"i want to refinance my house currently i am at 6.25 for 30year fixed, looking for 20 year fixed?

Question

the best offer i have got for 20 year fixed is 5.875 with out any points and 995 for the leanders fees which includes uprasel fees. escro and tax extra.
Please tell me what to do shoul i waite or go with the offerr i have got. i m ready to pay 1 point to get the rate lower but every leander have different offer on 1 point.

Answer 1

Im a loan officer as well, for 5 years, it all depends on how much money your saving over the term of the loan by shaveing off the years and if a little higher payment is worth it to you. I also would like to take a look at this and see if it makes sense

Answer 2

I would bet money that your refinancing to a 20 year fixed will not actually save you any money.

So you pay $995 lender fee. How much for tax, title, etc? That can easily run another couple grand.

It's not hard to find a calculator online that can show you what your payments would have to be to pay your existing loan off in 20 years. You are free to make extra payments at any time like that, and they'd have the exact same impact.

Shaving .375% off your rate, and paying $3000 to do so (plus you usually finance 1-2 months of interest!), you'll likely only save money at the tail end of this loan, which you're unlikely to keep for all 20 years.

Example: You owe $200,000 today at 6.25%.

You could begin paying $1461.86 per month as a principal & interest payment, and have it paid off in 240 months, 20 years.

Or, you refinance to 5.875%. But after lender fees, title costs, setting up a new escrow account, and the interest payoff on your existing loan, you end up having to finance $205,000 (very realistic, trust me).

You'll have 240 payments of $1453.94. You're saving less than $8 per month. $7.92 to be exact.

What's the true difference? First of all, you're now $5000 further in debt than you are today. Few people hold their loans to term, in fact it's probably about 1%.

Your break even period is halfway through your 237th month. That's right. You save 2.5 payments over 20 years by refinancing. And it's the last 2.5 payments. Which you have a 99% chance of not even being in that loan or that home long enough to make.

Find some online amortization calculators. Yahoo finance has them, bankrate, mortgage101.com, etc............ there's thousands of them out there.

Or email me your specifics and I'll do it for you and save you $5000.

Answer 3

You need to work these numbers a bit.

Assuming your mortgage is $500,000, your payment is currently $3078 per month, principal and interest. If you simply paid extra each month, and paid $3,654, you'd effectively have a 20 year mortgage at your current interest rate, with no additional fees.

Now, if you got a new loan for $500,000 at 5.875%, your 20 year payments would be $3,539 per month, so you'd save $115 per month. If you pay one point, that's $5000, so dividing $115 into $5000 means it would take 43 months just to recover that point. Until then, you're not better off. You also have some other fees to pay, such as filing fees, attorneys, and what not, so it'll be at least five years before you gain anything.

You already have the option of paying it as if it were a 20 year amortization. The interest rate is the only thing you'll be gaining. Is that difference enough to really justify paying a point, and losing the flexibility of paying the current payment?

Answer 4

well im a Mortgage loan officer, i can see if i can get u where u want. u just have to tell me where ur from? and ill see what i can do.