Should I refinance my Home? (insurance, mortgage, refinancing)

[fordlover]

Rates at historic lows, seems like it'd be a good time. But where to find the best deal?

Our situation:
Home purchased in late 09 for 145,000. 30 year mortgage @ 5.125 interest rate.

We currently owe ~100,000 on it, it's worth about what we paid for it on the current market.

We could re-fi to a 15 year probably, which would drop our rate to about 2.9 ish but our payment might go up, which we really prefer not to do.

We could re-fi to another 30 year, and I think the rate would be about 3.5 or so and our payment would go way down. We would certainly pay this loan off way before 30 years (my guess would be about 6 years)

[Lost_In_Translation]

I just refi'd a 160k loan from a 30 year @4.875 down to a 15 year @3.375 with bank paying mos of the closing costs. As the refi was practically free I didn't see any downside. Granted within 3 years I'll have paid back the amount saved in closing through extra interest but I'll probably sell in 3 years so it's worth it.

[HoustonRonnie]

No, let it be.

[testmo]

I was not able to find a reputable bank/broker who offered less than $3,000 in closing costs associated with a 30 or 15 yr refi on $140,000 left on the loan. my credit score is over 750. i told them if they can come down on that they'd have me but apparently they had plenty of other people refinancing. i am waiting because there is no way interest rates are going to get significantly higher at any point this year

im not about to roll the closing costs into my loan amount to pay interest on it. stupid banks. $2,500 - $2,800 in closing was the national average for a good loan when I looked around. they weren't willing to come down that little then they don't care about my business. im not hurting waiting it out

[piyf]

Originally Posted by Lost_In_Translation

I just refi'd a 160k loan from a 30 year @4.875 down to a 15 year @3.375 with bank paying mos of the closing costs. As the refi was practically free I didn't see any downside. Granted within 3 years I'll have paid back the amount saved in closing through extra interest but I'll probably sell in 3 years so it's worth it.

So why did you refinance? If the break even point is when you plan on moving?

[Lost_In_Translation]

Originally Posted by danieloneil01

So why did you refinance? If the break even point is when you plan on moving?

That's break-even between paying closing costs at 2.875 and getting them paid in full at 3.375. I still dropped alot of interest going to a 15 from a 30 year. And 3 years is the outside time period. I might sell earlier.

[fordlover]

Originally Posted by testmo

I was not able to find a reputable bank/broker who offered less than $3,000 in closing costs associated with a 30 or 15 yr refi on $140,000 left on the loan. my credit score is over 750. i told them if they can come down on that they'd have me but apparently they had plenty of other people refinancing. i am waiting because there is no way interest rates are going to get significantly higher at any point this year

im not about to roll the closing costs into my loan amount to pay interest on it. stupid banks. $2,500 - $2,800 in closing was the national average for a good loan when I looked around. they weren't willing to come down that little then they don't care about my business. im not hurting waiting it out

Sounds like good advice. I'm looking at closing costs of 4,000 or so, which seems way high. Might be best to wait a while like you say. I'm thinking since I have more than 20% equity, that we won't be setting up ESCROW and just pay our tax/insurance costs seperately.

[Mr. Krinkle]

Originally Posted by fordlover

I'm thinking since I have more than 20% equity, that we won't be setting up ESCROW and just pay our tax/insurance costs seperately.

That's the way to do it. No escrow or PMI.

[houstonfan]

You need to look at hard numbers to decide if it's worth it to do 15yrs. But my guess is it wouldn't be much more per month. If you think you can "comfortably" pay it off in 6 yrs and plan to do so, then choose the 15yr mortgage and not only do you pay lower interest but you'll also build equity much faster since more of each payment goes to paying off principle, If you have concerns about job stability or want to be more conservative, take the 30yr and when you can, pay extra each month to reduce the principle, and pay off the mortgage as soon as you can. this way, you have a safety net in case you find yourself in financial strain in the future, but as long as things are going well, you can pay down the mortgage faster than scheduled.

[Beto]

If you plan on selling or moving in few years than i would say no.