What is the lowest rate now? I have 5.85 currently for 30 year fixed. I am lookig to go to a 20 year fixed, maybe 15. I need National companies or around Indiana. My score is above 740 and I meet all the usual requirements.
why would you want to spend 3+% in closing costs to save about a percent or less on the interest rate when you can just make principal payments to lower your balance and payoff the loan quicker that way? plus the higher interest portion is a higher tax deduction, if you need it
You don't necessarily pay 3 points. USAA only charges a point plus the costs of getting the house valued. All banks are different. But you're right about the higher taxes. That's the thing to keep in mind when refinancing. How much does the refinancing cost, how much does it save, and how long are you planning on being in the house. The save portion is the tricky part. For example: if you save $160 a month in interest, that means $160 less a month you can claim in taxes. For most that means you pay $40 more in federal income tax a month, so you only are saving $120. $120 X 12 = $1,440. If it costs you $5,000 to refinance, you should only do it if you're going to be in the house for at least 4 years ($1,440 X 4 = $5,760).
I don't see myself moving within the next five years. I think they are telling me it cost about 3000-3500 closing cost. If I can get 4.75 I think it would be good for me. Are there companies willing to give 4.75 for 20 year fixed?
Different areas, different brokers and different situations will lead to different rates, but I just locked in a refi with no closing costs for 4.75 for a 30 year. Dropped my rate 7/8 of a point and moved from a 5 year ARM to a 30 year fixed.
