Refinancing my house questions

[HKMurkure]

Absolutely (for a true simple interest loan). Part of the reason I mentioned no pre-payment above. I've never thought about it but what percentage of mortgages do you write (I assume you're in the business) do NOT allow pre-payments to apply to the principle and affect the interest calculation? I could be mistaken, but I think the only one I had was my first, since I distinctly remember having to make sure they at least allowed the one (and it was only one) time re-amortization I knew I was going to need. I needed it since I knew in short order I was going to pay it down to reach my 20% equity and get my PMI relieved.

GeauxLSU
I revised me response above, as you were correct. I had misread and my thumbs started taking over. After re-reading, we are saying the same thing, just differently. Yes, I am in the biz. I posted some screenshots to illustrate the example of paying $100 additional principal each month.

Prepayment Penalties are no longer allowed on QM (Qualified Mortgages). QM loans are your basic conventional/government fixed loans, etc.

 

[WallsGa]

HKMurkure is working with me on my refi currently.

I highly recommend him if you’re still searching for a lender. I’ve been very happy with the ease of the process and the money I’m going to be saving once the deal is done.

 

[GeauxLSU]

GeauxLSU
I revised me response above, as you were correct. I had misread and my thumbs started taking over. After re-reading, we are saying the same thing, just differently. Yes, I am in the biz. I posted some screenshots to illustrate the example of paying $100 additional principal each month.

Prepayment Penalties are no longer allowed on QM (Qualified Mortgages). QM loans are your basic conventional/government fixed loans, etc.

Whew. You had me questioning some things and I already have a headache.
But your edit mentions something that I assume most would know but hadn't been explicitly mentioned yet and probably should have been. That being, it doesn't matter how much extra you pay in one month, your full regular mortgage payment is still due the next month. A long time ago a very young GeauxLSU thought that sucked.

 

[HKMurkure]

And just an FYI folks, I have decided to be a sponsor here on the ODT. Be on the lookout for more info on Mtg financing, once I get set-up.

Until then, please feel free to PM me if you have any questions or want a no obligation quote.

Thanks all.

HK

 

[Nuke And Juke]

I know you were trying to keep it simple but this is materially incorrect. You have a continually declining principle on which interest is calculated. The savings in interest in the above scenario is only $8,839.13. Depending on the various closing costs and most importantly the time the person stays in the home it may or may not make sense to refi.

i get it...but like i said...rough math. Dave Ramsey tells people to pay down the smallest balance credit cards first. it can be said it's materially incorrect because it may not be the lowest rate card.

I can run the numbers and do the amortization but the point is to shop around

 

[GeauxLSU]

i get it...but like i said...rough math. Dave Ramsey tells people to pay down the smallest balance credit cards first. it can be said it's materially incorrect because it may not be the lowest rate card.

I can run the numbers and do the amortization but the point is to shop around

Yep Ramsey is wrong about a lot of stuff. But he deals in psychology. When it comes to personal finances, a lot of it is psychology it seems.

 

[jpm2953]

i just went through a refinance about a month ago. Only been in my house for 3 years and was paying PMI every month. Went from 4.25% to 3.25%. Payment dropped about $250 a month. Should break even on the refi cost in about 2 years. Dropped PMI too.

 

[MG4ME]

So, like the title says, I am thinking of refinancing my house. My current interest rate is 4% and my credit score is right around 800. The mortgage broker gave me a quote of 3% on a 25 year loan and an origination fee of $1,560 on the approximate $105,000 left on my current mortgage.

The broker said that the first two months would not have a payment due, but that one of those months' payments would be moved to the end of the loan. She made it sound like the other payment essentially seems to disappear and that my net cost of the refinance would be around $800. But I know that money does not just disappear, nor is it free. Can anyone help me figure out what is really going on?

Also, for any of you that have refinanced recently, what type of rate were you able to receive?

Thanks.

We refinanced when the rates dropped.

I highly doubt it will only add $1300 to your loan. Ours ended up at 10k but saved us $330/month.

They came highly rated from my mother who has been an agent for 30+ years.

We had only been in our house two years
This month though- $250k+ loan.

If you can really get one for only $1300 I would jump on it.

 

[gh1950]

Absolutely (for a true simple interest loan). Part of the reason I mentioned no pre-payment above. I've never thought about it but what percentage of mortgages do you write (I assume you're in the business) do NOT allow pre-payments to apply to the principle and affect the interest calculation? I could be mistaken, but I think the only one I had was my first, since I distinctly remember having to make sure they at least allowed the one (and it was only one) time re-amortization I knew I was going to need. I needed it since I knew in short order I was going to pay it down to reach my 20% equity and get my PMI relieved.

In Georgia, and most states,residential real estate loans can be pre-paid in whole or in part as a matter of law. I believe the feds have some regs to that effect, but I haven't kept up with them. Used to the lender could charge a prepayment penalty but that has been changed on residential loans. It may still be allowed on commercial real estate loans,

I'm surprised that no one has mentioned the easiest way to pay off your mortgage early. Split your monthly payment, no extra money required. If you make you payment on the last day of the month, next month pay half of it on the 15th and the rest on the monthly due due date. This one practice will save you thousands of dollars in interest.

 

[UptaCamp]

In Georgia, and most states,residential real estate loans can be pre-paid in whole or in part as a matter of law. I believe the feds have some regs to that effect, but I haven't kept up with them. Used to the lender could charge a prepayment penalty but that has been changed on residential loans. It may still be allowed on commercial real estate loans,

I'm surprised that no one has mentioned the easiest way to pay off your mortgage early. Split your monthly payment, no extra money required. If you make you payment on the last day of the month, next month pay half of it on the 15th and the rest on the monthly due due date. This one practice will save you thousands of dollars in interest.

Interesting, I have never heard of this practice.