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Closing in New York is more expensive than it was for me in Florida. I'm trying to reduce the costs as much as possible.
Anyway, when I closed here in July, I financed $300,000 at 6.5% fixed for 30 years. Now, with the rates as low as they are, I've reasoned that it is smarter for me to role the current principal plus closing costs into a refinance. It will shave about $250/month off of my payment.
However, what advice can I get about closing in New York that will keep me from getting drilled by a host of lawyers and title company? Are there discount ways of doing this?
You might be able to get a re-issue on the title at least get it done again for a reduced cost. I use to work in the Mortgage Industry, but was on the originator side and my processors generally dealt with the ins and outs of the title companies and lawyers. If anything I would suggest to try to use the same title companies, lawyers you used the last time, since you dealt with them only 6 months ago they might be wiling to work with you more on the fees than using someone different.
I thought the general rule of thumb was that it really wasn't worth the refinance unless you were saving 2 points on the interest rate because of the closing costs etc. Just what I've read...
Anyone have any guess at how low the mortgage interest rates will go with the combined Fed cuts recently? I know they aren't necessarily linked but the likelihood is that should go down some more?
I thought the general rule of thumb was that it really wasn't worth the refinance unless you were saving 2 points on the interest rate because of the closing costs etc. Just what I've read...
Anyone have any guess at how low the mortgage interest rates will go with the combined Fed cuts recently? I know they aren't necessarily linked but the likelihood is that should go down some more?
If your going to be in the home for a while (say 7 years or so) you won't really see the additional closing costs, but you will see the $$ you are saving. Also even though you are paying back a higher loan amount since you are paying a lower interest rate, you might be paying less during the life of the loan. For example he has 29.5 years remaining on his current loan of $300,000 6.5%, he keeps this loan throughout he will pay approx $671,000 over the remaining life of the loan. Lets say he refinances at 5.375% and closing costs bring his loan total up to $315,000, he will repay approx $635,000 during the remaining life of the loan. Not to mention it gives him the opportunity to invest the $$ he saves per month.
Closing costs of $15k on a refinance deal? That seems way high, even for Long Island.
The bottom line is that rules are not absolute. If you're saving $250 per month after refinancing then unless you need to pay money up front you're still ahead $3k per year starting right away. For me, using simple math, it only makes sense.
I thought the general rule of thumb was that it really wasn't worth the refinance unless you were saving 2 points on the interest rate because of the closing costs etc. Just what I've read...
Anyone have any guess at how low the mortgage interest rates will go with the combined Fed cuts recently? I know they aren't necessarily linked but the likelihood is that should go down some more?
Good resource is to go to bankrate.com for a good mortgage calculator with an amortization table. You can see over the life of the loan how much benefit there would be in paying less interest even after rolling in the closing costs. It all depends on how long the homeowner plans to stay in the home. At times like this, the other thing to consider is keeping the same mortgage payment, while dropping the length of the term. Good opportunity right now to drop to a 20 or 15 if you can swing the monthly payment given the lower rate. Just another thought.
If you or someone in your family is in the Military (Active/Reserve/Retired/DOD) you can join Navy Federal Credit Union. Their closing costs for a refi are about half (or less) than most banks and they have NO PMI!!! They are fantastic.
Navyfcu.org
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