refinance mortgage loan???????????????
Deal Score0
Guys i just bought my first home, am an airforce veteran. got a mail saying im eligible for an interest cut down thru some VA authorized lender. My current rate is 5.0%, they are offering 3.75%. But im not planning to keep this home for more than 5 years. So shuld i worry about refinancing it paying all those costs?I already payed about $ 1500 on my points when i got this loan.Does it really worth the difference if i dont keep it for a long time?
I guarantee that is a scam! “Some VA authorized lender” could be anyone. All a mortgage broker needs is need is $ 100 to get VA authorized! 5% is the going rate today for a 30 year fixed, so you are set.
Most likely, the fine print will disclose an APR over 5%. By law the APR must be on that ad. Either way, that ad is most likely a RESPA violation if you feel like reporting it.
Furthermore, 30 year fixed rates have NEVER in history been below 4.5% with no points, so you will never need to worry about refinancing to save money, as the rule of thumb is you need to drop 1% to make up for the closing costs.
The new lending laws have weeded out most of the crooks but some remain.
Hi Jose,
What you need to do is look at the total closing costs and divide that # by your monthly savings to see if it’s worth it.
Here is an example:
If you have a loan amount of $ 200,000 at 5% your pi payment should be about $ 1106.93 per month.
Now let’s say that the closing costs are $ 5,000 and they will be added to your loan.
Now you have a loan of $ 205,000 at 3.75% for a 3 year ARM? with monthly payment of $ 954.13 which gives you a monthly savings of $ 152.80.
Now take the closing costs of $ 5,000 and divide it by the monthly savings of $ 152.80 = 32.72 months. This means you will break even once you hit the 33rd month. Is that worth it you?
http://loanrefinanceadvice.com/ has excellent information on how to apply for a refinance mortgage program, refinance rules and laws, and other helpful advice for anyone looking to refinance.
I can also guarantee that its a scam. I dont recommend you to follow this and if you have already spend so much to get this credit score then why you want to take risk.