Refinance Question (loan, fixed rate, interest, credit) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

izzacg · 10-25-2010, 07:41 AM

Hello. I am a long time reader, first time poster. Here is my situation:

Earlier this year (May 2010), my wife and I purchased a house in Texas using Bank of America as our lender. We were able to secure a 30year fixed interest rate of 5.25% on a $220k loan. The process was actually painless as we have excellent credit, put 20% down, and the house appraised for $20k more than what we paid.

Fast forward six months and interest rates are even lower now. I am now really considering refinancing to a 15year fixed rate of 3.75%. The only reason we didn't do 15years initially was because I was not comfortable with the higher payment.

As of today, the principle amount is $214k. If we refinance, I would give an additional $20k to get the payment down to only $200 more than what we currently pay per month. I did the calculations and we would save approximately $160k in interest alone over the life of the loan. I think this certainly justifies the cost of refinancing. In addition, as of today, we do not anticipate moving for probably another 30 years or so as this house is certainly large enough to accommodate our family and any future growth.

I cannot see any reason why we should not do this. Is there something I am not considering?

VictorBurek · 10-25-2010, 08:59 AM

In today's economy, cash is king. Once you put that money into your home you may not be able to get it back unless you sell. Texas has unique home equity laws that no other states have.

Instead of dropping the $20,000, you could keep that money in your account and use it to make the higher mortgage payment each month. That way if something happens, like loss of job or medical emergency, you have cash on hand.

I agree, you should refinance.

SmartMoney · 10-25-2010, 09:08 PM

Go to another lender......get a quote and an estimate. Take it to BofA to beat the other estimate. If I knew Texas closing costs or regulations, I'd send you an estimate to play off of.......BofA hates losing their portfolio to other lenders and will cut the rate to the bone.....give it a try.

izzacg · 10-26-2010, 07:50 AM

Thanks for the info. I am going to continue looking into what kind of deal I can get. Time to play some ball..!

VictorBurek · 10-26-2010, 09:51 AM

Since i only do loans in Texas, I can give you a good idea of costs. Your total costs, including lender and title fees, should be around $3100. By paying those costs, today you should be able to get a 30 year fixed around 4.25% to 4.375%. This assumes you have a FICO score over 740.

SmartMoney · 10-26-2010, 09:42 PM

Victor,

Can you send him a "worksheet" at say 3.625 for a 15 year, no points??? That's what he needs and BofA will match it........and they never had it. I did 1.5 years "time" at that place. I know how they play.

VictorBurek · 10-27-2010, 06:55 AM

Quote:

Originally Posted by SmartMoney

Victor,

Can you send him a "worksheet" at say 3.625 for a 15 year, no points??? That's what he needs and BofA will match it........and they never had it. I did 1.5 years "time" at that place. I know how they play.

I sure can, OP private message me your email address and i can provide you with worksheet that itemizes the costs associated with your refinance.

Sounds like you were in prison.

5stones · 10-29-2010, 03:05 PM

Vicor...
since you do Texas loans...

We are getting to re-fi our existing loan to a 4.5 no closing cost, no points etc... staying with same bank.
We currently have a 30yr fixed at 5.8 AND a home equity loan of about 25k
They called and said I need a "subornination agreement" from my HOA so that the new loan beomes the "first' loan and not a 2nd? so I called and the HOA said they do not do that.
I AM SOOOO confused!