Meade
January 26, 2025, 4:30am
1
This is a good move, yeah?
Current Rate - 7.375%
Remaining Loan - $450,000
Current Mortgage + Escrow Payment - $3,580
30 year loan
Refi:
5 year rate - 5.75%
New Monthly Payment - $3000
Cost to Refi - $3000
Seems to me we would break even after 6 months, then see a monthly savings of $580. Am I missing anything here? 5.75 is appealing when we’re stuck in a loan at 7.375.
Amos
January 26, 2025, 4:30am
2
How is your cost to refi $3,000? Are there no escrows? Is this an offer from the loan servicer?
Bran
January 26, 2025, 4:30am
3
Amos said :
How is your cost to refi $3,000? Are there no escrows? Is this an offer from the loan servicer?
Title fees, lender has to charge something. $3,000 is pretty average. Title fees for Texas would push $2,200.
Harper
January 26, 2025, 4:30am
4
I’d probably do that if your numbers are correct.
Meade
January 26, 2025, 4:30am
5
Note, we plan on selling or refinancing again before the end of 5 years and will contribute $7,200 each year into the principal.
Bliss
January 26, 2025, 4:30am
6
Meade said :
Note, we plan on selling or refinancing again before the end of 5 years and will contribute $7,200 each year into the principal.
That assumes you’re maxing out your 401k, IRA, and have $30k in emergency funds. A recession is coming; timing depends on the economy.
Meade
January 26, 2025, 4:30am
7
@Bliss
In this scenario, I think the move would be to sell at the end of 5 years, rent, and hold cash for better days?
Mal
January 26, 2025, 4:30am
8
Meade said :
@Bliss
In this scenario, I think the move would be to sell at the end of 5 years, rent, and hold cash for better days?
If you end up underwater, you may not be able to sell for enough to pay off the mortgage. Cash is king in economic downturns.
Lior
January 26, 2025, 4:30am
9
Who is offering you this rate? Asking for purely selfish purposes.
Oakley
January 26, 2025, 4:30am
10
Lior said :
Who is offering you this rate? Asking for purely selfish purposes.
Also interested; my loan officer said ARMs are about the same as fixed right now?
Denny
January 26, 2025, 4:30am
11
Oakley said :
Lior said :
Who is offering you this rate? Asking for purely selfish purposes.
Also interested; my loan officer said ARMs are about the same as fixed right now?
I’m seeing ARMs start to be slightly better rates as of last week.
Sayer
January 26, 2025, 4:30am
12
You’re saving more than $580. Consider sending the savings directly to principal to cut your term roughly in half.
Yan
January 26, 2025, 4:31am
14
The political environment is a wildcard for interest rates when your ARM gets readjusted.
Riley
January 26, 2025, 4:31am
15
Where are you getting a 5.75 at? I’m seeing rates around 6.8.
Meade
January 26, 2025, 4:31am
16
Riley said :
Where are you getting a 5.75 at? I’m seeing rates around 6.8.
Ent Credit Union. We’re first-time home buyers and still qualify for the refinance.
Riley
January 26, 2025, 4:31am
17
Meade said :
Riley said :
Where are you getting a 5.75 at? I’m seeing rates around 6.8.
Ent Credit Union. We’re first-time home buyers and still qualify for the refinance.
I’ll give them a call! Thank you!