Why not refinance?

[treehugger]

I bought my house 6 months ago (closed May 3, 2010) and I just completed the REFI (Sheldon’s the man and finished Dec 10 2010).

When I closed in May I went conventional w/10% down and had a rate of 4.875%, plus I had a PMI. We did a bunch of work to the house (we did the bulk of it ourselves grand total to include all the furniture $15,000 spent) during the refi it appraised at $90,000 more than the purchase price and I took a rate of 4.375% (a bit higher than was available, but I got a fantastic credit so it made it worthwhile). My monthly payment has been reduced by over $250/month.

The question is why wouldn’t you do this (obvious reasons such as house won’t appraise or you don’t qualify aside)? It was painful in the moment (apologize to Sheldon for my tantrums he is awesome to tolerate such outbursts) trying to get all the paperwork together, but it was 30 days of my life and now I save. I have several coworkers, friends, and family that bought in the last 2 years. Nobody else wanted to refi. I even had one coworker that bought her house less than a year ago argue with me that it wasn’t worth it and I was going to “lose money in the deal”. My parents listened to me and refi’d out of their ARM (did not use Sheldon and paid more) I called their guy, (just to make sure Sheldon was giving me the best deal) and he told me it was not worth my time to do. He even followed up with an e-mail to my dad thanking him for the referral, but basically saying I was living in a dreamworld.

I still don’t understand why one would not refi if one were able? Can anyone explain?

[Anonymous]

There is a risk that you may have to sell your home for unforeseen reasons before you hit the “break-even” point (where the gain from reduced payments accumulates to cover the costs of the refi.) So there is a chance you would see a net loss on the refi.

But if you are sure you aren’t going to sell for a long time, then it’s pretty much a no-brainier.

Why don’t people do it more? Most common reason is probably laziness. Some may not have the cash to cover costs.

Agree that Sheldon is the man.

[Anonymous]

There is a risk that you may have to sell your home for unforeseen reasons before you hit the “break-even” point (where the gain from reduced payments accumulates to cover the costs of the refi.) So there is a chance you would see a net loss on the refi.

But if you are sure you aren’t going to sell for a long time, then it’s pretty much a no-brainier.

Why don’t people do it more? Most common reason is probably laziness. Some may not have the cash to cover costs.

Agree that Sheldon is the man.

[Anonymous]

There is a risk that you may have to sell your home for unforeseen reasons before you hit the “break-even” point (where the gain from reduced payments accumulates to cover the costs of the refi.) So there is a chance you would see a net loss on the refi.

But if you are sure you aren’t going to sell for a long time, then it’s pretty much a no-brainier.

Why don’t people do it more? Most common reason is probably laziness. Some may not have the cash to cover costs.

Agree that Sheldon is the man.

[Anonymous]

There is a risk that you may have to sell your home for unforeseen reasons before you hit the “break-even” point (where the gain from reduced payments accumulates to cover the costs of the refi.) So there is a chance you would see a net loss on the refi.

But if you are sure you aren’t going to sell for a long time, then it’s pretty much a no-brainier.

Why don’t people do it more? Most common reason is probably laziness. Some may not have the cash to cover costs.

Agree that Sheldon is the man.

[Anonymous]

There is a risk that you may have to sell your home for unforeseen reasons before you hit the “break-even” point (where the gain from reduced payments accumulates to cover the costs of the refi.) So there is a chance you would see a net loss on the refi.

But if you are sure you aren’t going to sell for a long time, then it’s pretty much a no-brainier.

Why don’t people do it more? Most common reason is probably laziness. Some may not have the cash to cover costs.

Agree that Sheldon is the man.

[Katy Perry]

Main issue is Changing from a non-recourse to a recourse loan IMO.

[Katy Perry]

Main issue is Changing from a non-recourse to a recourse loan IMO.

[Katy Perry]

Main issue is Changing from a non-recourse to a recourse loan IMO.

[Katy Perry]

Main issue is Changing from a non-recourse to a recourse loan IMO.

[Katy Perry]

Main issue is Changing from a non-recourse to a recourse loan IMO.

[sdrealtor]

If you only haver one loan as this person does, the recourse issue is irrelevant. All first liens are effectively non-recourse.

[sdrealtor]

If you only haver one loan as this person does, the recourse issue is irrelevant. All first liens are effectively non-recourse.

[sdrealtor]

If you only haver one loan as this person does, the recourse issue is irrelevant. All first liens are effectively non-recourse.

[sdrealtor]

If you only haver one loan as this person does, the recourse issue is irrelevant. All first liens are effectively non-recourse.

[Author]

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