Too soon to ReFi mortgage?

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Too soon to ReFi mortgage?

Postby deadphish » Wed Jan 23, 2008 4:26 pm

We closed in Nov of 2007 with a 30 yr fixed at 6.25. Seeing the new rate cuts of late we are wondering if it is sensible to refi now. Just wanted to ask other homeowners opinions before talking to a "money salesman".
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Re: Too soon to ReFi mortgage?

Postby the knob » Wed Jan 23, 2008 4:34 pm

deadphish wrote:We closed in Nov of 2007 with a 30 yr fixed at 6.25. Seeing the new rate cuts of late we are wondering if it is sensible to refi now. Just wanted to ask other homeowners opinions before talking to a "money salesman".


What are rates doing? Conventional wisdom is you usually need a point lower to make it worthwhile.

How long are you going to be in the house? Can you squeeze into a 15 or 20 year mortgage? I just refi'd to get rid of the second we had after doing an addition (couldn't squeeze it all onto one for some reason) and got a 12-year, which was basically the term we had left.

Also talk to your bank about a "streamlined" mortgage. My banker mentioned it to me as an option since they already held the note, but there was an extra fee with it based on the company they would have to use that negated any savings. In your case, with a recent appraisal, that may get waived as well as some of the other fees.
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Re: Too soon to ReFi mortgage?

Postby ksbluesfan » Wed Jan 23, 2008 4:39 pm

If you're going to be in that house a long time, it might be worth it if you can lower your rate by a full percentage point. It will take a while to recover the closing costs if you refinance now.
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Re: Too soon to ReFi mortgage?

Postby SIU LAW » Wed Jan 23, 2008 4:47 pm

You should check out one of those subprime mortgages. I hear they are awesome.
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Re: Too soon to ReFi mortgage?

Postby Steve Levy Sucks » Thu Jan 24, 2008 12:35 pm

I doubt very seriously you could actually refi this soon, if you in fact just did it in November. Refinancing is usually based on 80% of your homes value, or the equity you have in it. I doubt very seriously your equity has increased enough in 2 months for you to be able to refinance.
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Re: Too soon to ReFi mortgage?

Postby the knob » Thu Jan 24, 2008 4:42 pm

Steve Levy Sucks wrote:I doubt very seriously you could actually refi this soon, if you in fact just did it in November. Refinancing is usually based on 80% of your homes value, or the equity you have in it. I doubt very seriously your equity has increased enough in 2 months for you to be able to refinance.


You can likely refinance anytime you like, as long your loan doesn't disallow that (check for early prepayment penalties as well). As long as you have the cash for the fees or can roll it into the new mortgage without going over assessed value, it's likely he can do this.
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Re: Too soon to ReFi mortgage?

Postby F Keenan » Thu Jan 24, 2008 5:09 pm

the knob wrote:
Steve Levy Sucks wrote:I doubt very seriously you could actually refi this soon, if you in fact just did it in November. Refinancing is usually based on 80% of your homes value, or the equity you have in it. I doubt very seriously your equity has increased enough in 2 months for you to be able to refinance.


You can likely refinance anytime you like, as long your loan doesn't disallow that (check for early prepayment penalties as well). As long as you have the cash for the fees or can roll it into the new mortgage without going over assessed value, it's likely he can do this.



I'm in the same position, my wife and I closed Dec. 1st of 2007 at 6.25%. We put 20% down, so does that change anything? I was just thinking about this earlier today. I'd rather not (Frank) with it, but if the rate continues to drop I guess I may give it a serious look.
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Re: Too soon to ReFi mortgage?

Postby the knob » Thu Jan 24, 2008 10:37 pm

F Keenan wrote:
the knob wrote:
Steve Levy Sucks wrote:I doubt very seriously you could actually refi this soon, if you in fact just did it in November. Refinancing is usually based on 80% of your homes value, or the equity you have in it. I doubt very seriously your equity has increased enough in 2 months for you to be able to refinance.


