Proud owner of new 3.25% mortgage - Page 2

CalMom · ‎04-30-2013

@sgraham30 wrote:
@CalMom wrote:
@sgraham30 wrote:
I refinanced my current mortgage. I signed the papers yesterday, made it in right before the rates increase. The loan will be funded by the mortage company on 12/28/16.

I am the proud owner of a 3.25%, 30 year mortgage. I've been sending $150 extra every month on my current mortgage to go towards principal so it will be paid off a lot faster than 30 years. The new mortgage payment is about $41 less than my current payment, but that's an additional $41 that will be sent every month to be put towards principal. My savings aren't immediate, but they will be sizable over the life of the loan
But how much did it cost for you to refinance your loan? How long will it take for you to make up that difference in the savings of $41 per month in other words, break even?. Also, when you begin a new loan, less money goes towards principal and more towards interest.

If you indeed are saving $41 a month and have paid a sum to refinance, well....I don't have all the iformation to tell you.

Just saving $41 a month isn't usually a worthwhile refinance if you consider the loan fees, closing costs, restarting the 30 year mortgage, etc.

@CalMom, I stated in my original post that I had no closing costs or any type of fees, they were paid by the mortgage company. The new mortgage is with the same company, just at a lower rate. I also stated that I send an extra principal payment every month.

I reread your post but never saw that you paid no refinance fees. Hopefully, these were not tacked onto the principal balance of your loan.

Just curious as to what interest rate you were paying before you refinanced to 3.25% if you want to answer. Thanks.

Maudelyn · ‎09-08-2016

@CalMom wrote:
@Havarti wrote:

Congratulations!

Have you considered biweekly payments? That means you pay half the monthly mortgage payment every other week, adding one whole payment on a year. That can shave off 5 to 7 years worth of payments on a 30 year mortgage if you start with the very first payment.

We are just refinancing a 30 year to a 15 year. We didn’t get as good a rate as you because we owe under $100,000 so the smaller loans get a bigger rate. That has never made sense to me because there is less to lose and more equity, but…no one ever said life makes sense….it just is what it is.
No, smaller loans don't necessarily get higher rates. It has to do with your credit rating and how savvy of a shopper you are.

Just because you pay 1/2 of your mortgage every other week, does not mean your principal is paid down and your loan amount towards principal and interest changes.
You are basically giving the financial institution your money for free. If interest rates go up, it would be better to put it into a CD or other financial equity option.

Going from a 30year to 15 year mortgage will garner you a lower interest rate, again will be based on your credit rating and the savvy of the person looking for the loan.

Normally, interest rates are higher for larger loan amounts as in Jumbo loan contrary to what you mention was the case with your loan.

Plus, the OP could have received a lower rate because her refinance rates were higher and she bought down the price of her interest rate often done with a 30 year loan.

So before you think that you have a higher rate, lower rate, saving X amount of money, think about what it cost you to do this and how long it will take you to break even. Often loans increase because the refinance cost and prepayment interest is added to the loan.

I've refinanced many loans over the years...which isn't necessarily great but if you consider the interest rate that I paid when the house was originally purchased...you would also.

Happy Holidays.

Right. To the contrary, larger loans (sometimes called Jumbo loans) actually carry higher rates.

ETA: Just realized you 've already stated this! Sorry.

sgraham30 · ‎03-14-2010

@CalMom, you're correct, I'm mistaken, I did not indicate that I had no closing costs etc in my original post, that info is in message #4:

The woman that I dealt with said that she might be able to get me a better rate, she had to talk to management. She got back to me a day or 2 later, told me that she got the rate down to 3.25%, with no closing costs to me. I told her to go ahead, get the ball rolling on the refinance.

patbz · ‎03-10-2010

Sometimes I call myself "Queen of Refi" as I always keep myself up to date on rates and refined if appropriate. 4 years ago I refinanced from 7.5 30 yr to 3.00 15. When I set up the payments I automatically added a mthly additional $100 to principal. About two years ago I added an additional $500 monthly to principle. The result is that I have repaid $100,000 against loan. Currently I owe $109,000. One trick that is another way to early pay is to pay your monthly payment and add enough to double that months principal. You need to print out an amortization table for your loan (or your Loan Officer can do this). This method cuts a 30 year loan to 15 years. I got my mortgage through Costco (little known service) and paid no fees at all (after all the bank assumes they will receive the use of your money for whatever term you agreed to).

sgraham30 · ‎03-14-2010

@patbz, the new mortgage is with Carrington Mortgage Services, as is the one that's being refinanced.

meallen616 · ‎01-10-2013

sgraham30,

sgraham30 · ‎03-14-2010

@meallen616, thank you!

libbyannE · ‎10-27-2010

@sgraham30 wrote:
I refinanced my current mortgage. I signed the papers yesterday, made it in right before the rates increase. The loan will be funded by the mortage company on 12/28/16.

I am the proud owner of a 3.25%, 30 year mortgage. I've been sending $150 extra every month on my current mortgage to go towards principal so it will be paid off a lot faster than 30 years. The new mortgage payment is about $41 less than my current payment, but that's an additional $41 that will be sent every month to be put towards principal. My savings aren't immediate, but they will be sizable over the life of the loan

Didn't you ask for a 15-year? For only a little more each month, you pay lots less in interest and pay it off much sooner. When we bought our first house in the 1970s, we were just out of college and they gave us a.30- year loan. Our fault. We didn't know any better. We sold the house after ten years and owed almost as much as we had originally. When we bought our second house, we shopped for and insisted on a 15-year loan, paid every two weeks and made extra payments on the principal we we could and had it paid off in eight years. Worth checking on a shorter-term loan fir yourself.

drizzellla · ‎03-14-2010

Congratulations! That is impressive.

I have to laugh when we got our mortgage we were THRILLED to get 16.50% interest rate. Most banks could not be bothered with us. We had more than 20% down and we were both at our respective jobs for 10+ years. Our Real Estate Agent was able to find a bank that would give us a mortgage. Because after weeks of looking we were unable to get a mortgage on our own.

sgraham30 · ‎03-14-2010

@libbyannE, I just checked an online mortgage calculator. For a 15 year loan, the monthly payment before escrow charges are added is $714, for a 30 year loan the monthly payment before escrow charges are added is $442. The difference between a 15 year & 30 year mortgage is $272 per month, which to me, is not a "little more each month." I've been sending an extra $152.63 per month towards principal. Starting 02/2017, I'll be sending an extra $200 per month to be put towards principal.