Mortgages

Has anyone shopped around for a new(refi( mortgage lately? I recently got an offer from my mortgage holder(wells fargo) about re-fi'in my existing loan. What interest me is it would be a new 20 year fixed at %5.15 compared to my current at 24 yrs @%5.65. Difference in monthly payment is negligible.
I was wondering if anyone has clicked on any web ads for low rate loans and if so what experience they had. Or any helpful hints at all concerning doing a re-fi. Avoiding a bunch of crap fees to avoid etc. I've gone through the process before but its been a while ago,and I do remember looking at a whole shitload of fees that seemed overboard. I do know I dont have to pay MIP as I have enough equity so I don't have to have it. Any thing else might I look for?

JOHN

Whats the total with any money down and fees? If it is higher than what your paying then run the figures and see what the payback time is.

I'm not a believer of switching mortgages unless your looking at a percent or more then your actually saving something. However different strokes for different folks.

I had a broker tell me that it's not worth it unless you save at least 1%. Have you considered sticking with your same loan and applying extra money to the principle each month? You would at least save closing costs that way.

It also depends on how long you have been paying on your current mortgage considering mortgages are amortized. If you have been paying for a while most of your payment is probably starting to go to principal and will reset with a refi where most of your payment will go back towards interest. In addition to that you will have the fees you mentioned above. Food for thought.

I'm with Wells Fargo and I did a refi 7 years ago. At that point they dropped my interest rate a little over a point and I went from a 5 year adjustable to a 7 year, (which is how I know it was a 7 yeas ago as my interest rate just dropped for my next 12 payments). There were no fee's of any kind, including no appraisal. And it wasn't that there were fee's that were rolled into the loan, it was just fee free.

Things have changed quite a bit in the last 7 years and I suspect that with the drastic drops in home prices they are more likely to insist on an appraisal, but if you have not yet looked at them you might be surprised to find the fee's are not very high. I looked around and I could have gotten a slightly lower rate, but with the additional fee's it wasn't worthwhile.

I just mention it because if there are a lot of fee's Wells Fargo may be willing to negotiate. You may also be able to get a better rate; a quick check of Google shows these rates being offered:

30-year fixed from 4.250% (4.768 APR)
5/1 ARM from 3.000% (3.065 APR)
15-year fixed from 3.875% (4.060 APR)

I agree with you . When I first bought my house it was 10 % . I refinanced 3 times . From 10% > 8 %> 6%>5% . It was well worth it . Now I am adding more money to principle and saving $4000 in interest over the next 3 years and house will be paid off when I retire.

I did the Wells Fargo one last September. Mine was 4.75 for 20 years. There were absolutely no fee's whatsover. I scrutinized the whole deal waiting for the catch, but one never came. They reduced my monthly payment as well as the term. The entire thing was done from home. Never saw a live person at all. The only thing I was required to pay for was notarizing the final papers. Everything got completed and on time. The beauty of reducing your term is that you can still pay extra when ever you want and you will be reducing it even more. 1 extra payment per year will cut off about 8 years on the term.

I refinanced at the beginning of the year, just before rates went up (and have now come back down slightly). I got 4.375% for a 30 year. I'm paying in the equivalent of 3 extra mortgage payments each year, in order to reduce principal quicker.

bankrate.com is a good site to go to for current rates.

Another factor to consider is your current loan balance. It would make more sense to go for a lower interest rate on a higher amount (say, $400,00) than a modest one (say, $100,000).

I have a Wells Fargo flexible rate mortgage. A couple years ago it was 6.2%. I thought it was high for the market at that time, so I talked to their loan dept. about refinancing. They offered to lower it to 5.2% fixed, but it would involve about $3,000 in fees.

I decided not to accept that offer because I felt the fee was too high for what I was getting. I have an old loan and my balace at that time was only about $80,000. Also, I would lose the favorable amotarization which is part of an old loan.

As it turned out, taking that loan would have been a HUGE mistake, becouse soon after that the FED started seriously lowering the rates, so that now my FLEXIBLE rate has gone down to 4.5% all on its own without any refinancing. If I had refinanced, not only would I have paid $3,000 in fees, but my rate would be 5.2 instead of 4.5.

I noticed one of the posters had refinanced a Wells loan without any fees. I guess that means you need to check with several sources at Wells. It may be that in certain states or certain depatments, etc, you can refinance for free. That could be pretty good. Otherwise, they charge what they call "points". If they say the loan will be "2 points", it means they will charge you 2% of the amount financed as a fee in addition to appraisal, title search, etc and all those rip-off fees that are totally useless for a refinance.

If you claim a hardship (and why not?) there are rates as low as 1% for five years, then readjust to your regular rate. And the 1% is fully amortized. But the trick is that you have had a drop in income, or the bank did something "wrong" with your original loan such as overcharge you.