That sounds about right. Our current rate is 3.5% and when I recently explored it wasn't going to be worth it to refinance, so I think they're around that level or a little lower.

If you can check a 15yr. Significant savings vs the 30yr right now if you have already paid off some of your principal. It may actually be a very close payment to what you currently have. We are seriously considering it.

Just looking to see if others are hearing better rates from their brokers/bankers. I've run the numbers for the different scenarios.

Rates haven't moved as much as I would have hoped. Watching closely... my broker told me to be patient...

Robert_Casotto said:

Recently locked in a 2.75 on a 15 yr fixed.

Thanks This is what I'm looking for.

Check with GardenStateLoans. They got us an amazing rate on our refi a few years ago that is still hard to beat (3.25% on a 30yr). Ted helped us out. I think they were advertising 2.5 or 2.75 on a 15yr.

pmartinezv said:

Check with GardenStateLoans. They got us an amazing rate on our refi a few years ago that is still hard to beat (3.25% on a 30yr). Ted helped us out. I think they were advertising 2.5 or 2.75 on a 15yr.

Thanks.

Still don't understand if one should refi as the interest years goes back up, right?

krugle said:

Still don't understand if one should refi as the interest years goes back up, right?

Huh? Please rephrase.

Ha, I know, sound like a fool.

Ok, so when one has a mortgage, the interest is primarily paid early on. thus, as the loan moves on through the years, less and less interest is paid, right?

So, is it smart to refi as the interest starts up again at the top?

Finance is not my game, so don't know how to phrase this. Thanks

You might refi to lower your monthly payment or switch from a 30- to a 15-year (or other shorter term) loan to reduce the overall cost. You might want to take cash out for improvements or some other reason. Depending on your tax situation, the deduction for mortgage interest might be an advantage. The finance minds here may have other suggestions.

We are considering a cash-out refi, and I have three questions:

1) would the rate be higher than a typical refi?

2)we have a mortgage and a substantial HELOC (nowhere near under water...we probably have 50% equity) if we refi can we just combine them into one new mortgage? Would that be considered cash-out, since it's more than the 1st mortgage?

3)is there anything I have to look out for?

One thing to be aware of is you will likely need to close your HELOC. That was why we decided not to move forward with a refi. Even with a cash-out option we wanted to keep the line open for future projects, and didn't want to go through the hassle of applying for it again.

We had a great experience in 2012 w/ Atlantis Mortgage to refinance our 30 year to a lower rate. Feel free to PM me for my contact's name. At that time, the only fee was for something small, maybe the appraisal? It was much better than our mortgage experience elsewhere when buying in 2009!

krugle said:

Ha, I know, sound like a fool.

Ok, so when one has a mortgage, the interest is primarily paid early on. thus, as the loan moves on through the years, less and less interest is paid, right?

So, is it smart to refi as the interest starts up again at the top?

Finance is not my game, so don't know how to phrase this. Thanks

I think I understand you now.

Before the refinancing, assuming that you have a fixed-rate mortgage, the payment is fixed and the are correct that in the early years, the amount paid to interest is high and the amount paid to principal is low. Over time, with each payment, a little less interest is paid and a little more principal is paid until the last payment is almost all principal.

When you refinance, and assuming that you do not take any cash out, you are only refinancing the balance of the loan first loan. Assuming that you do not extend the overall term compared to when you were going to pay, the amount to interest paid each month will not "jump up". If your new interest rate is lower, then you are going to pay less to interest and the overall payment should go down.

The amount paid each month to interest is based only on the amount you still owe and your interest rate. Period. As long as you don't increase the amount you owe by taking cash out, the amount paid to interest each month will not go up.

krugle said:

Still don't understand if one should refi as the interest years goes back up, right?

Not necessarily. As an example, I'm a little under five years into my current 30 year mortgage and am refinancing into a 25 year mortgage (I'll actually make two or three fewer payments over the life of the loan).

debby said:

We are considering a cash-out refi, and I have three questions:

1) would the rate be higher than a typical refi?

2)we have a mortgage and a substantial HELOC (nowhere near under water...we probably have 50% equity) if we refi can we just combine them into one new mortgage? Would that be considered cash-out, since it's more than the 1st mortgage?

3)is there anything I have to look out for?

