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Basic Training |
Ok, I just purchased my home using my VA loan. I closed on Nov 27th and have just made my first mortgage payment.
We have already received offers enticing us to refinance our loan with the interest rate reduction program. I wanted to ask your opinion about one in particular. "VA HOMEOWNERS ONLY" call if your rate is higher than 4.75%. No appraisal No Payments until April 1, 2008 No closing costs, or fees, out of pocket (I know they tack these fee's into the refi) Yes, refund escrows Yes, recent refinance or purchase OK Yes, cashout / debt payoff options Says at the toll free number that this is a special program for VA only that is meant to help recent purchasers get a lower interest rate since rates have dropped.... I know this is just a ruse to get us to pay their closing fees and make them money. But, just being curious I called them anyway and the rep said they could probably get my current interest rate dropped from 6.5% 30yr fixed to a 5.75% 30yr fixed, plus I would save a few months Mortgage payment of $1500 per month. So my question is this. Does this sound legit? I'm wondering if it would burn me to do such a refinance so early in my loan and if it would make sense to drop .75% in my interest rate and tack on what would surely be 4-5k in closing costs (just a guess). The benefit would be that I would save a little off my monthly mtg and save about 3K which I could use for a few appliance upgrades I am needing. But, I don't want to do something stupid in the effort to save a few bucks. I can provide the toll free number and name of the mortgage company if you wish. Just tell me how to send it to you. Thanks for any advice you can offer on this. |
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"Has Been 2" Grumpy, Sarcastic, Self-Absorbing, Obnoxious, Intolerable, Pugnacious, Outspoken, Opinionated, Contemptuous, Indifferent, Exacting, Evil, Loner, Lost.... - Missing - *Remains: Not Found... |
I don't see how a .75% difference in the mortgage rate would result in a $1500 difference in your monthly payment. Unless you're planning to spend more than 4-5 years in your home to make up for the closing costs, I'd stay away from that "come on."
"If it sounds too good to be true, it isn't" |
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"Has Been 2" Grumpy, Sarcastic, Self-Absorbing, Obnoxious, Intolerable, Pugnacious, Outspoken, Opinionated, Contemptuous, Indifferent, Exacting, Evil, Loner, Lost.... - Missing - *Remains: Not Found... |
Rates that sound too good to be true are. You would have to pay 2 discount points, plus an additional origination point to get a rate that low. It would take well over a decade to recover the closing costs. |
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Basic Training |
I'm looking at it ... I am locked in at 5.5% with 1.3 points total. The closing costs are normal, not being gouged. We expect to stay in our house for a minimum of 10 yrs. With the $100 per month and the interest saved over 10 years it will save us about $25,000 and the payoff will only be about $2500 higher at the end of 10 years. At 30 years we would save about $75,000.
So, anyway I had him lock it.. I have in writing that there is no penalty should I decide to change my mind before closing. |
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Basic Training |
Please keep us informed on how that goes for you. i would really like to know. Thanks, and good luck
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Basic Training |
We closed on our new loan tonight. We got 5.5% 30 yr fixed with Chase Manhattan Bank. Our previous loan was 6.5 % 30 yr fxd. They charged us .934 % origination points and a .300 % discount fee. The apr came out to be 6.62 %. We will save $140 a month off our mtg and alot of interest over the years. We did finance about 6,000 in closing costs, interest, and escrow into the balance but it should even itself out in about 2-3 yrs and since we plan on staying in the house for at least 10 yrs I am happy with the outcome. Overall the mtg broker I worked with on this was great. Which was kinda scary since he contacted me through the mail.
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Basic Training |
I need to amend a mistake above. The apr on our new loan is 5.62% not 6.62%.
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"Has Been 2" Grumpy, Sarcastic, Self-Absorbing, Obnoxious, Intolerable, Pugnacious, Outspoken, Opinionated, Contemptuous, Indifferent, Exacting, Evil, Loner, Lost.... - Missing - *Remains: Not Found... |
Wow, that's not a small mistake. |
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"Has Been 2" Grumpy, Sarcastic, Self-Absorbing, Obnoxious, Intolerable, Pugnacious, Outspoken, Opinionated, Contemptuous, Indifferent, Exacting, Evil, Loner, Lost.... - Missing - *Remains: Not Found... |
I remember when I purchased my first home and my attorney at the time told me, "This will be one of the most enjoyable experiences you'll ever have." Was he ever wrong! IT SUCKED! Since then though, it's become a lot easier. |
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