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No cost refinancing for my home, will I save money?

If I do a no cost refinance with my current home at a 55% LTV, will I save money in the long run from a 6.5% rate? Or would costs be a better way to go? Currently at a 723 credit score and 15 years into a 30 year FRM. by brian._802_414 from Tulsa, Oklahoma. Dec 12th 2011 Reply


William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Doing a no cost refinance allows you to start saving from your very first payment. If you have to pay costs, then you have to out weigh the costs against your monthly savings to determine how long it will take to break even. Apply with a local mortgage broker, not a bank, and have him do a "total cost analysis". This should show you what your net tangible benefit would be and how long it takes to pay back your costs... WilliamAcres.com

Dec 12th 2011
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Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 1,823 contributions

If you are 15 years into a 30 year loan, now would be a good time to look at refinancing into a 15 year loan since rates are in the low to mid 3s%. Keep in mind that there are always costs for a loan. in a "No-Cost" scenario, it really is "No cost out of pocket or added to the principal". You accept a higher interest rate and the lender pays the cost. Generally the cost of a refi is recouped by the lender in 4-7 years, and then you are stuck with the higher rate for the rest of the loan. If you intend keep this home and loan for at least 7-10 years, you will probably get a better deal having the closing costs rolled into the balance and getting the best possible rate. I recommend finding a local Mortgage Banker/Broker (not one of the big banks). A Licensed Mortgage Originator will work with you and calculate the differences between the options so you can make the best decision for you.

Dec 12th 2011
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Harry Newell (harrynewell)
#27 ranked lender in Kansas - 17 contributions

All good answers. Shop around for a good rate with the largest Lender Credit toward your closing costs and pre-paids. Your current balance will be the determining factor as to whether or not it would be beneficial to you.call 1-855-QUOTE-RATE

Dec 13th 2011
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Nick Moore (Nick_Moore001)
#8 ranked lender in Oklahoma - 6 contributions

HI-We would need to look at the whole picture.. How much you financed when purchased, term and goals. You can reach me at 918.682.9037 or nick_moore@americaslenderonline.com.Sincerley,Nick Moore

Dec 13th 2011
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