Mortgage Refinance Complete

Written by nickel - 13 Comments

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
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Comments (scroll down to add your own):

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
Comment by Laura — Feb 15th 2008 @ 9:20 am
If you don’t mind sharing, what company did you use?
Comment by DD — Feb 15th 2008 @ 10:22 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.
Comment by Me — Feb 15th 2008 @ 10:42 am
I’m curious. How does this affect your monthly payments?
Comment by Nicole — Feb 15th 2008 @ 10:48 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.

Comment by nickel — Feb 15th 2008 @ 10:51 am
How much was the refinancing cost, if you won’t mind telling us?
Comment by anna — Feb 15th 2008 @ 10:59 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.

Comment by nickel — Feb 15th 2008 @ 11:07 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.
Comment by kurt — Feb 15th 2008 @ 11:26 am
Nice you saved yourself about $3k just this year alone in interest on that loan. Thats $250 a month. Nice work.
Comment by Ken Mott — Feb 15th 2008 @ 12:06 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?

—-

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!!!
Comment by Ralph — Feb 15th 2008 @ 12:09 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.
Comment by Kurt — Feb 15th 2008 @ 12:20 pm
Rates may fall, yet again. How much remain to bee seen, as the it was mentioned last night on C-Span.

Great job.
Comment by Nick — Feb 15th 2008 @ 9:01 pm
Congrats! That’s a helluva deal for sure. Nice to see positive mortgage stories out there for a change.
Comment by budgetsaresexy — Feb 17th 2008 @ 1:03 pm