Re-financing

Hello–I bought my home in Summer 2010.  I am thinking about re-financing.  Anyway I can do this and avoid paying closing costs?  Is there ever a time when it’s “too soon” to re-finance?

sobrooklyn

in Real Estate - General 12 years and 7 months ago

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slopegirl | 12 years and 7 months ago

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as Adam Dahill reminded me when we refinanced with his help, the usual rule of thumb of 1% in rate isn’t always true. The larger your loan value, the more it might make sense to refinance for a smaller percentage savings…. it’s a pain, but you have to run the numbers to see. We are among the throngs of happy customers who have used WCS/Adam Dahill. Even if you are calling others, call him too. He’s amazing.

iranyc | 12 years and 7 months ago

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ask your bank if they offer loan modification. we got a full percent off our rate for an $850 fee and some paperwork.

Queenie | 12 years and 7 months ago

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I purchased my home in early 2009 and my mortgage is with Chase. I was contacted by Chase over the summer with an offer to refinance my 30-year fixed rate mortgage at 1% less than my current rate with no closing costs, no appraisal and to close within 30 days. It seemed too good to be true but after a bit of research I detemined that it was legit. I went through with the refinance and am now saving $300 a month! It was super easy, a lawyer came to my office and everything was signed in less than 30 minutes. There was some criteria I had to meet: length of time owning home, credit score and job… basic stuff. My understanding is that through HARP (Home Affordable Refinance Program), the feds are offering incentives to banks to help homeowners out, which is how the closing costs are avoided. Not sure if other banks are able to offer same deal, but might be worth looking into. In retrospect the only thing I would have done differently is ask for more than a 1% reduction as they seemed very very eager to get me to refinance! When I asked why they were offering this deal, their response was “with rates at all-time lows we don’t want to lose you to another bank.”

scarter | 12 years and 7 months ago

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I don’t think it’s ever too soon if you are saving at least 1% in your rate.  There will always be some admin cost/closing cost associated with refinancing (even if it’s just rate and term no cash out).  I would ask your current lender about a streamline refi, which can be a cheaper option for many. More importantly, compare your monthly savings to the cost of refinancing (for example if you are saving $100/month by refinancing and it costs $2000 in closing, you will need to stay in the house more than 20 months to reap the benefits of refinancing).  If you plan on staying in your home and the numbers work than it’s worth it but if not then don’t go through the trouble.  Good luck!

adam_dahill | 12 years and 7 months ago

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Closing costs will always be paid one way or another. I offer no closing costs for a lot of past clients by increasing the rate slightly and using the extra margin (commission) to pay the costs on their behalf. Say the rate today for your scenario is 3.625% on a 300k coop loan and the closing costs are 3k. Upping that rate by .25% could yield an additional 1pt in premium/commission/credits and that money will be used to pay your costs. You are still paying them, just by paying a little more per month than the lower prevailing rate option. This is a good strategy for people that aren’t sure if they are going to be in the property for an extended period of time but still want to take advantage of low rates or those that just refinancied and want to go even lower. It gets harder for borrowers with small loan amounts because everything is based on percentages. If you had a 100k loan amount you would need to up the rate enough to cover 3pts to cover those same 3k in closing costs.  -Adam Dahill