Mortgage Refinance Appraisal

[basod]

WG I didn't ask for a breakdown of the costs. It was with existing lender I may hit up LT for a comparison and play them against each other
I'm just running the numbers straight up. to move from 4.75 to 2.875%
Example current payment 900(no escrow)+ additional 1000 principle monthly + 3200 onetime principle(refi cost) = ~7k interest paid off in 4yrs(This will likely be sooner)
Refi option - 2800 closing + 385 appraisal (figure 3200)
New payment 770+ 1130 monthly principle(keeps apples to apples) without rolling the refi costs = 3700 interest, paid off within a month of the above scenario.(3700+2800+385=~7k as above)
So I'm paying for an appraisal that won't net me anything down the road... well a couple hundred bucks

 

[woodgeek]

Ok. A special situation. If you are paying off in <4 years that is different. Still, it is hard to understand how a reduction of 2% per year in interest (say 1.5% after taxes) doesn't pay off. If transaction costs are <1%, how are you not net positive in 9 mos?? I

Sorry I am dense.

Oh, if the closing is 1% of the house value, and you are 80% paid off, then the the savings is 2% of the remaining debt, which is much smaller than the 1% of value??

 

[basod]

I just ride under the assumption if your doing the refi and it has cost associated with it(including the appraisal)
Then why not just dump that on principle now and run the numbers side/side.
Thinking more deeply without seeing the refi costs broke down I may be shortchanging myself because my escrow is in the ~2k annually
I'd get any overage refunded after closing so if I assume it's 1% (I have about 80k outstanding) that's 800 so thus the 2800 plus 385 appraisal

Most people look at it like how can I save money by paying over the life of the loan - and if I were to do that I would ~20k
In my case I'd be paying less money monthly if only the 770+1000extra principle, where as it's affordable to pay 900+1000 currently so the extra 130 would have to be applied to the refi monthly payment to weigh the differences and the cost associated with the refi is near equal to the existing loan.

If you have excel there is a sweet mortgage calculator just search templates in the little paper clip helper buddy.

 

[woodgeek]

I always used this site....

http://www.mortgagecalculator.org/

and run a bunch of scenarios. You have to compute your increased tax bill separately using your marginal income tax rate. In most cases a 1% reduction is easy money. And you are 2X that.

Sounds like you need a good estimate for the transaction costs, rather than closing costs. In my experience, the closing costs include 1 mo payment prepaid in addition to escrow.

 

[Beetle-Kill]

As SIERRADMAX had suggested, I went to my mortgage holder today, let them know the rates I'd been quoted, and they beat them. I am pleased.
3.424% APR is what I was after, and no appraisal or out-of-pocket expense. This is on a 30yr. re-fi. Now.....
I was told today, that on a monthly $1000 payment (reg. payment), if you sent in a $500 payment every two weeks, it would halve your interest, because the mortgage holders operate on a 30-day scale. The last $500 payment would be @ the 3.424%, but the first would not be. The advice was casual, so I don't know if this holds water or not. Thoughts?

 

[basod]

As SIERRADMAX had suggested, I went to my mortgage holder today, let them know the rates I'd been quoted, and they beat them. I am pleased.
3.424% APR is what I was after, and no appraisal or out-of-pocket expense. This is on a 30yr. re-fi. Now.....
I was told today, that on a monthly $1000 payment (reg. payment), if you sent in a $500 payment every two weeks, it would halve your interest, because the mortgage holders operate on a 30-day scale. The last $500 payment would be @ the 3.424%, but the first would not be. The advice was casual, so I don't know if this holds water or not. Thoughts?

That's what they call the bi-weekly plan, most lenders will charge you a fee for setting it up.
In reality you're making 13 payments a year (26 half payments). Of course the timing of the payments have positive effect on interest owed as opposed to waiting to make the extra payment at the end of year one

 

[Seasoned Oak]

agree with Highbeam, I have a 28x56 building half finished in a very nice in law sweet and the other half my shop. Appraiser noted add 10,000 for out building, could not even buy the materials for that.
Appraisals really are a joke, as I was told "its not what itis worth, it is what you can sell it for" thats all that matters to them.

THat is absolutely true. Banks have no interest in "owning property" their only interest is in profiting from the interest spread AND covering the value., WHat you can sell it for IS what its worth to the bank.Doesnt matter what its worth to you.

 

[basod]

Heres the calculator I use

It's an older version the newer one available free here http://www.vertex42.com/Calculators/home-mortgage-calculator.html
doesn't have all the selectable macros there are separate calculators for the tax/ARM's etc

 

[Seasoned Oak]

Basod
I tried to download this and the one i get dont look nothing like your screenshot,keeps coming up a spreadsheet format.

I do have a great calculator but its from the 90s and in dos format. It does absolutely everything but i cant use it in win 7 and i cant find a newer one that compares.

 

[basod]

Basod
I tried to download this and the one i get dont look nothing like your screenshot,keeps coming up a spreadsheet format.

I do have a great calculator but its from the 90s and in dos format. It does absolutely everything but i cant use it in win 7 and i cant find a newer one that compares.

I don't know if the issue is the version of excel or not. Enable macros? or visual basic issue? The one shown above is no longer available but it's got almost all the features one could ask for
If you want I can probably email the spreadsheet as an attachment just PM me if interested

 

[OldLumberKid]

Did you talk with your current mortgage holder? Most banks today want to keep your business. I spoke with mine, told them I was shopping around for the best rate to refinance and they immediately returned with a lower rate (competitive) and told me it would only be a one time rate modification fee. No adjustment to my amortization table. Saved me $150/mo. for a $700 fee. No closing costs, no appraisal fee.

