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So which Bank has the best refi mortgage rates?


stormbringer
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Greetings friends,

What is a good source for finding the best deal on refinancing your home mortgage?
Also, what questions do you ask to compare apples to apples?

 

I saw this on a major Bank's application for a 3.125% Interest Rate 30 years:

 

Use these measures to compare this loan with other loans.

 

• In 5 Years:
$xx,xxxx Total you will have paid in principal, interest, mortgage insurance, and loan costs.
$xx,xxx Principal you will have paid off.

• Annual Percentage Rate (APR) 3.159% Your costs over the loan term expressed as a rate. This is not your interest rate.

• Total Interest Percentage (TIP) 54.454% The total amount of interest that you will pay over the loan term as a percentage of your loan amount.

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You can go to zillow and put in your parameters and you'll have a number of options from brokers.  I tend to stay away from the major banks as I find them uncompetitive to brokers who's income stream is derived for getting you into a loan, so they fight for the business.

 

For reference, I refinanced last month in a jumbo for 30 years at 2.75%, so I think that rate is not the best you can do.  I went with Guaranteed Rate and they were extremely efficient, went from application to closed in <30 days.

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Remember also that rate is not the absolute term to be looking at.  I think it was CV who has discussed taking a fractionally higher rate in exchange for lower costs and fees. 

 

And, as noted, big-box banks are not generally going to be the best source for best rates.  There is a reason a good broker is worth their weight in gold...

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3 hours ago, centex said:

Remember also that rate is not the absolute term to be looking at.  I think it was CV who has discussed taking a fractionally higher rate in exchange for lower costs and fees. 

 

And, as noted, big-box banks are not generally going to be the best source for best rates.  There is a reason a good broker is worth their weight in gold...

 

Good advice...

 

The shorter the amount of time you plan on staying in the home/keeping the note, the lower you should be aiming for fees.  You need to do the math to understand the cost/benefit.  In my particular example, I'll get back the upfront discount points 6x over in reduced interest expense should I take the note to full term.

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  • 3 weeks later...

This doesn't address "fees," per se, but it does discuss the interplay between points/lender credits and interest rates.

 

https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/

 

If you want to compare the cost of two mortgages, add up all of upfront the loan-related costs (deposits to escrow do not count, since you have to pay taxes and insurance no matter what, and estimating how much needs to be collected isn't easy when you apply because they don't know exactly when you are going to close).

 

To the upfront costs, add the sum of interest you will pay over the timeframe you intend to keep the loan (30-years are retired in an average of ~7 because people sell or refi or otherwise payoff long before the term ends).

 

A loan amortization calculator with cumulative interest is a handy tool for the calculation.

 

Repeat this for each offer or points/lender credit scenario and you have a valid reference point for cost comparison.

 

PLEASE PLEASE PLEASE PLEASE PLEASE don't feel like you've won the lottery when you hear "No closing costs," because that often means they make up for it over and over and over in the form of a higher interest rate.

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  • 3 weeks later...

This thread https://slickdeals.net/f/14173061 led me to Box Home Loans, which came through for me.

 

Watch out for their Lock Cancellation Fee of $450, but at 2.75% for $366K and 30 years, they were extremely professional, super quick to both communicate throughout the process and to bring me the option to close in like three weeks... I closed last week. Recommended.

 

I would like to thank the creators and contributors of that thread, without which I would be paying a lot higher APR with huge fees. I would like to thank the Underwriter at BMO Harris Bank for not working with me on an identical loan with a lot higher APR with thousands of $ in higher fees, which lead me to that thread and Box Home Loans.

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