<p>I’m starting to look into refinancing our jumbo mortgage; it’s pretty difficult. Either we’ll be hit with huge closing costs or the APR isn’t much better than our rate of 5.875 %. We aren’t looking to take any cash out. We’re trying to go from a 30-yr fixed to a 15-yr fixed, where the mortgage would be about 65% of the value of our place. I was wondering if anyone has had any recent good luck with specific banks/credit unions etc. or any helpful advice?</p>
<p>We did this in August. We converted our 6.2% fixed 30 year mortgage to a 4.0% fixed 15 year mortgage. In the long run, our refinancing fees were insignificant relative to amount of money we’ll be saving. Gathering the paperwork was a pain in the neck----Home Insurance info, Survey, proof of income (we own a business so it include business financial statements), copies of income tax returns, bank statements, etc.</p>
<p>We decided to go ahead and take some money out of savings so that we could get below the jumbo level ($417K); is that something you might be able to consider? We closed earlier this month on a 15 year at 3.75%! We plan to sell next year and build a smaller place on a lot we own, but we will break even before we list this house in the spring and if it takes a while to sell we’ll come out way ahead. (We took out a home equity loan to buy the lot and then rolled it in with our regular mortgage when we refinanced.)</p>
<p>Have you talked to your current lender? On an earlier refinance our bank offered us a “buy down”, which essentially lowered the rate for a flat fee (something under $1000). Their rates right now are on the high side; I found a new lender at bankrate.com. I was surprised to see a local bank listed, though they said we can expect to have the loan sold. Our credit union rates were really not competitive.</p>
<p>My apologies–I didn’t take into account the Jumbo part (Jumbo Mortgage). We had (still have) a typical mortgage.</p>
<p>1more; unfortunately, we can’t readily pay down our mortgage below jumbo level. We are paying two tuitions instead! The “buy down” option is something I really haven’t heard much about, but will certainly give it a try, although I know that our current lender, Wells Fargo is pretty cantankerous when comes to re-negotiating. I did try Bankrate and only got two internet banks with great rates but terrible terms! Good luck on new smaller house, frankly it sounds like a great way to go. Nysmile; thanks anyway, the “jumbo” is the tricky part!</p>
<p>It sounds like you want to stay put in the house you currently own. I think you need to deal with a reputable local mortgage broker who can be a bit creative and more flexible than big banks. Can you get a first mortgage and a smaller second mortgage (which you can pay off quickly when you are done with tuition payments) to bring your first mortgage into the non-jumbo category?</p>
<p>I have a jumbo interest-only ARM and out of the blue my lender offered a lower interest rate on the remaining interest-only period. The rate will continue to be fixed for 2 additional years into the fully-amortizing period, then will adjust based on its index (LIBOR). This saves me thousands of dollars. When I asked my original mortgage broker why the bank would do this, he said that some lenders are scrambling to keep their stable customers. </p>
<p>I think Wells Fargo has less of an incentive to work with their best customers to improve the terms of their loans because they had fewer toxic loans to begin with.</p>
<p>You might try ING Direct to see if they’ll quote you a good rate.</p>
<p>I understand, jg0339. We were only able to what we did because we are down to one tuition (and the cheaper one at that). The “buy down” deal was with our local bank; we had been doing business with them for years. I hated taking my business elsewhere, but their rates were a full point higher than what we ended up with. (I did ask if there was any chance they could match it.)</p>
<p>Working with a mortgage broker might be the way to go; as we would be candidates for more creative financing such as breaking up the amount into two mortgages. I did try ING Direct, their online forms spat back at me that they don’t have a mortgage solution that would meet our needs!</p>
<p>Maybe I’m crazy ( or maybe we live in a low % mortgage area) but jumbo 15 yr mortgages here are 3.75% right now…80%LTV…am I missing something?</p>
<p>I was going to suggest a mortgage broker as well. If you have any friends who are real estate agents, they may be able to recommend someone.</p>
<p>rodney, I’m so jealous of the jumbo rates in your region. In my area, they are in the 4.5% range. So far today, I’ve talked to our accountant, checked our credit reports & scores and have spoken with one bank for estimates. Running numbers through calculators right now. I’d much rather be having root canal work done (then again, I TRUST my dentist).</p>
<p>I couldn’t find a jumbo rate under 4% where I live, either. It is a pain to get all the paperwork together, but will be worth it when you’re done! We still need to adjust our withholding now that our interest expense has dropped considerably.</p>
<p>When we refinanced, we found it to our advantage to split our house debt into a conventional mortgage plus a HELOC to avoid the high jumbo mortgage rates plus some additional expenses. We chipped away at them, paying a bit extra almost every month. Recently, I used an inheritance to pay off the mortgage and we’re left with just the HELOC. Because of the rate on the mortgage & the terms of the HELOC, it made more sense for us to pay off the mortgage. Of course, we have to hope that our assumption that rates are unlikely to rise significantly for at least three years will prove correct.</p>
<p>What is your motivation to go from a 30yr to 15yr? Cutting interest rate or time to final maturity? As you know, your payment will increase because of the shorter maturity. Do you plan to stay in the house long enough to justify the refi costs? If not, they just send the bank more money every month that will be applied directly to principal. </p>
<p>I’m not sure what area you’re located in, but local savings banks often have the best rates and terms, as they hold the loans in their portfolio and do not resell them.</p>
<p>There are refinance calculators online that can help determine when you will break even on a refinance. </p>
<p>One thing surprised us with this latest refinance (probably about our fifth). Because of the current climate, in order to get the lowest possible rate we were required to escrow our taxes and insurance payments. We decided it was worth it, but it did increase our (new) monthly payment by about a thousand dollars. It is money we have to pay out eventually anyway, but I would have preferred to handle it myself (and the escrow account does not pay interest).</p>
<p>When we got our current mortgage (conventional, 4.875%) in July of 2009, we were required to escrow the taxes and insurance. I thought I’d hate it, but I’ve found I like it a lot… the tax bill comes, and a few days later, I get a notice from the mortgage company that they’ve paid it, early, to get the discount. </p>
<p>The escrow account may not pay interest, but right now my savings account is paying a grand 0.2%, so it makes no difference ;-)</p>
<p>About two months after we got the mortgage, we were offered the option of biweekly payment (26 payments a year) taken directly from our checking account. It reduces the payback from 30 years to 23 years. Another convenience I’ve found I like quite a lot.</p>
<p>Most of our taxes are due at the end of August, so I was able to get the money together in the early summer months when we don’t have tuition payments and our utility bills are much lower. It is true, the interest rates on savings accounts these days are pitiful.</p>
<p>I think the biweekly payments make a lot of sense if you are paid weekly or biweekly. We get paid monthly, so I’d have to pay attention and make sure we could cover the extra payments in the two months they hit our account. We have always prepaid principal as much as possible, but right now I need to pump up our emergency fund, much of which I spent to get down below the jumbo rate amount.</p>
<p>Check out Zillow. It’s like bankrate</p>
<p>At one time we had a bi-weekly and we set the payment to occur the day after we were paid, which was also bi-weekly. Then corporate America changed and we were paid on 15th & 30th, so the bi-weekly became a cash flow PITA. On our last re-fi we scheduled the final payment to coincide w D1s HS graduation, so we could shift that cash flow to tuition.</p>