[quote=HLS]BG,
I’m just going to touch on a couple of points that cause most people to be confused.
The ONLY concerns about a loan should be the interest rate and the cost to get it.
(I don’t want to debate the difference between cost and no cost rates)
With a NO COST rate, who cares what the garbage fees are, they’re all covered.
The confusion arises when one ONLY looks at their new payment. Starting over at 15 or 30 years IS A CHOICE, not an obligation.
Any RESPONSIBLE adult can adjust their monthly payments to pay their loan off in 2, 6.5, 12, 15.7, 18, 23, 25, 27.2 or 30 years AS THEY CHOOSE. There are no prepay penalties any more.
The problem is that most loan advisers don’t understand this themselves so they cant explain it properly.
The ULTIMATE benefit to refinancing (at a fixed rate) is to continue making the same payment one is currently making but at a lower interest rate.
NOBODY has to start over at 15 or 30 years with the lowest payment; that’s just another OPTION to benefit from a refi but not the ultimate.
Without a doubt, there is hundreds of billions of dollars being wasted by people who are paying too much in interest on their mortgages.
Saving just .25% can amount to tens of thousands of dollars in savings.
Saving 1.00% can amount to $200,000 savings.
Of course it depends on loan amount and if people can qualify to refi.
Objections like hits to credit score, employment inquires and payments to out of area ‘lenders’ are quite frankly, ridiculous. Credit scores are meaningless & useless unless you need a mortgage or a car loan….
to be continued,,,[/quote]HLS, I have always been aware that a refi-borrower had a choice as to how many years they wanted their new loan for. I am aware that that all the fixed rate mortgages fully amortize for the amount of years they are taken out for.
I just wonder why someone would repeatedly refi just to shave .125% or .25% off their current interest rate (especially if they didn’t need to take any cash out) and then shortly thereafter retire the loan! I mean, what’s the point? How much did they really save on their mortgage over their entire period of ownership . . . especially if their mortgage was continually or even on some occasions reset back to 30 or 15 years upon successful refi?
I agree about credit scores being “meaningless” unless one needs to borrow. At the present, mine won’t even qualify me for a cup of black coffee :=0
