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Refi Temptation

November 8th, 2010 at 05:29 am

We refinanced 2 years ago (to 4.875%), because we were not sure we would have enough equity to refi later. Plus, not a fan of ignoring rock bottom rates for the "possibility" they will drop further.

I talked to our mortgage broker recently and he said he was keeping an eye out for me. I was kind of rolling my eyes, thinking, "yeah right." Like it will really be worth it to refi. I thought he may turn into a pushy salesman.

But, now I am starting to appreciate it. Because, I haven't heard anything from him. (So he isn't being overly pushy, obviously).

Over the weekend we got an offer for 3.99% (that a 30 year loan!) from Quicken.

I ran the numbers out of curiosity. Even if we borrowed the closing costs, we are looking at a monthly payment of $999. O.M.G. (I was freaking out during our last refi to $1100/month, because that was cheaper than renting a studio condo when I Was 18 - admittedly a more expensive area. But, you know, to me that just seems insanely cheap for a mortgage, considering what we looked at a decade ago as far as rent or condo ownership).

I told dh, "Rates will NEVER be lower." He said, "I've heard that before." (Yes - he has - twice already).

I will pass this one up. I know that we would have to pay a higher rate to opt out of escrow, and I don't want to deal with an online company like this. The reviews are mixed.

We went with a broker last round, and it was the most pleasant refi experience we have ever had (compared to some horrendous ones).

But, I will probably e-mail our broker guy and ask him if he can get us 3.99%. I presume no (not in a low cost way) since he hasn't called us. But, doesn't hurt to put the bug in his ear.

Selling point? Initially, we'd pay off the loan a little faster. ($300/month to principal versus current $285?). This time I would just keep paying the old payments, so we'd be paying down $400/month to start. The breakeven seems lightning fast. That's the final selling point for me. Guess that happens when you get so low in the interest rate.

I think it's almost impossible to pass up rates below 4%. It's insane.

I know I could more easily get a rate that low with a 15-year mortgage, but we just aren't there. In a couple of years? Maybe. But with just my income, now? Sticking with the 30 years. OF course, last time we had a 15-year loan, it was in the realm of 7%. !!! (2000 or 2001). You can see why a 30-year at 3.99% might be more appealing. Low rates AND a longer term, both? Sweet.

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I think people's reactions to our constant refinancing are kind of funny. PArticularly in the area we live in. People equate "refi" with "cash out."

I personally equate "refi" with "making it easier to pay off our home SOONER!!!!!" We generally don't even borrow the closing costs. Only considering the last couple of times, and paying points, because the rates were so lucrative.

IF we had just waited, would have been even better, but I didn't have my crystal ball. I don't regret any refis we have ever done.

This refi would put us well on track to pay off in 25 years. Which may be 3 years behind original purchase pay off, but we would be paying $500/month less than original loan payments (for decades).

I won't hold my breath, but am looking into it.

1 Responses to “Refi Temptation”

  1. creditcardfree Says:

    I so want to refinance. The odds of us moving in the next 12 months are pretty high. I hope then we can lock in a nice rate. If we hear we aren't moving...then I'm definitely on the refinance wagon!



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