Now's the time for one of my smart money friends to step up and tell me what the catch is w/ the mortgage refinance situation. I ***think*** I just saved $300/month on my mortgage going from one at 6.25 and another at (hold on) 8.04 to one single mortgage at 5.625. The best part is that I actually caught them trying to double bill me for the appraisal. I said to the 'mortgage expert' that there was a $500 charge on my credit card and another on the closing documents. He said, 'Oh no, I'll double check, I may have put $335 but I've never put $500.' Suffice to say he's at least done it once that we know about....
2/25/08
Re-fi
Now's the time for one of my smart money friends to step up and tell me what the catch is w/ the mortgage refinance situation. I ***think*** I just saved $300/month on my mortgage going from one at 6.25 and another at (hold on) 8.04 to one single mortgage at 5.625. The best part is that I actually caught them trying to double bill me for the appraisal. I said to the 'mortgage expert' that there was a $500 charge on my credit card and another on the closing documents. He said, 'Oh no, I'll double check, I may have put $335 but I've never put $500.' Suffice to say he's at least done it once that we know about....
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4 comments:
i'm no "smart money friend" or even a smart friend, but -- and this is just a hunch -- next time, you may want to go with someone who isn't out to swindle you.
I don't think wells fargo was out to swindle you. I think that this is SOP in refinancing practice - to extend the life of the loan. But, as you have pointed out, that will only really matter if you intend to stay in the house for the life of the mortgage. I think the rule of thumb on refinancing is that it's only financially worthwhile if the percentage interest rate drops by 2 points.
I'm sure Ted is just trying to razz me. But he should know that only women of capable of that. Unfortunately, VERY CAPABLE. (I see Julie is not trying to razz me).
The swindling part was the (attempted) double appraisal charge. Extending the life of the loan is more than SOP, it's inevitable and not swindling. I don't think you can do anything but go from a 30-year fixed to a 30-year fixed; they can't give you a 28-year fixed. BUT, even though the loan goes til 2038 instead of 2036, the total payout will be LESS. Offline, Jason brought up closing costs eating up the gains you make from the lower interest rates. That's a real concern; the relevant variables are how much of the loan is left and the difference in interest rates. In my case, the answer to both was 'a lot' meaning it was a no-brainer for me. As far as I can tell...
How much did you have to pay to refinance?
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