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Old 09-08-2012, 11:06 AM
 
Location: decatur
29 posts, read 46,669 times
Reputation: 39

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With 15 year interest rates so low, I am considering refinancing in a few months. Running some numbers, if I can refinance to a 15 year at 3.1% (0.2% greater than the lowest rates I've seen and much lower than our current 4.375%), we can shave off 14 years off our mortgage for a few thousand down and less than $200 more a month.

About how much can one expect to pay to refinance? Our credit score and income are great but we only have about 9% equity.
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Old 09-08-2012, 11:21 AM
 
482 posts, read 986,576 times
Reputation: 195
There are so many variables that go into that, it's tough to tell exactly. Some banks will give you a deal with less fees, but you may have a higher rate. Mortgage companies may give you a better rate, but more fees. There's also quite a few re-fi options that don't require an appraisal. That can save you around $400.

The biggest fee that you'll usually pay is the origination. Most charge a 1% origination on new loans, but refis can vary. So, a $300K loan would have a $3,000 origination. A $100K home would have a $1000 origination. You could honestly be looking at anywhere from $2000 to $5000 or more depending on the size of your home and particulars of the deal. Also, unless you want to, you won't have to come out of pocket for the cash. They'll just roll it into the mortgage.

One option would be just to pay $200 extra on your current mortgage per month. That amount would go straight to principle and you can really knock years off your mortgage that way. The statistic is that you knock off around 7 years of the mortgage if you make one extra house payment per year directly to principle. Do more, knock off more.
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Old 09-09-2012, 06:46 AM
 
Location: Madison, AL
3,297 posts, read 6,233,008 times
Reputation: 2678
Call a lender, get them to run your numbers and give you a break even timeframe. For some, a refi is not worth it due to the cost and the time they will break even on that.

Also, refi rates do tend to be a tick higher than a purchase rate, just FYI. BUT, we are getting into the slow season where lenders will really start heavily competing for business....cutting rates, origination, etc. They have flexibility to do this sometimes, depending on how they are pricing that day. Don't be afraid to tell them you are lender shopping.

It can't hurt at all to look at the numbers.
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