into the rate (which means you aren't going to get as low a rate as everyone here is saying).

The first thing you should do is find out (look up some comps) what other houses are selling for in your neighborhood. You really need to know if you have 20 percent equity.

Or a VA loan...

So they have no PMI in their loans? How much higher were there rates?

Yeah, but I don't think that's what OP did. Navy Federal advertizes a 100 percent ltv loan with no PMI. And when I called about it, they explained it's a slightly higher interest rate. They pay the PMI out of the higher interest rate. At least that's how it was explained to me, because I saw the advertisements about no PMI, and I was curious.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is it me or is the OP's rate absurdly low? 2.375%!!! That's way below the current rates.

Frankly, the whole thing sounds weird.

https://www.navyfederal.org/products-services/loans/mortgage/mortgage-rates.php

So if Navy Fed's rates are higher, since they have no PMI I am just not seeing it. That rates here are pretty darn low with good credit. I am assuming 20% equity.

[Anonymous]

Anonymous wrote:Is it me or is the OP's rate absurdly low? 2.375%!!! That's way below the current rates.

For a 15 year? Or maybe it's an ARM?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is it me or is the OP's rate absurdly low? 2.375%!!! That's way below the current rates.

Frankly, the whole thing sounds weird.

https://www.navyfederal.org/products-services/loans/mortgage/mortgage-rates.php

So if Navy Fed's rates are higher, since they have no PMI I am just not seeing it. That rates here are pretty darn low with good credit. I am assuming 20% equity.

The rates are higher if you DON'T have 20 percent down (i.e. don't have 20 percent equity).

That was the point, when the OP mentioned no PMI. If they didn't put down 20 percent and/or don't have 20 percent equity, lenders will either charge PMI or charge a higher rate and pay the PMI out of that.

If you are assuming 20 percent equity, it's a non issue, because there wouldn't be PMI anyhow (so their rates wouldn't be higher). The higher rates are only for a LTV of more than 80 percent (when lenders traditionally charge PMI).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Is it me or is the OP's rate absurdly low? 2.375%!!! That's way below the current rates.

Frankly, the whole thing sounds weird.

https://www.navyfederal.org/products-services/loans/mortgage/mortgage-rates.php

So if Navy Fed's rates are higher, since they have no PMI I am just not seeing it. That rates here are pretty darn low with good credit. I am assuming 20% equity.

On the same link you post, if you click on "100 percent financing" (the 100 percent LTV that I mentioned), the rates are higher.

[Anonymous]

Anonymous wrote:So my house is at a 6% interest rate - and I know that we could refi it and probably free up $350 from our mortgage a month. We plan to stay in the home another 6 years or so. DH is not inclined to do it because he is telling me that currently we are paying more on our principle and if we REFI we will no longer be paying as much on our principle.

I sort of see his logic. But aren't we paying more unnecessarily currently with the higher interest rate?

I would like to play poker against your husband.