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Old 10-08-2012, 09:21   #1
Drjones
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Should I refi my loan?

I'm considering taking advantage of ultra-low mortgage rates & refinancing a condo that I own & now rent out.

The loan balance is currently approx. $117K and currently at 4.75%.

I can refi down to 3.5% but the lender wants to charge about $2,600 in fees which seems pretty high. I refinanced about two years ago; I believe I went from 6% to 4.75, and I do not recall the fees being that high.

I don't know if, with this particular lender, if I have to come up with the cash or if it gets rolled into the loan; haven't asked yet.

Anyway, all said & done would save me about $80/mo.

Should I do it? Should I keep shopping for a lender with lower fees?

Thanks
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Old 10-08-2012, 09:25   #2
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I owe $139,xxx. Got 28 years left at 5.25.

We're considering a 15 year note. I think our payments will go up slightly, but DAMN look at what we'd save over the life of the loan!!!

DrJ -- I wouldn't do it unless you consider a 15-year note.
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Old 10-08-2012, 09:33   #3
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Saving 1.25 in interest for $2600 in fees seems high.

Shop around and see what's out there.

Your return on investment is about three years, so it's not bad. If you stay in the house for the long haul you will save a bundle, but I bet there are better deals out there, especially if you have great credit.
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Old 10-08-2012, 09:53   #4
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Jim, I do have very good credit and I am going to keep this property for a very long time as an investment/rental.
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Old 10-08-2012, 10:34   #5
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I've had ~$133k-ish outstanding at a 5.375% rate.... 27 years remaining.

In the process of refinancing for 15 years at 2.875% (I think that's right)...
All closing costs baked in to the final number crunching..

AND my monthly note just dropped almost $200.

Re-fi through Wells Fargo, if that makes any difference to anybody...
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Old 10-08-2012, 10:37   #6
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Quote:
Originally Posted by USMCsilver View Post
I owe $139,xxx. Got 28 years left at 5.25.

We're considering a 15 year note. I think our payments will go up slightly, but DAMN look at what we'd save over the life of the loan!!!

DrJ -- I wouldn't do it unless you consider a 15-year note.
See my post above..
I actually had almost the identical situation you describe..

The first lender I contacted offered to take me from 5.375% to 3.1something .... 27 yrs remaining on the original loan, going to 15 years... with the closing costs baked in, my monthly note would have gone up about $165/mo..

...sought a different lender (Wells Fargo) about 2 weeks later (RIGHT before I was about to send in the final paperwork)..
Again, see my previous post.

I think I locked into that 2.875 rate about 2 weeks ago... have no idea what can be had today..
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Old 10-08-2012, 11:56   #7
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Quote:
Originally Posted by Drjones View Post
I'm considering taking advantage of ultra-low mortgage rates & refinancing a condo that I own & now rent out.

The loan balance is currently approx. $117K and currently at 4.75%.

I can refi down to 3.5% but the lender wants to charge about $2,600 in fees which seems pretty high. I refinanced about two years ago; I believe I went from 6% to 4.75, and I do not recall the fees being that high.

I don't know if, with this particular lender, if I have to come up with the cash or if it gets rolled into the loan; haven't asked yet.

Anyway, all said & done would save me about $80/mo.

Should I do it? Should I keep shopping for a lender with lower fees?

Thanks
How long will it take you to recover the refinancing charges at $80 per month?
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Old 10-08-2012, 12:32   #8
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I refinanced a few months back from a 4.75 to a 3.99, the fees would pay for themselves in 16 months, I'm going to be here at least 10 years so it was worth it.

Figure out how long to break even and if you'll be there long enough.
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Old 10-08-2012, 14:11   #9
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Quote:
Originally Posted by muscogee View Post
How long will it take you to recover the refinancing charges at $80 per month?

Looks like about 3 years...
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Old 10-08-2012, 14:59   #10
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Quote:
Originally Posted by Drjones View Post
Looks like about 3 years...
That's your break even point.
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Old 10-08-2012, 15:03   #11
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Go for a 15 year loan... I love mine!!!
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