Mortgage refinancing question
Question: You should try shopping around with banks in your area using the Internet. See what is available… and shop around. Also, from my personal experience if you call Bank A and tell them that Bank B is offering a better deal, usually Bank A will sweeten the deal for you.
Answer: You are so right. Several years ago I was looking to refinance my mortgage. The best local rate I could find was 7.125%. I called my existing mortgage company and asked for a quote. They offered 7.25%. I told them that I already had 7.125%, so they offered 7%. All these rates were with no points, a 1% origination fee and similar total fees. Mortgage rates are indeed negotiable.
I would love to refinance again now that rates are even lower, but they not low enough to overcome my closing costs yet. My biggest savings was the MIP being dropped. We had an FHA loan and we paying about $85 a month in MIP. When we refinanced, we were borrowing less than 80% of the home’s value on a conventional loan, so we saved that $85 per month and got a hefty check back from FHA for the MIP we had prepaid.
We elected to escrow taxes and insurance, even though we were not required to do so. The weird thing about that was that they would not just transfer our escrow balances from one loan to the other. We had to fund the new account at closing, then they sent us a check for the balance of our old account.
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Filed under: Home Equity Loan
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