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Refinancing does not necessarily cost you anything, at least monetarily. The lender can provide a credit to you to cover closing fees (which may or may not lead to a higher rate), AND you can lower your rate relative to your current rate. There is still a significant cost in time and effort, even if things go smoothly, that you have to consider.
Refinancing cost money.. period. No one works for free.
One can offset the cost in some sort of credit or by having a lower interests rate. Refinancing cost nothing only if you were to refinance and pay off the new balance immediately and it is no more than if you would have pay off the mortgage entirely without refinancing. There are cases when the credit may cover the expense of refinancing but the bottom line is refinancing cost money.
OK. Yes, the new mortgage would of course costs you money, just like your current mortgage costs you. However back in the real world, the 'cost' is any one time expenses for the new mortgage and the 'benefit' is saving relative to the mortgage you are refinancing. My point was that you can get a zero closing cost refinance, in which case there is no 'cost' to offset with 'benefits', with the exception of your time and effort to go through the process.
Quote:
Originally Posted by sj08054
Refinancing cost money.. period. No one works for free.
One can offset the cost in some sort of credit or by having a lower interests rate. Refinancing cost nothing only if you were to refinance and pay off the new balance immediately and it is no more than if you would have pay off the mortgage entirely without refinancing. There are cases when the credit may cover the expense of refinancing but the bottom line is refinancing cost money.
Quotes do not take into consideration of prepaid interest, escrow, recording fees. Your quote likely covers origination fee, title, appraisal. Thats if you use their preferred title company. You could find a cheaper title company that could reduce costs, but not likely more than a few hundred bucks.
So expect more money you need at closing on prepaids and escrow. Lender credit you are receiving is similiar to what they offered me if I took 3.375% for 30 fixed.
Im currently in the process of a refi with Sebonic Financial through Zillow Marketplace. We plan to sign closing docs this coming Wed, meaning we will be closing in 20 days total. Ive been impressed with them and their process/communication so far.
Sounds like a good deal to me, I'd go through with it. Just make sure they are not just rolling extra fees into your principal. Taken at face value, sounds like a good deal.
So i spoke to them again today and they assured me that there were no additional fees that would be rolled into the principal. In fact, here's the itemized list of closing costs they gave me:
Looks like this really would only cost me $250 and the only other cash i would need at closing is any unpaid interest and money to fund the new escrow amount which could be around $4000-$5000. It seems like that would be a wash though as I wouldn't have a May or June payment.
Thanks for all the advice. I think I'm going to move forward with this re-fi, keeping in mind all the things you guys mentioned.
So i spoke to them again today and they assured me that there were no additional fees that would be rolled into the principal. In fact, here's the itemized list of closing costs they gave me:
Looks like this really would only cost me $250 and the only other cash i would need at closing is any unpaid interest and money to fund the new escrow amount which could be around $4000-$5000. It seems like that would be a wash though as I wouldn't have a May or June payment.
Thanks for all the advice. I think I'm going to move forward with this re-fi, keeping in mind all the things you guys mentioned.
Could you PM me a link to where you found this deal? I'd like to look into it!
Not three days after closing, three days after loan documents have been signed. A bank or lender cannot fund the loan until the rescision period is over.
We call the signing of documents "closing" and the day money is disbursed is "funding.". The Note and other Instruments are dated when signed, ergo, date closed. Funding occurs if the borrowers does not change their minds about financing their residence.
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