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depeche2

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Joined: Feb, 2002

Posts: 67006

Posted: Aug. 11, 2011 - 11:25 PM ET #1

I'm thinking I should do something. I refinanced in January 2009 into a 30-year @ 4.625%. My P&I is around $1,040/mo. I've been paying an extra $275/mo for awhile ($1,315 total) because I wanted to pay it off in around 20-21 years. My balance is now just under 190k. I could afford to pay more and pay it off in 15. Should I be looking into refinancing now into a 15-year mortgage. It seems like 15 years are way lower and if I'm going to be paying extra shouldn't I just bump it to a 15-year. I have top-notch credit rating, no issues there. I'm in Cook County, Illinois if that matters. What could I actually get right now for a 15 year mortgage now? Any suggestions on who to contact?

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wallstreetcappers

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Joined: Feb, 2003

Posts: 56778

Posted: Aug. 11, 2011 - 11:55 PM ET #2

Well look up a mortgage BROKER...not a bank, not a lender, go with a broker who has access to all the goodies out there.

When I looked the other day 15 yr mortgages are 3.4 and lower.

If you can get the loan I would do it in a second.

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depeche2

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Joined: Feb, 2002

Posts: 67006

Posted: Aug. 12, 2011 - 10:31 AM ET #3

Just talked to a broker. Looks like I can probably get 3.375% with minimal costs. How the heck can I pass on this? If my numbers are right I can knock off like almost 4 years worth at the end for like $30/mo more than what I was doing. 3.375% mortgage??? Never thought such a thing was possible. I thought 7.125% was good when I bought 10 years ago.

And people say this is a bad economy!?

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wallstreetcappers

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Posts: 56778

Posted: Aug. 12, 2011 - 11:06 AM ET #4

depeche,

Actually we are beneficiaries of market mistakes..the FED is suppressing rates for reasons we know, so we are the beneficiaries of these problems.

I see the 10 yr is down again today, make sure you get a float down on your rate lock..it could get even better.

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depeche2

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Joined: Feb, 2002

Posts: 67006

Posted: Aug. 12, 2011 - 11:17 AM ET #5

If you get a float down, do you pay more fees or something? I will mention float down when he calls me back today. Thanks!

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wallstreetcappers

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Posts: 56778

Posted: Aug. 12, 2011 - 11:34 AM ET #6

Quote Originally Posted by depeche2:

If you get a float down, do you pay more fees or something? I will mention float down when he calls me back today. Thanks!

You shouldnt pay more..typically a good broker will allow a float down option with no hassle or charge.

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depeche2

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Joined: Feb, 2002

Posts: 67006

Posted: Aug. 12, 2011 - 12:31 PM ET #7

Done, locking in today. I got 3.375% with about $600 total cost. 45-day float-down for 1/4 point or more drop. He said they can't float for just 1/8. I highly doubt rates are gonna fall 3.125%, but it'd be nice.

Thanks for the advice, wall.

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depeche2

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Joined: Feb, 2002

Posts: 67006

Posted: Aug. 12, 2011 - 12:36 PM ET #8

Now I can pay in 15 years what I was going to pay in 19 years for about a buck extra a day. I'm knocking off like $75k in payments in those last 4 years. Haha wow. Kinda excited now!

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wallstreetcappers

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Posts: 56778

Posted: Aug. 12, 2011 - 1:25 PM ET #9

depeche,

Its a good move without a doubt.

One thing to keep in mind, you are reducing your mortgage interest and you will notice less of a write off come tax time..with that aside it is for sure the right choice in the short and long run. Chopping off 75k in interest is awesome!

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sjewell29

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Joined: Sep, 2007

Posts: 1797

Posted: Aug. 15, 2011 - 11:22 PM ET #10

I thought earlier in the year when I got my 15 year at 3.75, it was great........ Good for you, and I'm by no means bitching, because I took 7 years off my mortgage for about 60 bucks a month more....

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be easy

MVP

Joined: Oct, 2006

Posts: 15433

Posted: Aug. 16, 2011 - 12:14 AM ET #11

Never thought such a thing was possible. I thought 7.125% was good when I bought 10 years ago.

