Mortgage Refinance Complete
Tip It!This is just a quick note to say that we closed on our mortgage refinance yesterday, and are now the proud new owners of a 15 year, fixed-rate mortgage at 4.875%.
For the sake of comparison, we were 21 months into a 30 year fixed rate mortgage at 6.375%. The original balance on this loan was $175,000 and we had a total of roughly $370,000 in remaining payments (including interest, but ignoring pre-payments). In contrast, the new mortgage (we refinanced a total of $170,000) will cost us roughly $240,000 (including interest, but again ignoring pre-payments). The closing costs were minimal in that we had no lenders fees, just title-related costs.
The bad news (for you guys, not us) is that we came close to nailing the very bottom of the recent valley in mortgage interest rates. We could’ve eaked out another 0.125% or so by waiting a day, but rates spiked the day after that, and haven’t come back down since. As things currently stand, 15 year fixed-rate mortgages are in the neighborhood of 5.625% and 30 year rates are around 6.125%. Thus, you won’t be able to match the sort of deal that we got unless rates fall precipitously.
Published on February 15th, 2008 - 13 Comments
Filed under: Mortgages
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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February 15th, 2008 at 9:20 am
Congrats! We close on a deal with the same terms today.
Going from 5.875% 30 year to 4.875% 15 year.
I just looked at our amortization schedule in my closing documents and the crossover point (more principal than interest in each payment) is less than a year away – gawd that feels good! We weren’t going to hit that for a loooooong time in our 30 year mortgage.
Enjoy your new mortgage!
Laura
February 15th, 2008 at 10:22 am
If you don’t mind sharing, what company did you use?
February 15th, 2008 at 10:42 am
Yes, I would love to hear more details. If you are willing to share. We are considering refinancing ourselves. We are in a 30 year 5.375% and would like to go down to a 20 year if possible.
February 15th, 2008 at 10:48 am
I’m curious. How does this affect your monthly payments?
February 15th, 2008 at 10:51 am
Great question, Nicole. The shorter terms means that out payments increased, but the lower rates kept that to a (relative) minimum. All in all, our payments went up by about $200/month.
February 15th, 2008 at 10:59 am
How much was the refinancing cost, if you won’t mind telling us?
February 15th, 2008 at 11:07 am
I don’t recall the exact numbers, but there were no lender’s or broker’s fees, and we didn’t pay any points. The appraisal cost was also covered by the mortgage broker.
We had about $400 in fees from the settlement attorney, and we also had to pay for the title search and title insurance. There were also a handful of state and county recording fees, which can differ widely based on where you live.
Beyond that, we had to prepay taxes and insurance into escrow, but we’ll be getting the money back out of our old escrow account so that doesn’t really coung.
February 15th, 2008 at 11:26 am
I close on a 15 year 4.25% next week. Even though I was 3 months into my old mortgage. Water under the bridge.
February 15th, 2008 at 12:06 pm
Nice you saved yourself about $3k just this year alone in interest on that loan. Thats $250 a month. Nice work.
February 15th, 2008 at 12:09 pm
“I close on a 15 year 4.25% next week. Even though I was 3 months into my old mortgage. Water under the bridge.”
If you don’t mind me asking, what lender are you using and are you paying points?
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I am jealous of you nickel!! We have the same mortgage you had before and I was looking to refi to a 4.875% 15 yr, but I couldn’t talk my wife into it in time. Now that she’s “on board” with us refinancing, we’ve missed the low rate window. Grrr!!!
February 15th, 2008 at 12:20 pm
About 1 point (I think it saved me ~35-50bps on the rate). The rate is a few bps below what is offered to the public because I work at the lender.
February 15th, 2008 at 9:01 pm
Rates may fall, yet again. How much remain to bee seen, as the it was mentioned last night on C-Span.
Great job.
February 17th, 2008 at 1:03 pm
Congrats! That’s a helluva deal for sure. Nice to see positive mortgage stories out there for a change.