Which refi should I choose?
April 27, 2012 3:33 PM Subscribe
Two refi offers. One through Wells Fargo, which is the current mortgage servicer. Another through CapWest, via Costco. The CapWest one is lower, but I'm wondering if there is anything I'm missing.
Current owed: 172,000, 5.125% current PITI $1188. (I pay an extra $150/mo.)
WF: 30 yr fixed : 4% Full PITI payment would be approx $1038; closing fees $2800 ("closing costs on all these options are actually calculated into the payments I gave you", so I that means the loan would be 175K total.)
CapWest: 3.875% Full PITI would be $1002; closing fees $1800 (that's with something I don't fully understand they call a $400 "lender credit"). Fees not integrated into loan, but I feel like I can swing it right now.
Other factors:
a) I do currently enjoy having my checking/savings/mortgage all on the same WellsFargo.com website.
b) Depending on the appraisal, from CapWest, they could require mortgage insurance, an additional $80 a month until I get below 80% of the appraised value. That could be 3 years if it appraised @ $200,000; only a year if @$210,000.
c) The WF mortgage consultant is locally based, and of course there are many WF branches. CapWest would be a telephone/email relationship.
CapWest seems like the winner in fees and payments, but I'm not sure if I am missing anything. Thanks for any insights!
Current owed: 172,000, 5.125% current PITI $1188. (I pay an extra $150/mo.)
WF: 30 yr fixed : 4% Full PITI payment would be approx $1038; closing fees $2800 ("closing costs on all these options are actually calculated into the payments I gave you", so I that means the loan would be 175K total.)
CapWest: 3.875% Full PITI would be $1002; closing fees $1800 (that's with something I don't fully understand they call a $400 "lender credit"). Fees not integrated into loan, but I feel like I can swing it right now.
Other factors:
a) I do currently enjoy having my checking/savings/mortgage all on the same WellsFargo.com website.
b) Depending on the appraisal, from CapWest, they could require mortgage insurance, an additional $80 a month until I get below 80% of the appraised value. That could be 3 years if it appraised @ $200,000; only a year if @$210,000.
c) The WF mortgage consultant is locally based, and of course there are many WF branches. CapWest would be a telephone/email relationship.
CapWest seems like the winner in fees and payments, but I'm not sure if I am missing anything. Thanks for any insights!
Check out 15 or 20 year options. Your interest rate will be lower, your payment will be in the vicinity of what you,re paying now (counting the extra $150), and you'll save 15 years worth of payments.
posted by beagle at 4:19 PM on April 27, 2012
posted by beagle at 4:19 PM on April 27, 2012
What you, and you alone, have to decide is whether the extra $36+ you would pay monthly to Wells Fargo is worth it relative to the conveniences Wells Fargo offers, the certainty of paying PMI, and depleting your savings to pay CapWest's closing fees up front.
anecdata: We had a Wells Fargo mortgage for several years, and they allowed us to refinance at absolutely no cost to refinance to a lower interest rate (but, of course, resetting the term of the mortage). The refis were really as easy as promised. On the other hand, there's an "evil factor" associated with Wells Fargo. So much so that we got a bit unsettled by Wells Fargo and rolled our remaining mortage balance into a HELOC with a differend lender. YMMV.
posted by DrGail at 6:29 PM on April 27, 2012
anecdata: We had a Wells Fargo mortgage for several years, and they allowed us to refinance at absolutely no cost to refinance to a lower interest rate (but, of course, resetting the term of the mortage). The refis were really as easy as promised. On the other hand, there's an "evil factor" associated with Wells Fargo. So much so that we got a bit unsettled by Wells Fargo and rolled our remaining mortage balance into a HELOC with a differend lender. YMMV.
posted by DrGail at 6:29 PM on April 27, 2012
Best answer: See if you can get a no closing fees mortgage. Our broker offered us no points, no closing costs refinances. This meant we didn't have to start worrying about how long we would be staying in out home to justify the closing fees. And we could refinance again if rates continued to drop.
We started off with a 5.750 rate a few years ago. Jan 2010 we refinanced to 5.125 and then 7 months later refinanced again at 4.375. Because both refinances were at pretty much zero cost (other than appraisal and a couple of other line items) it was well worth our while. I think we could have for 4.250 at the time if we had paid some costs but it didn't seem worth it. (We should probably try refinancing again to be honest.)
In both cases of course, it resets our 30 year loan period so we didn't skip a month during refinancing and we pay extra against the principal too to offset that.
posted by NailsTheCat at 7:03 PM on April 27, 2012
We started off with a 5.750 rate a few years ago. Jan 2010 we refinanced to 5.125 and then 7 months later refinanced again at 4.375. Because both refinances were at pretty much zero cost (other than appraisal and a couple of other line items) it was well worth our while. I think we could have for 4.250 at the time if we had paid some costs but it didn't seem worth it. (We should probably try refinancing again to be honest.)
In both cases of course, it resets our 30 year loan period so we didn't skip a month during refinancing and we pay extra against the principal too to offset that.
posted by NailsTheCat at 7:03 PM on April 27, 2012
Best answer: I bank at Wells Fargo and use the on-line bil pay to pay my mortgage electronically - you can set up to pay automatically with no effort on your part so having your mortgage with another company is really no problem.
posted by metahawk at 7:27 PM on April 27, 2012
posted by metahawk at 7:27 PM on April 27, 2012
Response by poster: Thanks all. I think I'll try to see how close I can get WF to CapWest; I didn't even realize there were "no closing fee mortgages" available, so that leads me to believe I have significant wiggle room.
As far as a 15-20 year term, unless what I have plugged into the spreadsheets is wrong, I am happy ~paying~ as if I have a 15-20 year on a 30 year mortgage (and have it paid off in about 18 years). This seems much wiser - I tend to be the cautious sort - because the payment on a fifteen ($1436 monthly) could become onerous pretty quickly in the case of financial upheaval, whereas I could drop to the baseline on a 30 and have more wiggle room while I got things sorted out.
posted by BleachBypass at 2:34 PM on April 28, 2012
As far as a 15-20 year term, unless what I have plugged into the spreadsheets is wrong, I am happy ~paying~ as if I have a 15-20 year on a 30 year mortgage (and have it paid off in about 18 years). This seems much wiser - I tend to be the cautious sort - because the payment on a fifteen ($1436 monthly) could become onerous pretty quickly in the case of financial upheaval, whereas I could drop to the baseline on a 30 and have more wiggle room while I got things sorted out.
posted by BleachBypass at 2:34 PM on April 28, 2012
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So maybe I can close the gap.
posted by BleachBypass at 3:38 PM on April 27, 2012