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VAer1  
#1 Posted : Friday, November 12, 2021 10:23:02 AM(UTC)
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What is current mortgage refinance rate? I feel that 2.75% for 20 years loan (refinance) is still high.

Thanks.
Navy Bubblehead  
#2 Posted : Friday, November 12, 2021 11:51:51 AM(UTC)
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Originally Posted by: VAer1 Go to Quoted Post
What is current mortgage refinance rate? I feel that 2.75% for 20 years loan (refinance) is still high.

Thanks.


There are SOOOOO many variables, it is impossible to answer that question. 2.75% is not a bad rate. Lock it in before the Fed starts bumping rates up.
VAer1  
#3 Posted : Friday, November 12, 2021 12:00:45 PM(UTC)
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Originally Posted by: Navy Bubblehead Go to Quoted Post
Originally Posted by: VAer1 Go to Quoted Post
What is current mortgage refinance rate? I feel that 2.75% for 20 years loan (refinance) is still high.

Thanks.


There are SOOOOO many variables, it is impossible to answer that question. 2.75% is not a bad rate. Lock it in before the Fed starts bumping rates up.


Yes, I will lock it in. But it is not very attractive (from 3.25% to 2.75%).

A few years ago, I paid quite a few thousands on buying points in order to get 3.25% rate. Now when I look back, it was not quite worth to spend those few thousands.

Edited by user Friday, November 12, 2021 12:11:02 PM(UTC)  | Reason: Not specified

joejoetj  
#4 Posted : Saturday, November 13, 2021 3:32:54 AM(UTC)
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This will depend on the amount you are refinancing. For instance what are your costs going to be? For a 100k loan the .50% is $6,120 over 30 years.

Anyways on to some actual numbers. That $6,120 in todays dollars is $1,479.67 at 2.75%. If you invested that $1,479.67 and got the average rate that the S and P has over the last decade (10%) it would grow to 9075 at the end of the 30 year period.

.5% difference For a refi the you are probably better served just putting that money in your 401k honestly. You would have to be refinancing a huge loan in order to save enough to make your money back after closing costs. Which by the way is the real question you need to ask is when do you repay yourself y our closing costs and start actually saving money.

Edited by user Saturday, November 13, 2021 3:34:51 AM(UTC)  | Reason: Not specified

Lil Bits  
#5 Posted : Sunday, November 14, 2021 5:41:59 AM(UTC)
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I read Navy Federal Credit Union is offering 1.89 percent. You might want to look into it. We just move back to the US, the market is crazy, inventory is extremely low, found a home. We have 4 years till retirement so paying cash. We were considering renting till prices dipped, leveled out but after weighting the cost of paying rent for a year or two and paying to move our household, buying in this inflated market is a wash.

Edited by user Sunday, November 14, 2021 5:45:25 AM(UTC)  | Reason: Not specified

FatHappyCat  
#6 Posted : Sunday, November 14, 2021 5:52:23 PM(UTC)
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The VA doesn't issue or give out loans, they only guarantee them. Ultimately, you still need to convince a bank to underwrite the loan and bank rates varies based on a # of factors.

Navy fed in the DC region was offering 2.25% 30 year fixed buying 1.75 points in June 2021. This was with a 40% downpayment though I'm sure you could put down significantly less if you're just refinancing. You can probably do below a 2 if you do a 15. I haven't found any place that give sub 2% on 30 years.
Allsourceguy  
#7 Posted : Tuesday, November 16, 2021 9:02:51 AM(UTC)
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Originally Posted by: joejoetj Go to Quoted Post
This will depend on the amount you are refinancing. For instance what are your costs going to be? For a 100k loan the .50% is $6,120 over 30 years.

Anyways on to some actual numbers. That $6,120 in todays dollars is $1,479.67 at 2.75%. If you invested that $1,479.67 and got the average rate that the S and P has over the last decade (10%) it would grow to 9075 at the end of the 30 year period.

.5% difference For a refi the you are probably better served just putting that money in your 401k honestly. You would have to be refinancing a huge loan in order to save enough to make your money back after closing costs. Which by the way is the real question you need to ask is when do you repay yourself y our closing costs and start actually saving money.


Hey im confused how did you get the $1,479.67 ?

joejoetj  
#8 Posted : Tuesday, November 16, 2021 10:40:17 AM(UTC)
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Originally Posted by: Allsourceguy Go to Quoted Post
Originally Posted by: joejoetj Go to Quoted Post
This will depend on the amount you are refinancing. For instance what are your costs going to be? For a 100k loan the .50% is $6,120 over 30 years.

Anyways on to some actual numbers. That $6,120 in todays dollars is $1,479.67 at 2.75%. If you invested that $1,479.67 and got the average rate that the S and P has over the last decade (10%) it would grow to 9075 at the end of the 30 year period.

.5% difference For a refi the you are probably better served just putting that money in your 401k honestly. You would have to be refinancing a huge loan in order to save enough to make your money back after closing costs. Which by the way is the real question you need to ask is when do you repay yourself y our closing costs and start actually saving money.


Hey im confused how did you get the $1,479.67 ?



Net Present Value of money calculations

That is what $6,120 dollars of 2051 money is worth in 2021 dollars (how much you save if you pay the full term of a 100k loan) in 30 years corrected for todays dollars.

However that isn't really accurate now that I think more about it. That is calculated as one lump sum in 2051 while you are saving 17 bucks a month over 360months.

17 bucks a month over 30 years actually has a net present value of 1,953.21 in 2021 dollars.

If you add 204(204/12 = 17.25) bucks a year to your 401k and get the average the S&P has gotten over the last decade (10%) that 204 x 30 would be worth $33,556.78 2051 dollars.

I was just trying to show you the math behind your decision. You will have closing costs of between 2,000 and 5,000 for every 100k you refi. However as you can see the value of the savings is only 1,953 bucks in todays dollars.

The numbers change as the numbers get larger so I don't know at what point it becomes worth it to you, or if the saving is now.
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