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06-03-2020, 03:35 PM | #2 |
Supporter
Join Date: Jan 2014
Location: Missouri
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If you actually get a full point off, will get approved, and plan on not moving until completely paid off. I say go for it, should save you quite a bit.
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Posts: 5,247
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06-03-2020, 03:37 PM | #3 | |
Sauntering Vaguely Downwards
Join Date: Sep 2005
Location: Columbia, Mo
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Quote:
I mean the math's pretty easy to run really. I don't recall what we saved by flipping our 30 year w/ 25 left on it at 4.1% down to the 15 at the 2.625, but it was six figures. Have us paid off by the time the kids are all 18. Ultimately if you save more than the $3-5K in closing costs (and you definitely will if you're getting a full point over 15 years), then yes, it's worth it. I can't imagine rates will ever get too much lower than that and if they do, it won't be enough for you to care too terribly much (and besides, you could always refi AGAIN at that point if it dropped another 1/2 point or so. Again, the only 'waste' becomes the closing costs). There's just so little risk for a potentially MASSIVE return. |
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Posts: 62,497
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06-03-2020, 03:39 PM | #4 |
Mod Team
Join Date: Sep 2011
Location: Valley of the hot as ****
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Figure out your break even point in terms of years to get back your closing costs/fees. We took about 1% off and our break even was slightly over 5 years. If you plan to stay in the house longer than that, it makes sense.
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Posts: 46,069
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06-03-2020, 03:53 PM | #5 |
Just Lurking
Join Date: Feb 2009
Location: Ozark Mountain Country
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I did a refi right when COVID started. Closing costs I figured would take 4 years to pay off, no big deal. On my refi I took all my savings and applied it right back to principal. I saved $200 a month on the refi, now an additional $200 is going to principal instead of the bank.
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Posts: 2,035
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06-03-2020, 03:59 PM | #6 | |
Most Valuable Villain
Join Date: Dec 2006
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Posts: 92,316
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06-03-2020, 05:18 PM | #7 |
Veteran
Join Date: May 2019
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I had less than 9 years left on my 15 year fixed and even with closing costs would end up saving money with refinancing. But instead I'm going the cash out route and lowering my rate and getting some money to work on the house. With the amount Ive been paying I'll still get it all paid off in a total of 15 years with the lower rate.
I'd say its definitely worth it. Problem is for me I was told there is about a 3 weeks backlog on the 15 year fixed rates in my area. |
Posts: 4,590
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06-03-2020, 05:19 PM | #8 |
He's Mahomie!
Join Date: Aug 2001
Location: Jax, FL
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Rule of thumb is 2 points.
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Posts: 17,387
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06-03-2020, 05:27 PM | #9 |
He's Mahomie!
Join Date: Aug 2001
Location: Jax, FL
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Even on 15 year loan takes 5 years before you catch up on interest. Banks have it figured out.
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Posts: 17,387
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06-03-2020, 07:47 PM | #10 |
Veteran
Join Date: Sep 2000
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15 yr @ 2.6% 1k payment monthly closing 3.4k
10 yr @2.5% 1.4k monthly closing 4.8k 12k interest savings on 10 yr. Cash flow isn't a problem. We over pay now on 1.2k Maha Mike a 2% difference is huge. I understand the costs with refi and a .5% is not worth it. The question is cash flow. What got me was the difference between 15 and 10 yrs. $12,000. Yes, 1.2k deferential in closing, but I use the house for the next 20 yrs it is marginal. Another thought process: Good Lord 2.5%? 15 yrs ago that is what the banks were paying on savings accounts! Almost free money. When we refi at 3 7/8% a few years ago, I said we would never refi again. We live in a strange world. Time to take advantage of it. Last edited by Holladay; 06-03-2020 at 07:58 PM.. |
Posts: 3,746
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06-03-2020, 08:11 PM | #11 |
Arrowhead Trail of Tears
Join Date: Oct 2012
Location: KansasCity
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Yes it's worth doing, you won't be adding much time to the loan
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Posts: 29,305
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06-04-2020, 06:37 AM | #12 | |
Veteran
Join Date: May 2019
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Posts: 4,590
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06-04-2020, 07:02 AM | #13 |
King Shit of **** Mountain
Join Date: Aug 2000
Location: Texarkana, Texas
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When I bought my fist house, “we’ll probably never see rates as low as 10% again”.
Crazy. |
Posts: 49,800
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06-04-2020, 08:47 AM | #14 |
MVP
Join Date: Mar 2019
Location: KC
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Posts: 7,497
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06-04-2020, 09:07 AM | #15 |
Sauntering Vaguely Downwards
Join Date: Sep 2005
Location: Columbia, Mo
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That math just doesn't check out and it may date back to when a 2 point reduction was from 10% and actually feasible.
But if you're sitting there at 4% on a 30 year note, are you really going to try to say it takes a drop to 2% to make it cost effective? No !@#$ing way. Not even close. |
Posts: 62,497
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