Anyone refinance there house or buy one at these low interest rates lately?

[CowboyT]

at what point does it become worth it? im at 4.75% which is pretty good...probably not worth upsetting the apple cart right?

So, if you can get....say....3.75% now, that would be 1% savings. For every 100K borrowed, you'll be saving $1,000/yr in interest. So if you have a $200K loan, you save $2000/yr. Therefore, if the refi costs $3000, it would take ~18 months to break even. If you want to figure in taxes, if you're at at 25% tax rate, you get $500 refunded as part of that $2000 extra that you spend on interest, so that would make it a 2 year break even ($1500*2 = refi costs).

Im not "in the business" though, but that's my simple explanation.

 

[Bourn]

So, if you can get....say....3.75% now, that would be 1% savings. For every 100K borrowed, you'll be saving $1,000/yr in interest. So if you have a $200K loan, you save $2000/yr. Therefore, if the refi costs $3000, it would take ~18 months to break even. If you want to figure in taxes, if you're at at 25% tax rate, you get $500 refunded as part of that $2000 extra that you spend on interest, so that would make it a 2 year break even ($1500*2 = refi costs).

Im not "in the business" though, but that's my simple explanation.

You can't calculate interest on a mortgage like that. What you wrote makes sense, but it's a amortized compounded interest loan. There's a formula to calculate it. For example on a 10 year 100,000 loan at 5% you will pay $62,889.50 in interest.

 

[PatsFan1283]

There are tons of refi calcs on the web, bankrate should have a few.

 

[CowboyT]

You can't calculate interest on a mortgage like that. What you wrote makes sense, but it's a amortized compounded interest loan. There's a formula to calculate it. For example on a 10 year 100,000 loan at 5% you will pay $62,889.50 in interest.

Im well aware. On the $200,000 loan example, if you paid off $5000 in principal the first year, your second year's savings would be ~$1950 on 1% deduction in interest. Which is why I used the ~18 months, because it's so close on a 30 year when you pay off so little on the front end, that were talking about a few weeks here.

 

[CowboyT]

And obviously the loan adjusts with every payment, but again, since so little is paid off in the beginning of a 30 year, we're talking about a few days now.

 

[Dante]

Dante, is that a 15 or 30 year loan?

payment down by $300 but does the loan end date extend or get shorter?[/QUOTE

20 yr we had 18.5 yrs left so length didn't change ..originally did 30. So we did add 1.5 yrs

 

[Dante]

I read that 2 points or more in interest drop is worth refinancing ..but I'm not a broker ..Bjorn would know better

 

[NorthernStar]

Paying off your mortgage early is a horrible idea with the current low interest rates. If you think over a long period of time....like 30 years you can invest and make more than your interest rate you will have more money.

 

[NorthernStar]

Also i believe the origination fee is suppose to be tax deductible over the life of the loan. It is in effect a pre paid interest

 

[TheFalls]

we are looking at buying a house right now at the top of the market. with prices a joke...i'll only be putting down 10%

I used to be able to write off the PMI...but is it true if a married couple makes over $110K or so, it's not deductible?

 

[NorthernStar]

we are looking at buying a house right now at the top of the market. with prices a joke...i'll only be putting down 10%

I used to be able to write off the PMI...but is it true if a married couple makes over $110K or so, it's not deductible?

Not sure of where the tax deduction cuts off.

Look at a 25 year mortgage....PMI has a different rate. Also another option is to prepay on PMI which you could accomplish by having seller pay some closing cost and then ineffect get a larger mortgage....thus making the interest tax deductible.

I previously did a ton of mortgages but I dont anymore.

 

[quantumleap]

that was for quantamleep who said he has PMI

Bourn, I just did my taxes last night and found my PMI amount. It's like $30/month so I'm doubting it would be worth all the headache to re-fi. Thanks for the offer anyway.

 

[Bourn]

Bourn, I just did my taxes last night and found my PMI amount. It's like $30/month so I'm doubting it would be worth all the headache to re-fi. Thanks for the offer anyway.

All good quantum

 

[williamfor]

What is the current average mortgage rate on the market?

 

[kennedy007]

I bought mine at 3.75%, which was a good deal. I am not a professional, and I had to read and talk to experts a lot, but now I think I have made the right choice.
My favorite mortgage advisers from Mortgage Advice Essex have helped me a lot since I did not even know what these rates were and what they do. I was an absolute novice, and they explained everything carefully, so now I know.
Also, what is the formula for calculating amortized compounded interest loans? I can’t find it anywhere online. Maybe you know some trustworthy sources?

 

[5o'clockcharlie]

$2,100 in total closing costs is really low. And you're right the origination is a write off. A good piece of advce I always tell people is that if you make just 1 extra mortgage payment to be applied towards principal a year, it will reduce your 30 year term by 8 years. That's your mortgage payment x 96 months. Lot of money.

Another way is to make your payments 2-3 weeks before the due date every month assuming it’s a simple interest mortgage. Will cut 7-8 years off a 30 year mortgage.

 

[Knightrofins]

Another way is to make your payments 2-3 weeks before the due date every month assuming it’s a simple interest mortgage. Will cut 7-8 years off a 30 year mortgage.

So if your mortgage is due on the 20th every month, u can tell the bank to take it out on the 1st and you’ll save a few years off of your mortgage?

interesting

 

[MAGAking1]

I bought mine at 3.75%, which was a good deal. I am not a professional, and I had to read and talk to experts a lot, but now I think I have made the right choice.
My favorite mortgage advisers from Mortgage Advice Essex have helped me a lot since I did not even know what these rates were and what they do. I was an absolute novice, and they explained everything carefully, so now I know.
Also, what is the formula for calculating amortized compounded interest loans? I can’t find it anywhere online. Maybe you know some trustworthy sources?

According to you it is Mortgage Advice Essex....lol

 

[5o'clockcharlie]

So if your mortgage is due on the 20th every month, u can tell the bank to take it out on the 1st and you’ll save a few years off of your mortgage?

interesting

Yes as long as it’s a daily interest. More will go towards the principle and less to the interest.

 

[Willie99]

Nobody refinancing anymore, mortgage brokers are dead in the water