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May 4, 2014 10:56AM
We are retired with a very good retirement income. Our custom 'dream home' was built in 2008. We pay interest only on our home and at our age equity is not our need. We have refied interest only 3 times in the last five years. The rate went from 5.45% to 4.25% to 3.125%. The latest is for 7 years. We paid $2,830, $2,390 and now $1,725 a month. The equity is about 45% and we never take cash on the refi. Having sold new homes for major builders before retirement, I was fortunate to meet and recommend many mortgage brokers. Shop carefully before committing and understand all your options that pertain only to you.
Aug 20, 2013 6:28AM
some people refinance every time their house appreciates so they can take equity out. basically they never really own their house, just renting from the bank forever.
Aug 20, 2013 4:37AM
I didn't have a down side to my refinance. Went from 6.25 interest to 3.625. I added 40 bucks to my payment and now my house will be paid off in 15 years. Saving me 11 years of mortgage payments equaling up too a cool 100k. No down side in that.
Aug 20, 2013 1:17AM
Just remember: All loans are calculated with interest on outstanding balance due, meaning that interest is naturally front-loaded. If you are very early in your mortgage and plan to stay long-term, it MIGHT make sense. But, if you are later in your note or will likely move in a few years, you can only get screwed. Re-fi is in the lender's interest. That is why they like to do it.
Aug 20, 2013 1:16AM

I refinanced 1 year ago dropping from 6.9% to 3.6% with 25 years remaining on my mortgage. I dropped it down to a 15 year loan and the payments only went up around $40-60. I recouped the fees in less than a year and was caught up to where the previous mortgage balance would have been in 12 months. It cut the interest I was paying per year from around $10k to around $5k.


I had to use the HARP program because I bought in 2007 and lost half the value of my house. I'm not too concerned about the value because I plan to live in the house until I retire in 20+ years. It will be paid off by then and who knows what housing values will be then.


I feel refinancing was the best thing I have ever done. I'll be ahead for the next 24 years.

Aug 20, 2013 1:16AM

I have lived in this dump for 15 years, my wife wouldn't sell, I would rather a nice army tent and live in the woods.

But the racketeer lenders kept me at odds. 

I paid 160k 1997 and last week I refinanced $157k @ 2 percent.  I started at 8 percent, racketeers bumped me to 13%, 10%,

8 percent, 6 percent, 4 percent and now I'm at 2 percent. This has been over the 15 year span with values from 196k, 400k,

720k, 298k and now at 305k. Since the economy took a dump , no jobs, and insurance, water, electric, telephone, cable has more than doubled in cost, it has been a juggling act.  Many left their homes, walked away, short sell, foreclosed, sold , but I stayed.

Where could I go, I live on the Gulf of Mexico, dolphins play in my back yard, its green all year round, swim in my Olympic pool,

park my car in a garage, have my office in my home and my house payment is only $640.00 per month

Aug 18, 2013 1:08PM
I agree with Newprez, The appraisel was a joke. Our house appraised $50,000 less now than it did 3 years ago as the appraiser apparently had to use comps in the neighborhood within the last year. $550 down the drain for the appraisal. Then because we decided not to pay the bank the difference and not refinance, so we were told we were not approved for the loan. Our credit is exceptional. Then a bill came in the mail that I apparently did not recall reading stating that we now owe $200 in lawyer fees for drawing up the paperwork. $750 down the drain. This whole process is backwards and is only a money making business for the greedy banks and lawyers associated with them.. Refinancers beware and get all the answers before signing a thing!
Aug 18, 2013 12:08PM
If you plan on moving or not staying in the house that your bank owns, don't refinance its a big trap with the closing costs and all the additional fees.  If you plan on living there the rest of your life well go ahead but I have found it ends up costing you more than you think. Why do you think all these scumbags call you all the time offering a better deal? Goodluck!
Jul 29, 2013 2:47PM
I disagree with the theory of a refinance should be 1.5% points less to be beneficial.  I refinanced in March 2012 to 3.375% 15 year loan.  I refinanced again in November 2012 to 2.625%-15 year loan.  The 0.75% difference will save me approx. $23,000 over the life of my loan (that's minus the refinance fees).  There is no rule of thumb that works for everyone.  Research it based on your own situation.
22 people and not one knows how to make money from there home through refinancing no wonder you loose your homes.
Jul 29, 2013 6:31AM
What is best ?.   I have 3 yrs and 40K  left on orig mortgage at 5 %. I have a Line of credit at another lender for 150K.  Should I combine them into a 15 yr new mortgage at  4 %.  I'm 60 yrs old ???.
Jun 19, 2013 1:51PM
Those crappy ARM loans made housing affordable when rates were at 15% and above.  They also ensue that the bank is accountable because you both are taking risk.   

