Real Estate and Home Mortgages - Refinance 3yr ARM to 30 yr at 6.25
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Electric Blues
04-25-07, 03:12 PM
Hey all!
Our 3 yr ARM is adjusting in June and it was 4.625 "sigh" and it's jumping to 7.625%. Our lender is offering us a 30 yr fixed at 6.25% and no closing costs. The nice thing is, there's hardly any documentation and we're already qualified for the refinance. I'm very tempted to go this route since I won't spend much time getting it done. My question is, is this a good deal? Should I resist temptation and spend the hours of research to get the best loan? We're not planning to stay in the house too long, but it's comforting to know if something happens and we do stay, we won't be pressed to refinance or move. We are in IL and we have excellent credit (770 ish). Any help would be appreciated. Thanks!
Our 3 yr ARM is adjusting in June and it was 4.625 "sigh" and it's jumping to 7.625%. Our lender is offering us a 30 yr fixed at 6.25% and no closing costs. The nice thing is, there's hardly any documentation and we're already qualified for the refinance. I'm very tempted to go this route since I won't spend much time getting it done. My question is, is this a good deal? Should I resist temptation and spend the hours of research to get the best loan? We're not planning to stay in the house too long, but it's comforting to know if something happens and we do stay, we won't be pressed to refinance or move. We are in IL and we have excellent credit (770 ish). Any help would be appreciated. Thanks!
DIYliz
04-25-07, 06:40 PM
I am going to go ahead and say YES YES YES.
I have talked w/ several ppl lately who've been getting approved at 6.5% up to 7.5%. I would say 6.2% is pretty good and you should go for it. You don't want to get stuck w/ your rates going up and up and up.
g'Luck
I have talked w/ several ppl lately who've been getting approved at 6.5% up to 7.5%. I would say 6.2% is pretty good and you should go for it. You don't want to get stuck w/ your rates going up and up and up.
g'Luck
jpm121
04-25-07, 10:05 PM
Might as well, apparently the lender knows you're going to jump ship (with that kind of credit, why wouldn't you). So they're hoping to keep your business. 6.25 is pretty good right now, with no points and no hassles, even more so.
Electric Blues
04-26-07, 05:29 AM
Thanks guys. Everything is set up so I just need to give them the green light. It just seems too easy. I guess I' m used to a lot more leg work. I may do a little more poking around just to settle my mind, but it does seem like a good fit for us.
Family Guy
04-26-07, 09:00 AM
It doesn't hurt to shop, even if it's just for peace of mind. It doesn't have to take hours, just pad & paper and a few minutes to call around (remember, do it in one sitting).
Make sure there are actually no closing costs, not just no "lender" costs. You still set up your escrow account and pay closing agent fees. They may be charging a higher rate to cover the closing costs, whereas it might make more sense to go with a lower rate elsewhere and pay the closing costs. Just do the math to know. Many lenders ARE offering loans like this. That's why they like ARM's and interest only loans in the first place...1 loan = 2 in the long run ;-) So I wouldn't be surprised if this is a no-cost loan. They may even allow you to just sign the doc's at a notary.
A little advice: look into a 25 year amortization instead of going on 30 again. The rate is usually the same as a 30, not much benefit in rate. However, if you start over on 30 years, you can cost yourself some money. You've been there for 3 years now, don't start all over. The payment difference won't be too bad and you're putting more towards principle each month.
I hate to see people refi to save money but actually cost themselves money due to the term of the loan.
Make sure there are actually no closing costs, not just no "lender" costs. You still set up your escrow account and pay closing agent fees. They may be charging a higher rate to cover the closing costs, whereas it might make more sense to go with a lower rate elsewhere and pay the closing costs. Just do the math to know. Many lenders ARE offering loans like this. That's why they like ARM's and interest only loans in the first place...1 loan = 2 in the long run ;-) So I wouldn't be surprised if this is a no-cost loan. They may even allow you to just sign the doc's at a notary.
A little advice: look into a 25 year amortization instead of going on 30 again. The rate is usually the same as a 30, not much benefit in rate. However, if you start over on 30 years, you can cost yourself some money. You've been there for 3 years now, don't start all over. The payment difference won't be too bad and you're putting more towards principle each month.
I hate to see people refi to save money but actually cost themselves money due to the term of the loan.
Electric Blues
04-26-07, 04:17 PM
Thanks for the sound advice. I didn't know there was such a thing as 25 yr loans. I guess they could make just about any length loan if they wanted to. I will definitely look into it and you do raise a good point about having to start over again. Hindsight's 20/20 and 3 yr ARM was not a good choice to begin with seeing that we stayed longer than we planned. Funny thing is, I could've sworn that the 30 yr was close to 6% at the time, which made the 3 yr so attractive at 4.625. Maybe it was mid 5's? Anyway, I'd take that in a heartbeat now LOL. Thanks again for your time.