Looking to do some refinancing. Both primary residence and SFR rentals. What are the lenders seeing for current rates? FRED says 3.75% but it seems no one can ever get that low. Why is that?

If your referring to Freddie Macs published rate here is why. They bury in the report a discount point, usually around .5-.6%. They also do not disclose APR which includes other closing costs.

They are typically a week late with data. Not always but in my business of offering rates it is by the hour at times. Always daily.

If my memory serves, and that is doubtful nowadays, you invest heavily in RE so DTI might be a challenge.

SteveBott said:

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If my memory serves, and that is doubtful nowadays, you invest heavily in RE so DTI might be a challenge.

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So what rate would you be able to quote right now?

Yes, Im heavily in rentals. I was recently medically retired from A&M. I get a regular check from them but its not much. So Ive been on the move to increase cash flow in my rental portfolio. Sold three houses and paid off three others. Found myself with less than 10 loans for the first time in years so thought I would dig in to the options for moving some of my remaining 15-20 year small bank loans to fixed 30 years. Havent done one in a while but the timing is looking good with current rates. I really have no clue where I'll end up on DTI. If I'm too high, maybe I can do a number of properties simultaneously and underwriting will factor all of the new reduced notes in to the equation? Havent done 2018 tax return yet but it and 2019 are going to look drastically different than 2017.

I can't quote you a rate. I can have a discussion with you about your situation. This is a complicated file I would need a full application and complete loan interview.

Feel free to call. My contact info is in my profile.

4.0% was pretty typical for my clients this summer, but I just had a client get approved for 3.75% on their primary purchase from JSC (local Houston credit union). Like Steve said, nobody can quote you rates without digging in, but yeah, nows a good time to be thinking refi compared to the last several quarters.

I actually just ran generic Texas rate and term pricing and have 3.875 with a 1/10th of a point credit and 3.75 with a 2/10 ths cost.

this was 720 credit, $240K loan, 75% LTV

Contact info is in my profile

Now cashout is a different animal

The loan to value matter, as does the credit of course. 3.75% is doable without buy down in some circumstances for primary home. Non-owner occupied is always going to be higher then primary, but then again that matters on loan to value and credit score as well.

What's a good rule of thumb for rate change to refinance? Currently a year into a 30 year but rates have dropped since we bought last year, so not sure if it's worth it or not, especially given closing costs. I hear all of the time how people refinance w/o closing costs, how do you do that? I know you're paying for it somewhere (higher rate possibly) or are they making money selling the mortgage?

Would love to do a 15 year, but 1 in daycare and another in pre-school for 2 more years would make it harder on us than I'd be comfortable with.

Spoke with the future sister in law (sold us my home last year) about refinancing last night. She used to work in home loans at Capital One for 18 years and now works in Real Estate.

She said some banks won't charge a fee (Wells Fargo being one) to refinance, but the rates are higher. Save you money now vs you could save more 30 years from now. I might look into that even if I end up moving with the fiance getting a promotion soon. Whatever saves me money now...

With that said, I don't know a good rule of thumb. Just a matter of when you want to pull the trigger/your break-even point when doing that.

aTm2004 said:

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What's a good rule of thumb for rate change to refinance? Currently a year into a 30 year but rates have dropped since we bought last year, so not sure if it's worth it or not, especially given closing costs. I hear all of the time how people refinance w/o closing costs, how do you do that? I know you're paying for it somewhere (higher rate possibly) or are they making money selling the mortgage?

Would love to do a 15 year, but 1 in daycare and another in pre-school for 2 more years would make it harder on us than I'd be comfortable with.

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Calculate your payback period--if you plan on owning the home longer than that, its worth it. If not, leave it be. Payback is calculated as cost to refi difivided by your new payment savings.

Example:

Title: $1,500
Points: $2,000
Appraisal: $500
All other: $500
Total: $4,500

Old mortgage payment: $1,500
New mortgage payment: $1,445
Delta: $55

Payback period: $4,500 / $55 = 82 months.

So if you believe you'll be own it longer than 82 months, then you should refi now.

aTm2004 said:

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What's a good rule of thumb for rate change to refinance? Currently a year into a 30 year but rates have dropped since we bought last year, so not sure if it's worth it or not, especially given closing costs. I hear all of the time how people refinance w/o closing costs, how do you do that? I know you're paying for it somewhere (higher rate possibly) or are they making money selling the mortgage?

Would love to do a 15 year, but 1 in daycare and another in pre-school for 2 more years would make it harder on us than I'd be comfortable with.

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Oh, and the last thing I forgot to say...If you had title work done recently (I'm not positive on the exact timing), then you should be able to get a new title policy for a discounted rate. Its significant--something like 35-50% off the standard rate depending on how long ago you refi'd.

