Asked by richard  |  Submitted March 10, 2015

I am refinancing, going from a 4.850% to a 4.125%. Is this a good deal?

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  Answers  |  8

March 11, 2015

Depends on the closing cost and what the competitors are offering. If another lender is willing to drop your rate to 3.875% for 0 points and 0 fees. Then its a bad deal. Or if you are paying so much closing cost that it will take years to recoup, it may not be a good deal.

Rule number one. Do not pay any closing cost unless your loan amount is less than 150k.

Rule number two. Do not lock until you shop at least three lenders on the same day.

Rule number three. Check to make sure the lender does not have unresolved complaints about them. If they do not care about complaints from existing clients, the chance they will care about yours is slim.

If you save at least 0.25% for 0 cost with a loan balance over 150k, its worth it.
T

Ted | 03.02.16 @ 05:06

I'm not sure how you devised your "don't pay any costs on loans over 150k since loan costs vary remarkably from state to state. In addition, should a borrower with a 160k loan and lower scores not refinance a 6% mortgage unless someone will pay all his costs? The first rule of thumb for mortgages is that there is no rule of thumb.

L

lydia | 02.21.17 @ 17:38

I don't understand Rule One either. I have never heard of any NO COST refi loan, there is always a cost. I live in California, I am debating on whether to refi from 4.85% to a lower rate. However, I plan to sell my investment home in 2020. What do you think?

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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March 20, 2015

What is Six-Month Libor on interest balance

Bobby in Ohio

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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May 06, 2015

How did refinance go ?

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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May 07, 2015

I have a mortgage balance of $20,000, but at 8.5% interest. I want to get an equity loan to lower the rate and to pay off a 22% credit. Is it a wise choice? Estela in Texas.

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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May 07, 2015

yes

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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November 25, 2015

Yes

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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June 01, 2016

Hi Estela, Based on the additional info you provided 5/7/2015, it sounds like refinancing is likely in your best interests. It is important to remember that Texas has unique state laws governing cash out refinances, however, and you'll definitely want to discuss those with your lender.

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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February 21, 2017

What would the closing costs and loan fees be? What type of loan do you have now? What type of loan is the 4.125%? Are you interested in lowering your payment or shortening the loan term, or both? How much does your payment drop? How much longer do you plan to stay in the home?

$commenter.renderDisplayableName() | 09.26.17 @ 18:39

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