Home mortgage companies...

[TN94z]

Who do you guys use for your mortgage? I have been with Wells Fargo since day 1, but have gotten some pretty descent offers in the mail. I usually just trash them because I am always skeptical when companies seek me out for that kind of stuff, but maybe I should look into more of these offers. Some offer a full point under my current percentage.

[DaveP043]

There's a rule of thumb somewhere about how much of a rate improvement you need to offset the closing costs involved in a refinance.  I'm sure someone out there could tell you, but I'm not sure that a 1% difference would make refinancing beneficial.  Our mortgage is with Suntrust, for two reasons.  First, their rates were competitive when we refinanced.  Second, the broker is a friend of ours, which made doing the deal pretty dang easy.

[TN94z]

17 minutes ago, DaveP043 said:

There's a rule of thumb somewhere about how much of a rate improvement you need to offset the closing costs involved in a refinance.  I'm sure someone out there could tell you, but I'm not sure that a 1% difference would make refinancing beneficial.  Our mortgage is with Suntrust, for two reasons.  First, their rates were competitive when we refinanced.  Second, the broker is a friend of ours, which made doing the deal pretty dang easy.

1% was always the least I had heard for it to be beneficial. And I cannot remember the exact offers but I know they were at least that 1%.

Are there any benefits to staying loyal to a certain company?

[DaveP043]

Just now, TN94z said:

Are there any benefits to staying loyal to a certain company?

I kind of doubt it, they don't offer discounts to long time customers as far as I know.  I think its all a matter of getting the best total deal that you can.  Remember that the closing costs, points, appraisal fees, PMI requirements, etc, can all add up, so its more than just the rate.

[TN94z]

9 minutes ago, DaveP043 said:

I kind of doubt it, they don't offer discounts to long time customers as far as I know.  I think its all a matter of getting the best total deal that you can.  Remember that the closing costs, points, appraisal fees, PMI requirements, etc, can all add up, so its more than just the rate.

Agreed and I know all of that. I would do the math to make sure it was worth the deal. That's kind of what I meant by "look into them."  I just wonder how stable some of the companies are that have sent me the offers. For instance, Quicken Loans sent me a really good offer but I have never heard of anyone in my area that used them.

Edited May 8, 2017 by TN94z

[Hategolf]

I do not agree with rules of thumbs for finance related matters. 

You need to use a mortgage refinance calculator available online. Make sure to take in to consideration the cost of refi, the rate of course and any heloc and its rate if applies. 

The calculation should show a break even time frame. How much would I have paid in interest + refi cost and how long would take my current mortgage to catch up? The two lines should cross at some time in the future..

What if the "SAVINGS "under the new available interest rate mortgage plus the cost of refi kicks in after 20yrs? are you ok with that? would you still live there? because if you sell before the break even you are actually loosing money.

Remember lowering the interest is not a benefit if the cost of getting that rate ruins the deal. Right now you have no other cost other than the current rate.

And lastly, when you refi you might be restarting the clock..if you are 5yrs in to a 30yrs...would you want to go in to a new 30yrs?, even if the new interest is lower that might not work...after all is set and done you might have not saved anything.

What carrier?  I don't think it really matters, but gov. owned mortgages as you might already know can get you qualified for some relief programs in the future...may be. 

BofA is my lender, I would not hesitate to move to another lender if I find a lower TOTAL cost for my mortgage. 

[TN94z]

We aren't in any kind of bind or anything like that. We actually only have 8-9 years left on the mortgage and I would not refi for any longer. It would have to be a deal that would save me money while still keeping the current time frame for payoff. I just never really give these offers a second thought before trashing them and it just hit me that maybe I should look at them more closely.

[Wanzo]

1 hour ago, TN94z said:

1% was always the least I had heard for it to be beneficial.

I work in the mortgage industry.  My two cents on if it's worth your time, it's very scenario specific.  I.E., your current balance along with the other items you and others have already discussed above.  It sounds like you have a good handle on how to figure out if it's a good deal.  I would encourage you to seriously consider moving forward if you will save a percent for 8-9 years it's likely worth your time.  Companies like Quicken might not have the local presence of other large banks, but they are obviously totally legit.  Although I would say that they don't normally have the lowest rate.  If you have good credit, debt to income, etc., and only 8-9 years left, you will probably get a good deal with a local bank or credit union.  Good luck,

[dennyjones]

What rate are you looking at?   The best rate around here is about 4 1/8%.   

[Ernest Jones]

24 minutes ago, dennyjones said:

What rate are you looking at?   The best rate around here is about 4 1/8%.   

I'm paying 2.25 variable. 

[TN94z]

26 minutes ago, dennyjones said:

What rate are you looking at?   The best rate around here is about 4 1/8%.   

I can't remember the offers now but we have 4 now and I'm thinking one of the offers was like 3-3.25 maybe

[upndown21]

I always look at it from two points of view: cash flow on a monthly basis and long term costs. If you are diligent at growing your asset base (saving/investing) only the first matters as money is cheap and as long as mortgage interest is tax deductible growing your saved cash flow will outpace the long term costs since money is so cheap.

Find a good independent financial advisor (without conflicts to the transaction) to help guide you through it if you do not feel confident making the best decision for yourself. 

[jkelley9]

Quicken is well rated. We've bought two homes in the last 5 years.We went with a small guy and then with Wells Fargo. FYI getting a mortgage through a reputable, large company has it's merits. Firstly, a lot of time they hold the loan for a lot longer. The smaller guys typically sell to other guys. We were unlucky in that our first mortgage got sold to some small Texas bank. Literally couldn't even set up an online auto-pay. That was incredibly frustrating, HAVING to write a check every month... and this was freaking 2013! 

The 2nd time when going with Wells Fargo I specifically asked and they said that Wells guarantees that they will service the loan for the life of the loan. That means I see the principle, balance, interest paid, and get all my tax info through Wells even if they sell the loan to someone else (who will collect the interest and be on the hook for the loan if we defaulted). 

So that's something to consider as well.

Everything else I can think of has already been said by others. It's pretty straightforward. Mostly (for us) it mattered what cash we could have on hand in the short run as well as understanding that we're on the "rise." Our combined income went from X, to 1.10X, to 1.33X, to 1.42X in 5 years. And I'm crossing my fingers on a promotion I've applied for to push us to ~ 1.66X. We're investing in our future by working hard and will likely move one more time (to another location), or at least another house in the near future, so plopping down a lot of cash to reduce the long term interest paid isn't in our best interest right now. I'd rather be able to work hard, pay for additional education (MBA), and have a large nest egg to reduce our stress. Focus on us, and growing. We'll start fighting the home interest later. We also have no other debts, which is a big deal.

Refinancing CAN be a great option, but what I don't recommend is refinancing to "free up monthly budget money." What I recommend is refinancing (if increasing the term of course) to drop your monthly payment only if you have strong plans to grow the balance of that saved money. Like if you weren't matching a 401k and can't do it with your expenses now then I would absolutely recommend refinancing and putting that money in the 401k if matched. Don't just use it to buy a new boat or car or something lol.