If you do refinance. Be prepared for the possibility of banks to fund 80% of the appraised value. Also, those advertised low APR rates are sometimes to get you in the door. If they find one thing wrong or they don't like, the rate is subject to change.

I did that, as I had a bank I am happy with — maybe it costs a little upfront — bit more but no formal appraisal was necessary, and that fee was waived. As for comp prices in my hood, it was pretty hard to tell. Maybe it was a smidge under.

 

[jharkin]

I use this set of online calculators a lot... there are all kinds of tax, investing, etc calculators there as well

http://www.dinkytown.net/mortgage.html
http://www.dinkytown.net/java/MortgageRefinance.html

 

[briansol]

I'm closing on my re-fi on Monday.... it's with the same company that my current mortgage is in.

my house is underwater (130% ltv) so i'm not able to get the best deals around. but i'm going from 7 1/8 to 4 .25% which equates to about 550 a month in savings!
and, i'm taking 3 years off the loan to boot. (was in a 40 yr fixed!)

my actual financed value is going up about 5 grand over what I currently owe, as they are skipping me 1 months payment (june, I just made mays, and I don't owe again until july 1) and there's about 2500 in fees/title search/etc etc. Plus, I need to cover taxes up front (as they are due july 1) but I get the current escrow back in a check form 14-30 days after closing.
there was no appraisal fee, as my house is new enough to not have to have a human come out and look at it. the system just auto approves it.
all they really asked me about was my income, my current cash balances (checking/savings) and that I have a perfect payment record with them.

regarding pmi, I get to keep my old rate, which is significantly lower than a new rate would be (about 100 a month cheaper) due to new laws. the 80% rule will still apply in my case as well.

I recommend everyone call up and at least ask.

 

[Highbeam]

I'm closing on my re-fi on Monday.... it's with the same company that my current mortgage is in.

my house is underwater (130% ltv) so i'm not able to get the best deals around. but i'm going from 7 1/8 to 4 .25% which equates to about 550 a month in savings!
and, i'm taking 3 years off the loan to boot. (was in a 40 yr fixed!)

my actual financed value is going up about 5 grand over what I currently owe, as they are skipping me 1 months payment (june, I just made mays, and I don't owe again until july 1) and there's about 2500 in fees/title search/etc etc. Plus, I need to cover taxes up front (as they are due july 1) but I get the current escrow back in a check form 14-30 days after closing.
there was no appraisal fee, as my house is new enough to not have to have a human come out and look at it. the system just auto approves it.
all they really asked me about was my income, my current cash balances (checking/savings) and that I have a perfect payment record with them.

regarding pmi, I get to keep my old rate, which is significantly lower than a new rate would be (about 100 a month cheaper) due to new laws. the 80% rule will still apply in my case as well.

I recommend everyone call up and at least ask.

Had you refinanced, or gotten the original loan, since May of 2009? That's my problem, not eligible for HARP if the loan was issued after 5/09.

 

[briansol]

Had you refinanced, or gotten the original loan, since May of 2009? That's my problem, not eligible for HARP if the loan was issued after 5/09.

no., my loan is from 2007.

 

[woodgeek]

Is this a HARP program loan?

 

[Highbeam]

I bet it is. Thing is, they don't tell you. Certainly not clearly. That rate of 4.25 is quite high for your one chance at a HARP.

 

[woodgeek]

Still, not a bad savings from 7% on an underwater home.

 

[briansol]

it is harp. its 4.125. its like 140% loan to value. it's the best i'm ever going to do.
I would have been happy with 6 to be honest. 4.125 is way better than I was expecting.

 

[TheMightyMoe]

Just got my appraisal done, lady measured all the rooms, outside, asked if anything was new, 10 minutes maybe?

Going from 5 to 2.75% and from 30 year to 15 year. Currently I pay around 200 principal and 400 interest a month, and soon to be 550ish principal and 200 interests. Bought the place as a fixer-upper, so I did a 30, now it's fixed up, so I will do the 15 to finish her off / avoid PMI based on new value. Didn't have PMI before due to VA Vendee loan.

 

[Cross Cut Saw]

I forgot to send an update, oops...

The appraisal SUCKED, compared my house to the first crap he could find. One had railroad tracks in the backyard (literally 20 feet from the house, we have acres of woods) and another had 2 bedrooms, mine has 5!

Not much I could do about that, anyway I just ended up taking out about 12k less since my loan to value would only allow what I got out.

I still ended up getting enough cash out to pay off most of the credit cards (my wood stove and installation!) and now I'm paying $200/month less than before with a 5/1 30 ARM that is set at 2.625% the first 5 years and then has a max of 7.625%.

I feel pretty good about the whole thing, still cost me under $200 to close so it was worth it.

 

[briansol]

start shopping for your next fixed loan in 2 years before rates go up again. re fi into a 15 fixed.

 

[gzecc]

start shopping for your next fixed loan in 2 years before rates go up again. re fi into a 15 fixed.

At these rates get the 30 yr and pay it off in 15.

 

[briansol]

why would you do that? 15 yr rates are cheaper.

 

[woodgeek]

Or go into a 30, which is less than the inflation rate (after taxes) and invest the difference in a low load index fund! Cha-ching.