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I saw that interest rates have dropped in the last two years and thought I would see if we could lower our monthly payment by refinancing. I called our lender (Chase) and the offer doesn't seem so appealing - the APR seems high. Is it worth trying to shop around for a lower APR? I guess I should have asked them on the phone why the rate seems so much higher than what I see advertised.
original loan
originated 6/15/2011 from Chase:
4.75% APR, 30-year fixed, conventional (from Chase)
$937 monthly paid to principal and interest
original principal balance: $179,600
loan matures 7/1/2041
unpaid principal as of March 2013: $174286
refinance offer
as of March 6th, 2013 from Chase:
4.133% APR, 30-year fixed:
$3000 in closing costs
$860 monthly paid to principal and interest
property assessed at $225000 (county records) - this was our purchase price in 2011 - it's likely the market value has gone up slightly since then
it's my primary residence, in Texas
Credit score from Experian, March 6, 2013: 793 out of 830 (I didn't want to pay to get all 3 scores before I know if it's even worth it...) If anything the credit score should be higher now than it was in 2011, since income has gone up and credit card/student loan debt has gone down (all debt except the mortgage has gone down) since then)
It's uncertain how long we will be in the home - could be less than 5 years. But I just would really like to lower the monthly payment.
Last edited by Walter Benjamin; 03-06-2013 at 02:38 PM..
Rolling in $3k (+ potential escrow account re-padding), to save less than $100 a month, and then sell in 5 years?
$3000 / $77 monthly savings = 39 months just to break back even from rolling the costs into the loan.
If you leave in 60 months that's less than 2 years of driving down that balance past the existing threshold.
Fuzzy math. Save money elsewhere.
I agree that this particular offer makes no sense to do financially...
Quote:
Originally Posted by dad2jules
You should be able to get 3.75% with no closing costs- call a broker. No time to recoup, no break even point, save money month 1.
... was hoping that this would be the case. I'm going to get in touch with the broker who worked with us originally - he was really helpful.
Thanks everyone for the feedback.
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