Q&A: Is it more work to refinance with another mortgage company than refinancing with your current lender?

Question by marky p: Is it more work to refinance with another mortgage company than refinancing with your current lender?
Three months ago my wife and I bought our first house at a 5.5% rate. The mortgage broker who was a family friend moved on to another company. My boss’s husband owns a separate company and can do us a refi at 5.125% which would save us pretty good money. It seems complicated though like our original closing! Would I save time or money by trying to refi through Bank of America (our current lender)? Any suggestions are helpful, thanks!

Best answer:

Answer by Judy
You are making a mistake.
You do not re-fi unless you can get at least 1% rate reduction.
Some professionals say at least 1.5% reduction.
If you are not paying closing costs upfront – they are hidden in the mortgage.
That means that you will have pre-payment penalties.
If you move in 4 years – penalty.
If you decide to pay down extra payments – penalty.

You will be saving nothing by doing this refi.
In actuality, you will be paying more, much more in the future.

Google refi calculation.
Consider that most people really save by making extra mortgage payments.
Once you live in your home for a year and get settled this is the way to go.
You coud save $ 100,000 easily by just making a few extra payments a year to your principal.

Remember: Closing costs can easily add up to 10,000 dollars. They are added to the loan in most cases.
You are just creating debt for yourself.
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