Fixed Rates loans were jokingly called the "Banker's Secret" because about .09 of every $1.00 for the first 20 years is paid toward your principal.  Typically, people refinance or move every seven years.  if you had an adjust able you would have benefited during the decline in rates for the last 5 years.  

I am guilty because of lack of knowledge in many areas typically because of advice from articles like this or advice from friend, or experts on the internet.

The industry has lost credibility but I read something on the internet...but I don't think 20 years of actually doing the surgery would replace the experience.

They majority of mortgage people who have survived the last 5 years will help you and deserve their compensation for their advice.  There is no "free" loan.
Jun 19, 2013 5:56AM
To this day it amazes me how STUPID people are.  I am a Mortgage Officer that is pretty good at not putting people into loans that don't make sense.  On this slideshow it is stated that refinancing "may not be such a hot idea" if you're not going to drop your interest rate by at least a point and a half.  That me be the case for a 30000 loan but I have found it justifiable at even a half point depending loan amount and terms.  I would comment more but I am too busy closing my refinance clients in less than 30 days!
Jun 15, 2013 4:48AM
You make no sense.  Mortgage deduction begins to phase out if you fall under the alternative minimum tax and for that you have to be at the 28% tax bracket (you making a lot of money) the most you can save is 28% on your deduction and Obama has nothing to do with this.  These are Old tax laws established in 1964  Check you history to find out why mortgage deduction where allow to begin.  You will be surprise to find out this was a give.  You refinance to lower you monthly payment not to make money out of taxes.
Jun 15, 2013 4:35AM
Say your 7 years into a 30 year mortgage on a hundred grand home. Say your payment is $1000 per month. So after 7 years you've got $84,000 paid in to your home. Now lets say you want to refinance but after 7 years and $84,000 dollars the principal on your loan is still $94,000 because the interest payment is up front. Now you have a new 30 year mortgage for $94,000 and start all over from scratch. So essentially you've just paid  $84,000 to pay off $6000 that you will never recover. Refinancing is just another scam to take more of your money.
Jun 15, 2013 3:15AM
Pulling cash out is one of the worst things you can do. Pay off your mortgage and own your home. Then it can't be taken away as long as you pay the taxes.
Jun 15, 2013 3:15AM
Most lenders do NOT require a survey.
Jun 15, 2013 2:19AM
If you desire mortgage insursance do not get it rolled in with your mortgage.. .....have it separate  
Jun 15, 2013 2:16AM
Be careful because depending upon the Loan, especially an Obama created or sponsored loan...YOUR GONNA LOSE A LOT OF MONEY especially if you have been able to get a refund each year based on your Mortgage deduction on your taxes...meaning you lose your Mortgage Deduction.. I just looked into it and here is what I found, The Bank made nearly $4000.00 in fees, the Government got to keep ALL my Mortgage Tax Deduction and I saved $200.00 a month but paid higher taxes on my income which diluted that $200 savings to almost nothing. So basically The Government Got money the Bank got money and I got screwed....typical event with this Administration and all their Plans..We the taxpayers get screwed,,same with Obama care, The Insurance Company Executives, Pharmaceutical Companies and some Hospitals will make money,,,It will cost an average family of 4 upto an extra or additional $20,000.00 a year...There is NO SAVINGS..
Jun 15, 2013 1:47AM
Make sure you can afford the loan...period. ARMs are a bad idea...period. Buy a house for what you need, not what looks good to everyone else. Put as much cash down as you can afford, and don't go crazy remodeling a used home until you can honestly afford it.
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