I got in touch with one of the brokers my real estate agent recommended. He sent me three possible refi options. None of them involve a lower interest rate than what we have, and two of them are higher. He said it's really expensive to refi to lower than 3.5% for a 30-year loan right now.
So I'm pondering the one that keeps the interest rate at 3.5. I really don't want to go higher, because the other parts of the mortgage payment could go higher in subsequent years as property taxes and insurance premiums rise. I need to keep that flat part of the payment, the principle and interest, as low as possible, I think.
He doesn't think there's an actual escrow shortage, just that the balance isn't where the current lender would like it. So it's possible there's nothing to pay off there.
The 3.5% one is the most expensive, of course; it would involve $7300 closing costs and putting $1700 into escrow. All of that could be rolled into the principal bringing our loan from $403K to $412K. Again, I'm really reluctant to bring the principal back to where it was a year ago. So I'm thinking if I go for this, I'd bring $2K to closing to at least bring the principal increase a little lower.
The old (new) payment is about $3102. The new new one, if his projections pan out, should be $2622. That's a $480 difference! I could use that savings over the next 4 months to fund the $2K I'd bring to closing, and then we'd start 2017 with a much nicer budget surplus.
The $9K added to principal/closing cash would be offset by saving $264 per month on mortgage insurance. Looks like that would pay for itself in about 3 years. Seeing as how the mortgage insurance is here to stay, that's probably worth it.
So, I'm thinking about trying for it.
Refi options
August 9th, 2016 at 03:40 am
August 9th, 2016 at 04:03 am 1470715399
The other problem will be the appraisal. The more you borrow, the higher the appraised value has to be. It would be a shame to pay for the appraisal and not get the loan.
August 9th, 2016 at 11:09 am 1470740970
August 9th, 2016 at 12:21 pm 1470745262
AnotherReader, that AIMloan place is advertising lower rates for the same closing costs but consumer reviews are really mixed on them. What's their deal? I'm not very knowledgeable about refis so would that make an online place a ad idea?
August 9th, 2016 at 01:03 pm 1470747838
In your shoes, I would shop around before choosing a lender. I'm not a fan of ARM's. It appears interest rates will stay low, but there is no guarantee.
August 9th, 2016 at 01:35 pm 1470749751
August 9th, 2016 at 10:03 pm 1470780208
I would consider calling them and seeing what they can do for you. I was pleasantly surprised at their customer service, attention to my questions and how smooth the process went. They also send a mobile notary to my home for the closing - I didn't have to go anywhere - and the process was all online for sending in documents and them keeping me in the loop. I could ask questions via their online service and they got back to me right away. They gave me multiple scenarios when I could not decide how to structure the loan (pay closing out of pocket or wrap in - I choose to pay out of pocket). And they gave me a better rate than I was expecting (or hoping for) based on conversations with two brokers. And they will service the loan - not sell it like my last broker did.
August 10th, 2016 at 02:56 pm 1470840963
I emailed back and forth with the second broker, but we didn't speak the same language at all. I couldn't even tell what he was offering but I noticed he didn't offer 3.5% or lower in his estimate thing.
I called Quicken and they could give me $3K closing costs, but my interest rate would go up to 3.75%. For 3.5% it would be $8,000 closing costs, which is more than the first broker I contacted offered for 3.5%.
Looks like I'm still leaning toward broker #1.
August 10th, 2016 at 05:05 pm 1470848726
Rates have been bouncing around for the last few days. They were down a little yesterday. I might call broker #1 and tell him you are looking for 3.25 percent with lower costs or you might take a little higher rate with no costs. Tell him you want to make sure the property will appraise but you cannot come out of pocket to pay a lot of closing costs. Let him know you are shopping multiple lenders and for him to call you ASAP when he can meet your terms. Between lower rates and his sharper pencil, I think you can can do better than what he offered.