Help me decide what Refinance option to go with.

[g2outfitter]

So I'm doing a cash out refinance and unfortunately the appraisal came in a little lower than expected and appraiser won't budge. Cash out will be for small home improvements ie metal shop, higher interest loan payoff and possibly down payment on a small place at the coast. So hears my options and dilemma.

30 yr Current rate 3.375%

2.875% with like 14k in closing cost due to points and 12k less in cashout

3.25% zero closing cost other than prepaids and get 12k more in cashout

Or wait a month for possible higher appraisal value for slim chance to pull out possible 30k more

We will stay in home atleast 12 to 15 years unless something crazy changes.

Thanks in advance for comments.

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[az2tx]

Don't wait, with inflation so high its a matter of time until the feds bump interest rates up

[jay07ag]

Don't wait, with inflation so high its a matter of time until the feds bump interest rates up

I agree with this


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[kae006]

We need all your numbers to be able to say what is best for you, there are several break even calculators available for free online that will at least help steer you in the right direction. However, you mentioned paying off high interest debt - depending on how much you need to accomplish your goals will also have a large impact on which refi is more beneficial for your situation.

Crunch the numbers and choose the option that will net you the most savings long term.

[g2outfitter]

We need all your numbers to be able to say what is best for you, there are several break even calculators available for free online that will at least help steer you in the right direction. However, you mentioned paying off high interest debt - depending on how much you need to accomplish your goals will also have a large impact on which refi is more beneficial for your situation.

Crunch the numbers and choose the option that will net you the most savings long term.

I'll edit post with numbers.

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[g2outfitter]

We need all your numbers to be able to say what is best for you, there are several break even calculators available for free online that will at least help steer you in the right direction. However, you mentioned paying off high interest debt - depending on how much you need to accomplish your goals will also have a large impact on which refi is more beneficial for your situation.

Crunch the numbers and choose the option that will net you the most savings long term.

Actually couldn't edit but here they are

Loan is for 612k

2.875% with like 14k in closing cost due to points and 118k cashout

3.25% zero closing cost other than prepaids and get 130k cashout

About $124 difference in monthly payment

$7348 difference in loan balance at 12 year mark

44k total saving at 30yrs in interest wont be staying 30 years.


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[Codie]

Will take 8yrs to make up the difference in cash out amount with the interest rate savings

[kae006]

Actually couldn't edit but here they are

Loan is for 612k

2.875% with like 14k in closing cost due to points and 118k cashout

3.25% zero closing cost other than prepaids and get 130k cashout


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Origination date, current term and new term (assuming 30 for both)? Appraisal amount? Not applicable to your breakeven but helps with the overall picture. No closing costs is attractive, but if your timeline in the home is truly 12-15 years you will likely benefit more from a .375% APR reduction.

[eastover53]

Two months ago, I called the bank that has my mortgage (30 year 4.75%). Small regional bank in five small towns. I Told the loan officer that I was going to shop for a refinance.
She lowered my rate to 2.75%. For free. Nothing. Nada. Lowered my note $300 a month.

[g2outfitter]

Error

[kae006]

Two months ago, I called the bank that has my mortgage (30 year 4.75%). Small regional bank in five small towns. I Told the loan officer that I was going to shop for a refinance.
She lowered my rate to 2.75%. For free. Nothing. Nada. Lowered my note $300 a month.

Wow that's awesome. Rates haven't average >4.75% since 2009, would have been even cooler if they did it 10 years ago.

[g2outfitter]

Origination date, current term and new term (assuming 30 for both)? Appraisal amount? Not applicable to your breakeven but helps with the overall picture. No closing costs is attractive, but if your timeline in the home is truly 12-15 years you will likely benefit more from a .375% APR reduction.

Appraisal was low at 765k. Loan will be 612k.

I currently owe 475k. 3.375%

Date of closing is Jan 24th. Origination date Feb 2022

The extra 11k from both loans would help but not a ball breaker as some of my plans will be put on hold temporarily.

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[kae006]

Appraisal was low at 765k. Loan will be 612k.

I currently owe 475k. 3.375%

Date of closing is Jan 24th. Origination date Feb 2022

The extra 11k from both loans would help but not a ball breaker as some of my plans will be put on hold temporarily.

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Makes sense they're capping you at 80% LTV. If your timeline of 12-15 years is honest, you'll benefit more from option 2. Push the lender to reduce the points they're making you pay to lock in 2.875%. As others have stated, I wouldn't risk waiting a month. The odds of rates rising are probably greater than that of your appraisal rising, and doubt it would be worth paying another appraisal fee.

[g2outfitter]

Makes sense they're capping you at 80% LTV. If your timeline of 12-15 years is honest, you'll benefit more from option 2. Push the lender to reduce the points they're making you pay to lock in 2.875%. As others have stated, I wouldn't risk waiting a month. The odds of rates rising are probably greater than that of your appraisal rising, and doubt it would be worth paying another appraisal fee.

So to be clear, option 2 beig the 3.25% if we don't plan on staying past the 12 to 15 year range. That's the way I'm leaning. These numbers will be it, no more negotiating with lender. I checked with a few other lenders today and they were alot higher even with points.

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[kae006]

So to be clear, option 2 beig the 3.25% if we don't plan on staying past the 12 to 15 year range. That's the way I'm leaning. These numbers will be it, no more negotiating with lender. I checked with a few other lenders today and they were alot higher even with points.

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No sorry, I misspoke. I meant the lower interest rate option, option 1.


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