Darwin’s Finance, that’s exactly what we did – a NPV of what’s left of our current mortgage if we made an extra payment equal to the good faith estimate of refinance costs, vs. the lifetime cost of the new mortgage as presented, vs. the lifetime cost of the new mortgage if we make the payment we’re making now.

If we make the required payment on the new mortgage, it will be slightly cheaper than if we threw the extra money at our current mortgage, and take 15 years to pay off. If we make our current payment on the new mortgage it will save us a *lot* of money, and be done in 8 years.

My partner’s only 30 so we’ll be completely out of debt before he’s 40 and before our child starts high school. That’s kind of stunning, actually. We’re frugal just because we are, pretty much – we never really looked at the effect on the future until we did all these refi calculations.

30 yr conventional
4.625%
no points
closing fees <3K
Nothing else, no hidden fees. At closing, the GFE was right on.

In addition to the great tips here, I also built a net present value model to compare various options (i.e. might have one option with a higher % rate, but lower fees or option 2 you may be able to pay a point to get .5% lower – how do you assess the best deal without comparing NPV??).

So, not to be a gratuitous “link-dropper”, but for anyone that wants the model I built in excel or the contact on the mortgage broker I used (which by the way, beat the pants off all the banks and mortgage outfits I contacted myself, including existing lender), it’s all in my Mortgage NPV post here:

Hope it works out; hate to see people getting ripped by the fly-by-night outfits or even the big banks, that in spite of taking billions in bailout funds, have shown no propensity for wanting to lend at competitive rates to creditworthy borrowers.

http://www.darwinsfinance.com/.....yday-life/

we have a relative who works at a mortgage company and has an MBA, so he’s always trying to give us financial advice, but I’ve watched him make some bad decisions that undermine his supposed expertise (very high fee mutual funds, misunderstanding the tax implications of some bonds, stuff like that).

He pushed us and pushed us to refi, and we’re doing it now because it’s going to save us a ton of money and speed up our mortgage payoff by about 5 years – not only are rates lower than when we got our mortage, our credit ratings are higher and we’re switching to a 15 year loan.

We contacted 3 banks that had low rates on bankrate.com, and also our credit union. They all came in at about $3000 on the good faith estimate, and most of it looks non-negotiable – title fee (if we switch banks; if we stick with the bank that holds our mortgage they’ll waive it) taxes, etc – the actual refinance fee is actually a small part of the overall good faith estimate.

This relative claims he found a mortgage broker who got him a refi for $300, and I don’t see how that’s even possible unless the broker ate some of the taxes and other fees, which it seems like they don’t have a motivation to do – I suspect this relative just wasn’t paying attention and rolled most of the costs into his mortgage.

Do you think it’s possible there are mortgage brokers out there eating taxes & title fees to drum up business, and I should had looked harder, instead of dealing directly with the banks?