1. Yes, it would be a little higher.

2. Yes. I've been told anything other than purchase money is considered cash out..

3. Fees.

The amount of interest and principal you pay is calculated every month based on the loan outstanding amount, yet the payment amount is the same each month. So as you pay down the loan, the interest calculated is less allowing more principal to be paid down. The amount of interest you pay is based on your interest rate. So if you refinance the outstanding balance with a lower interest rate, you will be paying a lower interest amount.

To better see how this works, check the Amortization Schedule on your loan and compare it to any new loan rate. You will see the interest and principal paid for a set payment amount. This will allow you to compare and see if there are any significant savings. You want to make sure that any refi you do has the least amount of fees possible as that increases your borrowing costs and takes away from your savings.

Typically you want to refinance when the interest rate is at least .75% lower than your current rate to really see any meaningful savings that are worth going through the exercise.

debby said:

We are considering a cash-out refi, and I have three questions:

1) would the rate be higher than a typical refi?

2)we have a mortgage and a substantial HELOC (nowhere near under water...we probably have 50% equity) if we refi can we just combine them into one new mortgage? Would that be considered cash-out, since it's more than the 1st mortgage?

3)is there anything I have to look out for?

1) A refi rate is typically the same regardless of the reason for refi. Typically the rates are set based on your credit score, LTV (loan to value) and property type (condos are higher than single families for example).

2) It depends on the bank who has the HELOC. Some banks will allow you to keep the HELOC open as long as the bank holder agrees to be the "second mortgage". You will need to reach out to the refi lender and the HELOC lender to determine what they are willing to do. The Refi bank will likely require that they are the primary lien holder.

3) Fees. Make sure there are no hidden fees.

If you have a HELOC which has a significant balance, and it has a higher rate than you can get for a fixed, you are better off paying off the HELOC during a refi by moving the balance to the new mortgage. This allows you to secure a lower fixed rate since HELOC is typically variable and eventually rates may move up.

pmartinezv said:

debby said:

2) It depends on the bank who has the HELOC. Some banks will allow you to keep the HELOC open as long as the bank holder agrees to be the "second mortgage". You will need to reach out to the refi lender and the HELOC lender to determine what they are willing to do. The Refi bank will likely require that they are the primary lien holder.

If you have a HELOC which has a significant balance, and it has a higher rate than you can get for a fixed, you are better off paying off the HELOC during a refi by moving the balance to the new mortgage. This allows you to secure a lower fixed rate since HELOC is typically variable and eventually rates may move up.

Both the mortgage and the HELOC are with Wells Fargo, so lien holder will not be an issue.

This is my thinking - that it's a chance to lock it into good rate.

can get a 2.5 on a 15 yr for conforming. unfortunately, high cost Essex County (NJ) is not considered high cost enough for conforming loan purposes.

Did you pay points?

Robert_Casotto said:

Recently locked in a 2.75 on a 15 yr fixed.

krugle said:

Thanks for explaining this to me.

Check out some online calculators such as this so that you can see a comparison http://www.mortgagecalculator.org/calculators/should-i-refinance.php

Also check out the Amortization calculators as well so that you can see the net effect of a payment over time. Most people are only concerned with the amount of money they pay per month and are not thinking of the overall or long term impact of those payments to their underlying principal. Eventually you will want to sell or refinance or just get the mortgage paid off. There are significant savings one could achieve by doing little things. For example if the lender in question offer a bi-weekly payment take it. You will be making an extra payment per year but there are significant interest savings vs the monthly payment. Also paying a little bit extra each month goes a long way. A $100 per month extra payment could easily take 4-5 years off your mortgage (depending on rate and term of course).

Robert_Casotto said:

can get a 2.5 on a 15 yr for conforming. unfortunately, high cost Essex County (NJ) is not considered high cost enough for conforming loan purposes.

Doesn't conforming just mean that it is below the dollar threshold for a jumbo loan? Doesn't have anything to with location...

Fannie and Freddie vary the conforming loan limits in certain high cost counties. actually though, I think the conforming limit is higher in Essex NJ. time to go back my broker.

Robert_Casotto said:

Fannie and Freddie vary the conforming loan limits in certain high cost counties. actually though, I think the conforming limit is higher in Essex NJ. time to go back my broker.

That makes sense.

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Anyone checking to see what they are? I've found 3.25 on a 25 or 30 year fixed (conforming). Wondering what others have found.