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Old 01-18-2013, 11:46 AM
 
2 posts, read 2,545 times
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We are eligible and currently refinancing our loan from US Bank. The current principle is 112,622 5.75% 30 year fixed. The refinance loan is estimated and will be around 116,900 (title cost, etc) 2.95% 15 year fixed. We have to pay $324 for the fees, rest of the additional closing cost are in the loan itself.

We have 20 years left to pay for the house. I was thinking we would be saving interest if we cut our years off by 5 years. Is this worth it in the long run? We are not thinking of moving, not until possibly 10 years. We could have chose a 20 year or 30 year 3.75% with a lower principle cost, but I would rather knock off the interest.

What do you think?
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Old 01-18-2013, 11:53 AM
 
Location: Berkeley, Denver, CO USA
15,282 posts, read 22,925,516 times
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Default A better deal?

Your new loan costs are $4300.
Can you find a better deal?
When I did my mortgage, my credit union ate the costs. All $1600 (it is a small mortgage) for a 3.0% 5 year loan. They will never make a dime on this mortgage as the total interest will be about $1600.

Last edited by davebarnes; 01-18-2013 at 12:56 PM..
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Old 01-18-2013, 12:01 PM
 
2 posts, read 2,545 times
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We haven't looked around. Is it worth looking around to save a a couple thousand dollars? I am comfortable with US Bank and other banks may frown on us, due to bankruptcy 6 years ago. Hard to say...
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Old 01-18-2013, 12:27 PM
 
Location: SF Bay Area
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Here you go: 15-year mortgage or 30-year mortgage?
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Old 01-18-2013, 02:12 PM
 
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I've generally found 20-year loans to be at pretty bad price points, but you'd have to check your specific rates for yourself.
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Old 01-20-2013, 07:37 PM
 
426 posts, read 1,774,760 times
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Quote:
Originally Posted by jlasky View Post
We are eligible and currently refinancing our loan from US Bank. The current principle is 112,622 5.75% 30 year fixed. The refinance loan is estimated and will be around 116,900 (title cost, etc) 2.95% 15 year fixed. We have to pay $324 for the fees, rest of the additional closing cost are in the loan itself.

We have 20 years left to pay for the house. I was thinking we would be saving interest if we cut our years off by 5 years. Is this worth it in the long run? We are not thinking of moving, not until possibly 10 years. We could have chose a 20 year or 30 year 3.75% with a lower principle cost, but I would rather knock off the interest.

What do you think?
I assume your credit to be good.

My calculations are that you can get a 15 yr fixed @ 2.75% with no closing costs . I know a ton of guys who can do that all day. So your loan principal would still be 112.600 .

Can I ask why your bank is charging you $4000 in closing costs? Can you break them down for me?
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Old 01-20-2013, 08:54 PM
 
27,294 posts, read 55,908,613 times
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Every time I've checked US Bank I have found them not to be competitive.

I have a 30 that is adjustable and for the last 7 years it has gone down to 3%

Figure can't go much lower so I decided to go with a 2.75% 15 year and be done with it...

Conventional wisdom will say to lock in the low rate for as long as you can.

My credit union keeps most of the loans it originates and their 30 rate was not competitive...

I won't miss the extra each month paying on the 15 so I went ahead.

The thing with loans is they will promise the sun and the moon when the only real thing that counts is can they deliver the rate and term at the cost promised...

More than a few times I have seen last minute shuffles... so make sure everything is what you expect.

I posted last month about a loan that sounded really great... the problem was they could not deliver in the 30 day rate lock and after wanted 3k additional to make it happen... I passed.
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Old 01-21-2013, 08:55 PM
 
21 posts, read 41,664 times
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Quote:
Originally Posted by thomasdavie View Post
I assume your credit to be good.

My calculations are that you can get a 15 yr fixed @ 2.75% with no closing costs . I know a ton of guys who can do that all day. So your loan principal would still be 112.600 .

Can I ask why your bank is charging you $4000 in closing costs? Can you break them down for me?
I can do this all day. Did he say what his FICO was ?
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Old 01-22-2013, 12:35 PM
 
426 posts, read 1,774,760 times
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I dont think he did. I have a bunch of buddies from my broker days I still hang out with. My cronies can do this at 2.75% assuming a nominal 700 fico.
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Old 01-23-2013, 06:04 PM
 
Location: Wake Forest, NC
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I don't have any lenders who have FICO adjustments on 15 year fixed loans. As long as you have a minimally qualifying score its all the same. Why would anyone be asking about credit score for this scenario?
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