Wouldja?

[mmmmmbeeer]

I'm pretty much a complete rookie at this stuff.

 

 

Good credit refi.... 2 pts and 1% origination for a 4.5% interest rate. Wouldja?

[NorthSideSox72]

I'm pretty much a complete rookie at this stuff.

 

 

Good credit refi.... 2 pts and 1% origination for a 4.5% interest rate. Wouldja?

Can't know without more data.

 

What does your current mortgage look like? How much on it, how much equity (%), rate, period, type...

 

2 points is potentially a lot of money to put up front - the more front-loaded you go like that, the longer you need to be willing to stay in the mortgage to make it worthwhile.

 

Is the 4.5% locked completely?

 

How likely are you to move or sell the house, and have to re-do the mortgage again, any time soon?

 

Could be other factors too, like, how much cash you have available, what rates might appear at different equity levels, etc.

 

[CanOfCorn]

I'm sure there are reasons to pay points...but every person I've talked to, mortgage brokers, realtors and friends have all said, never pay points. I have never been offered enough for it to make a difference, but I don't trust (potentially) paying that much up front.

[mmmmmbeeer]

Can't know without more data.

 

What does your current mortgage look like? How much on it, how much equity (%), rate, period, type...

 

2 points is potentially a lot of money to put up front - the more front-loaded you go like that, the longer you need to be willing to stay in the mortgage to make it worthwhile.

 

Is the 4.5% locked completely?

 

How likely are you to move or sell the house, and have to re-do the mortgage again, any time soon?

 

Could be other factors too, like, how much cash you have available, what rates might appear at different equity levels, etc.

 

 

I'm currently a little over 2 years into a 30 year fixed VA loan at 6.5%

 

We plan on staying in this home for several years.

 

The 4.5% isn't locked in yet, but it can be locked in as soon as I give her the go-ahead.

 

We have very little equity in the house, negative equity actually with how short a time we've been there. The market here in the ATL area has taken a hit like most other places. I don't feel that the refi amount, 100% thanks to VA (also will roll in points and closing costs), is well beyond the value of the home (still within the Zillow estimate).

 

I'm stuck going VA because their streamlines don't require appraisals and will finance 100%. Having only been in this house 2 years with dropping values, we'd have to come a TON out of pocket to go with a conventional refi to take advantage of the rates available these days(if only I was a deadbeat mortgage holder, I'd be in better shape).

 

I guess my main question is about the points, if it's worth it. From what I read, points are tax deductible. They'll empty my current escrow account and give me that money directly, as well as a 2 month payment lapse before the new loan kicks in. These 2 things will easily take care of the cost of the 2 points. I'm hesitant because I've heard in the past the same thing, that points are typically a bad thing. Problem is that I'm worried that theory doesn't necessarily hold true when dealing with an opportunity to get a 4.5% fixed rate on a home you plan in staying in for a long time.

[NorthSideSox72]

I'm currently a little over 2 years into a 30 year fixed VA loan at 6.5%

 

We plan on staying in this home for several years.

 

The 4.5% isn't locked in yet, but it can be locked in as soon as I give her the go-ahead.

 

We have very little equity in the house, negative equity actually with how short a time we've been there. The market here in the ATL area has taken a hit like most other places. I don't feel that the refi amount, 100% thanks to VA (also will roll in points and closing costs), is well beyond the value of the home (still within the Zillow estimate).

 

I'm stuck going VA because their streamlines don't require appraisals and will finance 100%. Having only been in this house 2 years with dropping values, we'd have to come a TON out of pocket to go with a conventional refi to take advantage of the rates available these days(if only I was a deadbeat mortgage holder, I'd be in better shape).

 

I guess my main question is about the points, if it's worth it. From what I read, points are tax deductible. They'll empty my current escrow account and give me that money directly, as well as a 2 month payment lapse before the new loan kicks in. These 2 things will easily take care of the cost of the 2 points. I'm hesitant because I've heard in the past the same thing, that points are typically a bad thing. Problem is that I'm worried that theory doesn't necessarily hold true when dealing with an opportunity to get a 4.5% fixed rate on a home you plan in staying in for a long time.

Points are just interest paid up front instead of over time. So do some math - take your points paid for 1 year, divide it over the amount of years (likely minimum) you will be in it, and see what the APR actually blends to. If its less than your current 6.5%, then move to step 2 - spread the closing costs over the same period. If all told, it equates to less than 6.5%, and you feel reasonably confident in your minimum time period in the loan... then I'd say this is a good deal. You'd be saving money from that time end forward (at least, maybe more, based on how far below your total virtual rate is against the 6.5%). Plus you'll have a lower payment as well due to the lower rate, and you gain some money on what you do with the extra cash.

 

One other note - IMO, escrow is a rip-off. Just like paying far more taxes than you need to and getting a big refund. You are really just loaning someone else money at a zero percent interest rate. So unless you are paranoid about missing property tax bills and forgetting to pay them (they are only twice a year), I'd go zero escrow, put the money in a savings account of some kind, and pay prop taxes out of that. You'll even make a little money on the interest. Just make sure you know that money is set aside for the taxes and don't spend it.

 

[Steve9347]

I'm currently a little over 2 years into a 30 year fixed VA loan at 6.5%

 

We plan on staying in this home for several years.

 

The 4.5% isn't locked in yet, but it can be locked in as soon as I give her the go-ahead.

 

We have very little equity in the house, negative equity actually with how short a time we've been there. The market here in the ATL area has taken a hit like most other places. I don't feel that the refi amount, 100% thanks to VA (also will roll in points and closing costs), is well beyond the value of the home (still within the Zillow estimate).

Pretty much in the same boat as you... I considered paying points back when I could get down to a 4.8, so if I were you, I'd probably do it at the 4.5.

[clyons]

You can find some helpful refinancing calculators at places like bankrate.com.

 

http://www.bankrate.com/calculators/mortga...calculator.aspx