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The difference in cost added to a house between a 15 year and 30 year depending on rates can be more than the house....
You are effectively extending out the mortgage over 2x the length ..you really need to do the math ...many people end up paying as Much as 3x the price of the house with a 30 year
I generally agree, and did refinance my house from 19 years to 15 years in april with no increase in payments. BUT stretching the term back out to 30 years can have its advantages, depends on what you do with the savings in payments . You could invest the difference and get returns at a rate higher than difference in what you're paying, you could now turn the residence into a profitable rental. You could afford to buy a rental, etc. It allows you greater leverage at a reduced interest rate, which has risks and rewards.
Supposedly over 15 million people could refinance, dropping an average of $300/month in their monthly nut.
It's funny, back when I refinanced a month ago at 2.6% something for 15 years, my mortgage broker was beaming at how it was the lowest rate ever. I basically told him that given what the market, economy, government, etc is going to do, it's highly likely the rates will drop even lower with possibly the 30 year hitting what I paid for the 15. Guessing he believes me now, and probably slammed with even more work than when the 30 year was hitting low 3s earlier this year.
The people I feel bad for are the ones that lost their jobs, as most brokers won't touch their loan with a 20 foot pole. So the people most in need of the refinance won't be able to do it. The extra paperwork due to covid is insane.
NRaleigh Mom, I just refinanced my 10-year ARM at 3.125% (with not quite 2 years left at that rate) to a 15-year fixed-rate 2.5% loan with no points (and a whopping $4 increase in my monthly payment even going from a 30 to a 15! ). I qualified for an appraisal waiver due to several factors: 800+ credit score, refinancing with same lender (so 8 years of great history), good employment history, low DTI ratios, LTV rate <60%, moving to a 15-year loan, and simply doing a refi (i.e. no cash back). I asked my lender about the appraisal waiver first thing when I applied (that was on a Friday), got a tentative yes on the waiver on Saturday, and a definite "yes" on the following Monday.
The waiver saved me the $575 appraisal fee, but more than that, I simply didn't want anyone in my house because I was just about to have major surgery and ANY kind of infection would be really, really bad.
Both my husband and I have credit scores over 800, our LTV is around 50%, we have had the same lender for the entire time (14 years) and also had them on our previous home, there will be no cash out, husband has had the same job with great income for over 20 years etc.
I am going to contact our lender to see if an onsite home appraisal/inspection can be waived :-)
We are in the process of refinancing our 30 year VA loan with a 2.5% IR. No points other than the standard IRRRL .5% funding fee.
It's basically free money considering that real inflation in the USA is closer to 5-7% every year rather than the 1-3% the BLS publishes. Besides, you really can't find a better tax shelter than real estate either, other than perhaps maxing out your 401k every year, but that's debatable depending on what you're working with.
And with inflation ramping up now, perhaps in the 8-10% range in the coming years you'd be a fool to not have hard assets. Over 30 years your mortgage becomes less and less, but rent will always go up with the market. At 2.5% the bank is essentially handing you free money, and you'll get to pay it back with Zimbabwe Bux when it's all said and done.
And that, folks, is also why I always advocate just getting the bigger/better house in a great area. What's a few thousand extra spread out over 30 years to get the better house rather than the dumpy 80 year old starter home in a marginal area that's crumbling apart? In the long run the bigger/better house is going to be cheaper. Think about it.
We are in the process of refinancing our 30 year VA loan with a 2.5% IR. No points other than the standard IRRRL .5% funding fee.
".5% funding fee". What's that, $1,000 on a 200K mortgage? Why give away 1000$?
"No points other than standard XXXXXXX" .... More money given away.
Year after year of interest to be paid. More money given away
30 year mortgages did not appeal to me. Especially when I saw the difference between a 15 year payment and a 30 year payment.
So we used a 15 and paid it off. We did the same with rental properties.
It is probably the best thing we ever did. We now live debt free and as far as we can tell, have built a financial fortress that no recession or sickness can ever deplete.
30 year mortgages would have changed all that.
Retired since 2010.
My adjustable rate mortgage seems to be working out for me. It goes up It goes down. Was around 3% for a few years. It peaked at 5.25% for one year, than down to 4%, and if the treasury note it's indexed on stays near where it is now, I expect the next rate adjust will be to 2.75%. We have 141 payments left. Balance is less than half the original loan amount. There's more than that in savings. At some point it's gonna make more sense to pay it off.
Instead of spending money on refi costs, I've made some extra payment on principle. That kept the payment down when the rate went up.
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). I qualified for an appraisal waiver due to several factors: 800+ credit score, refinancing with same lender (so 8 years of great history), good employment history, low DTI ratios, LTV rate <60%, moving to a 15-year loan, and simply doing a refi (i.e. no cash back). I asked my lender about the appraisal waiver first thing when I applied (that was on a Friday), got a tentative yes on the waiver on Saturday, and a definite "yes" on the following Monday.