I highly doubt rates are gonna fall 3.125%, but it'd be nice.

maybe it's time to rethink things

you did well here depeche, now when rates fall lower, you can re-fi into a 30 year @ 2.5%

FWIW, i don't understand the pay it down early concept

depreciating "asset" and falling rates, unless you can't put borrowed (tax preferential) money to work in your favor at a higher rate,,,,,,,

leverage to the hilt, it's free money

i'm waiting another couple months, i think with a brutal EOY we will see rates nudge down further, AND gov will get itchy to do something and me thinks that all spells lower rates

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UberDog

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Joined: Nov, 2008

Posts: 1597

Posted: Aug. 16, 2011 - 4:19 PM ET #12

Good work, Depeche.

I refinanced from a 7.25% for 30 years to 4.75 for 15 years one year ago.

Wall or others--how soon can I go for another refinance or is it worth it?

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wallstreetcappers

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Posts: 56778

Posted: Aug. 16, 2011 - 4:41 PM ET #13

Quote Originally Posted by UberDog:

Good work, Depeche.

I refinanced from a 7.25% for 30 years to 4.75 for 15 years one year ago.

Wall or others--how soon can I go for another refinance or is it worth it?

I would say go now..if you can snag a 3.25, thats a 1.5% drop..use one of those mortgage calcuators and see how much your payment drops and the ammt of interest.

Look up a mortgage broker locally and sniff out what you can get for really low closing costs, this is assuming your place will qualify and there are no problems of course.

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LuckyLuke

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Joined: Jan, 2003

Posts: 12654

Posted: Aug. 17, 2011 - 12:05 PM ET #14

the unwritten rule is - if you can get rate 1% lower then what you have it is worth it to RIFI.

I was in a mortgage 15years @ 4.25% that i got 6 months ago. Rates dropped big time. locked in @ 3.25% this week.

Easy way to understand--if you have the funds it is obvious to take the 15 year mortgage and save all the money in interest that would go to the bank in a 30 year mortgage.

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LuckyLuke

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Joined: Jan, 2003

Posts: 12654

Posted: Aug. 17, 2011 - 12:08 PM ET #15

also if the rate is very low (3%-4%) it is more intelligent to pay off your credit cards/student loans that have higher interest rates first.

Who knows if you will ever be able to borrow money at a 3% rate. remember depeche quote "I thought 7.125% was good when I bought 10 years ago."

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UberDog

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Joined: Nov, 2008

Posts: 1597

Posted: Aug. 17, 2011 - 1:22 PM ET #16

Quote Originally Posted by LuckyLuke:

the unwritten rule is - if you can get rate 1% lower then what you have it is worth it to RIFI.

I was in a mortgage 15years @ 4.25% that i got 6 months ago. Rates dropped big time. locked in @ 3.25% this week.

Easy way to understand--if you have the funds it is obvious to take the 15 year mortgage and save all the money in interest that would go to the bank in a 30 year mortgage.

Thanks for the advice. I am on this today.

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be easy

MVP

Joined: Oct, 2006

Posts: 15433

Posted: Aug. 17, 2011 - 5:34 PM ET #17

Quote Originally Posted by wallstreetcappers:

I would say go now..if you can snag a 3.25, thats a 1.5% drop..use one of those mortgage calcuators and see how much your payment drops and the ammt of interest.

Look up a mortgage broker locally and sniff out what you can get for really low closing costs, this is assuming your place will qualify and there are no problems of course.

actually it's more like a 30% drop

and yes, you go now Uber. Price out a 15 yr and a 30 yr (and a 20yr if they offer) and compare what it would cost you to borrow the money (for basically free) and choose to pay the extra against the principal on the 30 yr vs the 15yr. I would borrow infinite money @ 3%. You don't belong in this game if you cannot beat out 3%

No reason to be paying down principal on a declining asset, especially when the cost to borrow is 3 friggin %

