San Diego Housing Market News and Analysis

flu, why not see if you can get them to up to rate to 3.25 and give you a hefty lender credit in return. Then refinance again in 3 months when rates will likely be around the same range they are today.

Fed Reaffirms Low-Rate Policy: http://online.wsj.com/article/SB10001424...

I'm just refinancing again myself after netting $6k in Feb... http://piggington.com/refinancing_again_...

tb

Well, actually, my loan bal is $384k So I'm just asking them to refinance $389, and will use the 5k to pay the cost so I don't incur anything. Still lower than keeping my current loan. Doing this the APR is about 2.97. My current loan is 3.375

come now, flu. You can't possibly be rationalizing to yourself that it's not you incurring the closing costs when you're just increasing your total debt by $5k...

As we're doing show and tell, I'm locking a refi at $405k, 15-year fixed @ 3.125% with a lender credit of $11k, meaning total net closing cost of -$7k.

FYI #1: I have 30% equity and 740+ credit score.

FYI #2: I've done a lot of shopping for rates and have never found a better offer than I can view instantly online at absolutemortgageco.com.

(disclaimer: I am in no way associated with absolutemortgageco.com, but they just seem to be the price champion for my scenario, plus they have their specific rates & lender credit available online. Their nearest competitor is amerisave.com, who are a bit more expensive. If anyone knows of another comparable online direct lender PLEASE LET ME KNOW!)

tb

Actually, I guess I just don't get it.
It seems like the difference here is you're taking cash out up front, and paying more back (over the life of the loan) with a higher rate, versus if you were to take less cash or no cash up front and pay less in the total loan over 15 years...

hang on.. 1 sec.

To clarify, my tactics are based on a couple personally held expectations:
1. I am highly unlikely to NOT refinance again in the next 5-10 years, let alone 15 years, due to either comparable low rates (and lender credit) making it worthwhile to refinance, or from having to move house. (anecdote: I personally paid points for my first mortgage in 2008 and regetted it soon after when life changes prompted me to relocate.)
2. Rates are not unlikely to "fluctuate but stay low" for the next 1-2+ years.

As has been stated before, these tactics (frequent refinance with lender credit) are especially good in a descending-rates environment. But, I believe they're also pretty good in a environment stated by #2, based on expectation #1.

My tactics aren't for everyone, but they've served me well for the past 4 refis and I'll continue until rates rise to make it no longer worthwhile.

Again, if anyone knows of better online rates than absolutemortgageco.com, PLEASE LET ME KNOW!

tb

never mind.. brain fart.

1.5 pts on $407k is $6,105

[quote=ljinvestor]1.5 pts on $407k is $6,105[/quote

I know. I'm totally out of it now. I didn't get any sleep last night. never mind...

I totally get it.

Why the hell did I think 1pt was .5%. Duh!...Stupid..

Let me think about this.. The only thing I can think of is that essentially it's reseting your loan again to full 15 years, I wonder if the total loan payment having multiple refi'ed makes it worth while. But I do see TB's points (no pun intended).

Thanks for the schooling TB.

TB, dumb question about the rebate from the lender.

Do you end up having to pay income taxes on it at the end of the year (1099 or something similar)?

flu, please consult a tax attorney for all tax questions.

...but i personally don't receive 1099s or anything, so i don't enter it into turbotax.

tb

TB... Looking at absolutemortgage's quotes, how did you manage to get an $11k credit by borrowing $405k @3.125% for 15 years?

Their quote today was better than last week and the week before, but it shows that the are only rebating 1.625 points...

After all the closing costs, the rebate appears to be only $1175.90, and that doesn't include the appraisal cost of $450...

abs

Currently, from their website, I can only see the credit is from the -1.625 point rebate.

*$405k * 1.625% = $6581.25, shown above as "lender's credit"
*The loan costs $2717
*There's $2619+69 in third party fees.
*The appraisal costs $450

So the total rebate from the loan appears to only be $726 after all the costs, with a 45 day lock period.

Did you have to do anything else to get additional credits?

Getting $11k in lenders credit with a $405k loan would have been close to -2.7 points back, which is roughly what 3.375% is currently getting. Has rates swung that much within the past 1-2months?

Thanks for the feedback... Trying to make a decision very soon.

There's a 15 Year FHA loan from absolute too... Is that what you were talking about?

absfha

Thanks for the reference to absolute mortgage

See IM

Flu must have refinanced by now because rates are droping to newer lows :)

http://housingwire.com/news/mortgage-rat...

Yes yes yes... I closed and funded on monday 2.875 (got a lower cost actually).

And rates for me dropped to 2.75 the next day..

yeah yeah yeah...rub it in...

There's always next month...

flu, look at your papers again. You probably have at least a 3-month moratorium from refinancing :=0

flu,

Did you end up going with absolutemortgage? If so, how was your experience with them compared to previous refi's?

I was speaking metaphorically. It won't make sense to refi unless rates drop again for another .50%..And if I do refi, the lender has to pay back the commissions I think...
Not my problem...

Funny, cause I was only with my previous loan for a few months, and back then it was 3.375 and I thought I was already getting a great deal...

My monthly is ridiculously low, at $2660ish/month and my total loan is lower too. I guess I should have done the negative points, but I was already too far in the process and didn't want to cancel. again, maybe next time.
Also, got a 3% heloc setup at the same time in case I need a short term financing for something that comes up too good to pass, and don't want to liquidate elsewhere at the time..

Ended up getting a heloc setup versus doing a cash out refi...Because there's no guarantee I'll need to take the cash out ,and don't want to get stuck paying interest on money that's just sitting there not being put to good use. So my credit line is just going to sit there, no annual/renewal fee until I need to use it (which might be never).

No i didn't use them. It was too late on my loan.. maybe next time. I wish I saw this email before. My lender didn't offer the negative points option.

Comparing same exact loan terms, my lender (an esoteric credit union in L.A.) was cheaper than absolutemortgage after their rebates by about $200-300... Absolute however, offered a 3% negative point loan that after cost that really left you with cash in the pocket. The difference was that with absolute, the appraisal cost isn't included in the total calculation. My lender's cost included the appraisal, and the appraisal fee for my lender was $300. So that's why absolute's 2.875 product at the time came out to be slightly more than my lenders.

My actual cost wasn't $3k, because part of it was prorated interest payments for not closing on a complete month. (my goof)...

I see, that makes sense. We're currently in a 4.375 (30yr fixed) from when we bought last year and current interest rates getting me thinking about refi-ing. Thanks for the info!

Just got a quote today on $400K 20 year at 3.5% no cost. We did refi last year at 3.875 and had gotten $2400 net credit, which was around -1.25pts if you include all closing costs.

That's kind of high...I'm seeing a 30 year at 3.50% with an $800 cost.. You can probably do a 3.55 with no cost. but I haven't looked.

A crisis in Europe might drive rates even lower here.

closer to 60%