Red no offense offered but in 17 years of mortgage I've never recommended a 7 year break even deal. I never will. Waaaay to long of time considering all the changes that can happen in people's lives that can sink the deal.

6-12 months is optimal but up to 24 months maybe if I'm sure through the interview that my client plans to stay in the home for twice that time. I have turned down skinny deals.

As for title the easy formula for just a rate and term refi is:

Loan amount - 100k X .0052 + 890 = preliminary cost.

Then discount on a sliding scale based on recent purchase/ refi

40% - 0-2 years
35% - 3-4 years
And so on to no discount after 6 or 7 years I'd have to check

Cash out deals totally different formula that I'd have to custom quote

None taken. But this is a mathematical exercise, so I gave him (and everyone) the formula to figure out what he should do for himself. It's the same concept as trying to decide if you should buy down rate. In reality, if he has a $300,000 mortgage, assuming he can get 100 bps lower on the refi, this is like a 16 month payback. You do that all day.

Well, we bought this house last year with the intention of living here until our kids are out of college...the youngest is 9 months now.

How do closing costs work? I'm assuming it's rolled in or we can cut a check?

It's around there. We bought about 18 months ago to give you a ballpark of the current rate. Going to a 15 year will drop it a point if I'm looking at APR.

Either or. I can't tell you what to do since I do know the details. But your ownership forecast is is definitely better then most. So the numbers could be tighter and still work.

Closing costs are split between fixed and percentage of the loan amount. So an absolute formula is not possible.

A 30 year is a financial or cash flow play.

15s are an equity play

Different transactions

SteveBott said:

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A 30 year is a financial or cash flow play.

15s are an equity play

Different transactions

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The 15 would be both as it'll be much nicer to have it paid off while 2 are still in HS.

True and I thought of that after I posted. 15s convert to cash flow once its paid off but that pretty far down the road. But having a paid off home when the kids hit college is an ideal situation.

I'm finishing up my third child going through A&M and it ain't cheap. Especially two at a time

aTm2004 said:

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SteveBott said:

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A 30 year is a financial or cash flow play.

15s are an equity play

Different transactions

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The 15 would be both as it'll be much nicer to have it paid off while 2 are still in HS.

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You sir are a rarity. Good for you.

Thanks to those who kept this thread going. I am 4 years into a 30 year mortgage. I finally talked to my mortgage lender about refinancing and will pay a couple hundred more a month to pay off the house in 15 years.

I have a pre-approval for the rest of the year that is a max of 3.75%

JHUAggie said:

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Thanks to those who kept this thread going. I am 4 years into a 30 year mortgage. I finally talked to my mortgage lender about refinancing and will pay a couple hundred more a month to pay off the house in 15 years.

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Would you mind sharing the numbers on this?

Were you in a really high rate initially?

I just sent out 3.375 30 yr fixed with $1200 lender credit.

This was on 10% down 400k purchase, good credit.


Refi @ 80% equity would be 3.5% with a small lender credit.

Currently have 3.5 from navy federal with no points or origination. Close in 2 weeks.

Bo Darville said:

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Currently have 3.5 from navy federal with no points or origination. Close in 2 weeks.

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Same rate at Wells Fargo, and I'm hoping to refi in a couple of years.

I've done 4 refinances, including 2 cash outs. Every time it made sense when the rate was one point lower. The last time the rate wasn't lower at all; I just decided that owning a home was a bad investment, so I pay it off as slowly as I can at the lowest rate I can get. My mortgage payment would drop by less than 40% even if I paid the home off. By the time it's actually paid off, the taxes and insurance will probably be 75% of the payment. Why bother owning it?

Currently 4 years into a 30 at 3.875
Looking to refi to a 15 year if I can get below 3%, ideally if we get down to historic lows 2.65 ish

Approved for 3.6% on 30 year yesterday. Was told to wait and lock in another 30-60 days as we will see a continued drop. Depending on house we find, lender wants us to bump to to 20 or 15 year to save long term/build equity, which is fine by me.

Braxton.Sherrill said:

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I just sent out 3.375 30 yr fixed with $1200 lender credit.

This was on 10% down 400k purchase, good credit.

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If this one is my client I believe you are the front runner of the four quotes they got.

What's best obtainable rate for a $250K mortgage with 20% down and really good credit? 15 year term.

suburban cowboy said:

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What's best obtainable rate for a $250K mortgage with 20% down and really good credit? 15 year term.

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Is this a purchase/refi? Mortgage amount $250k or purchase price is $250k? In Texas?

Texas, purchase, purchase price

Even with rates having a bad start to the week, I pulled a 3.50% on a 15 year fixed today for a client with great credit. No points

suburban cowboy said:

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Texas, purchase, purchase price

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Randolph Brooks Federal Credit Union is offering 3.375 on a 15yr mortgage investment property.
Conventional 15yr 2.625%

https://www.rbfcu.org/rates#MOR-PRI