<p>you guys do know that you can create your own bi-weekly (which basically creates a situation in which you end up paying one extra payment per year)? you don’t have to do this with a bank; just pay 1/2 your payment every two weeks…gives you 26 payments a year (whereas a normal monthly paid twice/month would give you 24)…voila!! one extra payment a month that goes towards pre-payment of principal.</p>
<p>i think rodney meant ‘one extra payment per YEAR’.</p>
<p>Another strategy is to keep your 30Y loan, but pay it down in a 15Y (or whatever) period. This gives you the flexibility to pay just the required amount if you need to, but to accelerate paying off your existing loan. You just send it extra $$ that goes toward the principal in your regular monthly payment</p>
<p>nj2011mom, we did about the opposite. As soon as S1 graduated from college I immediately started prepaying our mortgage with the money we had been sending to his school every month. As a result, when we refinanced down to fifteen years, the amount we were paying each month stayed about the same. S2 will graduate a couple years before we’ll need a new car so I’ve already earmarked that money when it becomes available.</p>
<p>Great plan, 1moremom! It’s like banking a raise.</p>
<p>ellemenope, My S1 went to the same school as your D1 (and lived in the same freshman dorm :)) so this has made quite a dent in our principal. Now we just have to hope the car holds out long enough for the next phase of my plan to work.</p>
<p>Avoiding work; I like your plan, I’m going to run it through yet another calculator. On the rates & terms of jumbo refinancing, I’ve had some good luck with actually phoning banks and talking to people rather than just checking rates online. Still waiting for a call back from a mortgage broker too. Also, I am requesting “good faith estimates”.</p>
<p>When you get that good faith look for the junk fees they through in such as, binding, or settlement fees. Try working with them over that especially if you are a repeat customer. Those junk fees can add up very quickly and in many cases can range hundreds of dollars.</p>
<p>Make sure that they re-issue your title insurance instead of issuing a new policy. You will need to go into your paperwork to find out the company that originally issued it.</p>
<p>Personally, as others have stated create your own by paying another pmt every yr or doing a bi-weekly if you are only going to go down a 0.5% that would mean it will go down @50 cents on the thousand you borrow. Take the costs that it will cost to re-fi and divide by that savings. This will tell you how many months it will take for you to make up the cost.</p>
<p>Also remember to look into to how much a point costs to buy. Repeat that math problem.</p>
<p>For some they actually have regretted converting to the 15 over just paying 1 extra a yr since the interest will be paid off quickly, they landed up taking it in the gut since they had no deductions a few short yrs later, especially while they were pulling out mutuals to pay for their kids education.</p>
<p>I would talk to a tax accountant prior to re-fi, because you might be taking from Peter to pay Paul.</p>
<p>I would also contact a realtor to give you a CMA. Appraisals will be done on your property, and unless you know for sure what your home is selling for, you might find out that what you thought it was worth is tens of thousands less than it is worth.</p>
<p>Spent an hour on the phone with my bank this morning, and modified our mortgage on our second-and-hopefully-soon-only home in that hour. Whew! that was easier than expected. We had a 5/1 ARM, 30 yr, and didn’t want to have it reset at a time when inflation has come back (it’s bound to, right?). So now it’s a 3.99, 15 year fixed, and I had to fill out zero papers. Cost was 750, which I rolled in (added about 5 a month), and I’m glad to have that taken care of. (haven’t even told H yet, though we had discussed the plan already.) We want it paid off as soon as possible; and we want the principal paid down so when and if we ever sell off the house we’re living in (no mortgage, strictkly as-is condition, value plummeting as we speak), we’ll be able to pay off the other, and be again mortgage-and-debt-free, our goal in life.</p>
<p>That sounds much like the “buy down” we were able to do for an earlier refinance.</p>
<p>Garland- which bank? My Wells Fargo rep has only offered me complete new full refi’s, no good customer, let’s renegotiate and get something good for both of us deal.</p>
<p>at one time biweekly payments had a one time setup fee ($300), and a monthly continuation fee ($5). </p>
<p>is it still prevalent?</p>
<p>Somemom–small regional bank in North Jersey–Investors Savings Bank. I am really lucky to have this choice.</p>
<p>The rule of thumb used to be, 200 basis point difference in rates and the expectation that you will stay in the house for 10 (?) years, inorder to recoup the closing costs. </p>
<p>We are kinda undergoing the reverse scenario: Pension annuity selection, whether to take the proposal or to delay the pension annuity to get a higher payment. After looking at 4 proposals, it appears that we should take the original proposal. The delayed pension although higher $, would take 12 years before we recoup the difference.</p>
<p>My mortgage company (the one whose refinance offer I took a few months ago) just sent another offer today, this time for a 4.5% 30-year fixed jumbo. Maybe this would be useful to the OP:</p>
<p><a href=“https://www.citimortgage.com%5B/url%5D”>https://www.citimortgage.com</a></p>
<p>We refinanced in October with an online company, knocking our 30 yrs. 4.875 mortgage down to 15 yr, 3.75, $1500 costs; sliced our monthly in half, although we plan on paying on principle to pay off in 5 years. </p>
<p>We had same experience as Somemom. Original lender could not/would not come close to rate, wanted total re-fi, no good customer favors, etc. So went with online company. Paid first payment for re-fi November 1. Got note same day, saying our mortgage had been sold to another company…Bank of America…our original lender who didn’t want to deal on the re-fi…go figure.</p>
<p>DH is also mulling re-fi. We bought in 1998, and in 2003 went from a 30 yr fixed 6.125% to a 5.27% 15 year fixed. We are now 7.5 years into the 15 year – he wants to get a sub-4% fixed so we have a little more cash flow for EFC. The amount of cash flow to be generated is pretty small – mortgage was not large to begin with, and we are now paying more P than I.</p>
<p>We have a HELOC which we anticipate using at some point while both kids are in school. </p>
<p>I’m not sure it’s worth the trouble refinancing now, though the rates can’t be beat. I’m inclined to see how much we have to put on the HELOC and then decide if it makes to consolidate the primary and HELOC into a 10-year fixed or pay them separately, depending on interest rates. OTOH, borrowing on the HELOC makes us VERY motivated to pay it down quickly.</p>
<p>I’m the original poster; thanks for all of the truly helpful suggestions. Here is where we have ended up; 15 yr fixed jumbo at 3.634% APR with -.125 points down. This was through Nationwide. The hardest part was getting hold of the right person on their very busy phone lines…only two people were able to make re-fi deals in my state. We’ve been approved and are just waiting for the closing. With fingers crossed! Another great source; Jack Guttentag of the Wharton School, his website is mortgageprofessor.</p>
<p>More thoughts; citimortgage rates were really pretty good, but Nationwide for me, was better. Also, I did try to work with a mortgage broker, but found her to be unprofessional & inconsistent, didn’t have basic math skills, etc. I quickly realized that she was just out to close a deal, any deal.</p>
<p>Unbelievable, JG. congrats.
I’d personally go for the 30 and pay the 30 as if it was a 15. Preserves more cash this way and allows for any inflation. </p>
<p>Disclaimer, I have no current knowledge of rates and terms. 15 may be better than 30.</p>