| Does it pay to move your mortagage? |
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jonny361
Member
Cash: $ 2.65
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Joined: 08 Jan 2006
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| Does it pay to move your mortagage? |
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Hi
Does is really save money to move your mortgage between lenders to get what looks like a better rate when you take in to account the fees and charges involved.
I have been to a few lenders now and it seems you need to be 18 months in to a 2 year deal to see any savings.
What are your thoughts on this?
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Sun Jan 08, 2006 8:35 pm |
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domingo3
New Member
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Joined: 03 Jan 2006
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Yes, it can really pay off to refinance. It depends a lot on how much different the interest rates are.
I'm not sure why you're talking about two year terms. I'd be looking for a 15, 20 or 30 year fixed rate right now.
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Sun Jan 08, 2006 11:27 pm |
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MattL
Senior Member
Cash: $ 46.85
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Joined: 25 Jun 2005
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We refinanced twice in three years. It all depends on the rate and the fees involved. The rates are going up so it may not be worth it now, unless you are willing to reduce from say a 30 year to a 15 year fixed. That would be worthwhile.
Debt Elimination
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Mon Jan 09, 2006 3:30 pm |
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Dus10
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Joined: 30 Dec 2005
Location: Indianapolis
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You just have to get out there and see what the deals are. A better rate will certainly save you some money. But, do the fees add up? A 1% difference in a 30 year mortgage can be a difference of ~$100/mo per $100,000. If you are able to get a better rate with minimal fees (like the $395 flat fee from Ditech.com- does anyone know if this actually is a good company?) then you will see a return on the $395 in 4 months.
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Mon Jan 09, 2006 3:37 pm |
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efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
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It depends upon closing costs and what you mean by "savings". Lower monthly payments do not necessarily mean savings if the length of the loan runs beyond your old loan (getting another 30 yr every couple of years). And if you get your mortgage at a different company, there will be expenses that you may not have refinancing with the same lender.
When I refinanced 3 yrs into a 30, my payments are about $30/month higher, but it is 1% less interest and shaves 7 years of payments (20 yr term), so overall I will save $62k in interest. The application fee was $295, but since it was with the same lender who already had the initial appraisal and other paperwork, they refunded $125, so net cost of the refinance was $170.
But interest rates are rising, so if you refinance now, it may cost you more than taking the money it would cost for closing and using that to pay down principal.
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Tue Jan 10, 2006 4:06 am |
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