You can likely refinance anytime you like, as long your loan doesn't disallow that (check for early prepayment penalties as well). As long as you have the cash for the fees or can roll it into the new mortgage without going over assessed value, it's likely he can do this.



I'm in the same position, my wife and I closed Dec. 1st of 2007 at 6.25%. We put 20% down, so does that change anything? I was just thinking about this earlier today. I'd rather not (Frank) with it, but if the rate continues to drop I guess I may give it a serious look.


The 20% down won't count against you, might even make things better. If you can reuse the previous appraisal, the financial pain probably won't be too bad.

The banker I used had our previous construction loan/mortgage as well and said when rates were low in 2005ish, he had some people refi every couple of months when the rates dipped enough.
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Re: Too soon to ReFi mortgage?

Postby F Keenan » Fri Jan 25, 2008 4:12 am

the knob wrote:
The 20% down won't count against you, might even make things better. If you can reuse the previous appraisal, the financial pain probably won't be too bad.

The banker I used had our previous construction loan/mortgage as well and said when rates were low in 2005ish, he had some people refi every couple of months when the rates dipped enough.


OK, but I left out one thing, it's new construction.
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Re: Too soon to ReFi mortgage?

Postby Steve Levy Sucks » Fri Jan 25, 2008 7:04 am

Most lenders have a 'penalty' if you refinance within the first year. It's not to be mistaken with a 'early pay off' penalty, but it can still be hefty. I financed 15 acres of land through GreenStone last July. I asked her about refinancing the land because the rates have gone down so much. I can do it, but there would be a $3,000 hit. When you figure in the savings from refinancing, it wouldn't be worth it. (this is a short term loan that will be paid off when I sell my house, maybe it would pay off long term).
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Re: Too soon to ReFi mortgage?

Postby marco » Fri Jan 25, 2008 8:23 am

the knob wrote:The 20% down won't count against you, might even make things better. If you can reuse the previous appraisal, the financial pain probably won't be too bad.

The banker I used had our previous construction loan/mortgage as well and said when rates were low in 2005ish, he had some people refi every couple of months when the rates dipped enough.


although true - I would advise against flipping your mortgage loan that many times. Pick a time that's ripe and do it. Plus rates were coming off 8-9% averages from the late 90's during the refi boom, now they're coming off low to mid 6%'s into the mid 5%'s.

Look in your loan package for a Pre-Payment Penalty Addendum to the Note - if you have one, read it. It states the number of months it's in play. If you want to check a second place read the Truth In Lending document. It states that you "may or will not" have a prepayment penalty. If either of those say you may have a prepay and you signed an addendum then you have a prepay for the specified number of months on the addendum. If the TIL says "will not" have a prepayment penalty and you can't find an addendum to save your life then it doesn't matter. The only thing left to do would be to advise your mortgage advisor/loan officer if it is wise to streamline in your specific situation.
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Re: Too soon to ReFi mortgage?

Postby marco » Fri Jan 25, 2008 8:26 am

Steve Levy Sucks wrote:Most lenders have a 'penalty' if you refinance within the first year. It's not to be mistaken with a 'early pay off' penalty, but it can still be hefty. I financed 15 acres of land through GreenStone last July. I asked her about refinancing the land because the rates have gone down so much. I can do it, but there would be a $3,000 hit. When you figure in the savings from refinancing, it wouldn't be worth it. (this is a short term loan that will be paid off when I sell my house, maybe it would pay off long term).


For this type of penalty, the only way to know if your lender practices this is to check with whoever is servicing your loan. I'd start with my loan officer, if he's worth a shit he'll look into it for me, otherwise I might have to talk to the dweebs at the servicing company by calling the phone number on my mortgage statement they send me every month. I would guess those penalties are a lot less than the straight pre-payment penalty put on some loans that can be several thousand dollars in some cases.
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