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be easy

MVP

Joined: Oct, 2006

Posts: 15433

Posted: Aug. 17, 2011 - 5:36 PM ET #18

the unwritten rule is - if you can get rate 1% lower then what you have it is worth it to RIFI.

not sure about this.

if you go from 8% down to 7%, you are shaving off 12.5$%

from 3% down to 2% is 33% cheaper etc.,,,,,,

I bought with 7.125% money in 07
refi'd with 5% money in 09 and might wait a little bit to see if i can snag something in the 3's,,,,,,

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wallstreetcappers

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Joined: Feb, 2003

Posts: 56778

Posted: Aug. 17, 2011 - 9:35 PM ET #19

Quote Originally Posted by be easy:

actually it's more like a 30% drop

and yes, you go now Uber. Price out a 15 yr and a 30 yr (and a 20yr if they offer) and compare what it would cost you to borrow the money (for basically free) and choose to pay the extra against the principal on the 30 yr vs the 15yr. I would borrow infinite money @ 3%. You don't belong in this game if you cannot beat out 3%

No reason to be paying down principal on a declining asset, especially when the cost to borrow is 3 friggin %

Of course I meant a 1.5 pt drop..

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be easy

MVP

Joined: Oct, 2006

Posts: 15433

Posted: Aug. 17, 2011 - 10:07 PM ET #20

Quote Originally Posted by wallstreetcappers:

Of course I meant a 1.5 pt drop..

i wasn't trying to be a dick, i think people sometimes confuse the two concepts

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LuckyLuke

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Joined: Jan, 2003

Posts: 12654

Posted: Aug. 18, 2011 - 10:50 AM ET #21

Quote Originally Posted by be easy:

the unwritten rule is - if you can get rate 1% lower then what you have it is worth it to RIFI.

not sure about this.

if you go from 8% down to 7%, you are shaving off 12.5$%

from 3% down to 2% is 33% cheaper etc.,,,,,,

I bought with 7.125% money in 07
refi'd with 5% money in 09 and might wait a little bit to see if i can snag something in the 3's,,,,,,

You have a 5% and still didn't refi??? what are you waiting for? Jump on it

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depeche2

Legend

Joined: Feb, 2002

Posts: 67006

Posted: Aug. 18, 2011 - 11:47 AM ET #22

Seems like I jumped a bit too early. TNX made fresh lows today, back up a bit now. Gotta keep an eye out for this and call my guy if it falls further to see if I can float down to 3.125.

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wallstreetcappers

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Joined: Feb, 2003

Posts: 56778

Posted: Aug. 18, 2011 - 11:56 AM ET #23

depeche,

If your close isnt for another few weeks you might get to that 3 1/8 level.

One other thing..these rates move several times during the day, so if your broker is good he could be able to look at other products and find what you need..either that or see if he is willing to break the lock and let you get a better product.

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depeche2

Legend

Joined: Feb, 2002

Posts: 67006

Posted: Aug. 18, 2011 - 12:00 PM ET #24

Quote Originally Posted by wallstreetcappers:

depeche,

If your close isnt for another few weeks you might get to that 3 1/8 level.

One other thing..these rates move several times during the day, so if your broker is good he could be able to look at other products and find what you need..either that or see if he is willing to break the lock and let you get a better product.

Thanks. I'm going to keep a watch on TNX and maybe call if and when it falls below 20 again. Each 1/8 is worth like $11/mo so it's hardly worth getting crazy over. But if I can knock $22/mo for 15 years it's certainly not bad (almost 4k over 15 years).

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wallstreetcappers

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Joined: Feb, 2003

Posts: 56778

Posted: Aug. 18, 2011 - 12:06 PM ET #25

depeche,

I have been disappointed with how the 15 yr isnt dropping relative to the TNX, its like they are absorbing in risk or are trying to make a bit off the spread..the 10 yr has dropped a bunch more than the 15 yr in relative terms.

Since late July the 10 yr went from 3 percent down to nearly 2 percent today..yet the 15 yr rate has dropped from what 3.6-ish down to 3.3 to 3.2 or so?

Thats not how it has correlated in the past (that I recall anyway).

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