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Best way to do a 30-year cash out refi?

4 10 December 19, 2017 at 01:49 PM
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Last Edited by simpleman1 December 20, 2017 at 01:09 AM
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I bought my home for $200k cash in 2014 and is worth $250k today.

I have excellent credit (800 credit score) and $1M in other assets.

I'd like to pull out $200k (80%) if I can lock in a nice 3.8% - 4% APR for 30 years.

I don't have the need for cash but I feel confident about:

1. Rising rates and

2. My return on invested capital being much greater than 4% in the long term. So it's a nice opportunity to lock in a low rate.

I look at zillow and I get 3.7% APR but comes with $4.6k fees but I've never done a mortgage/refi in my life.

What's the best place to look for and find a slick deal on rates? Thanks!

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Could you even get under 4% (realistically) with such an arrangement? Poking around online I only find under 4% for a 30 with like $7k in fees laugh out loud APR on that is *just* under 4%.
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cap center did cash out refi for me. only a $900 fee which was apparently a fed thing, not even for them. got in at 3.625, but that was a month before the election last year. they had no problem going to 80%LTV. fairly easy process, seemed much faster than when I got the first mortgage in 2014. point is there are places that do it with good rates for little to now fees. shop it around.
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Even with credit 740+ (the top tier) there are pricing adjustments for 80% LTV as well as cash-out (v. rate/term) refinance; that is why you are seeing large fees associated with lower rates.
A true zero origination 80% cashout on a Fixed 30 will currently be in the 4.125% range (+/-).

Is it worth you paying fees to buy down the rate? To answer that you need to compare the stack of rates (as all rates are available every day; and it is the price associated with that Note Rate which changes daily based on markets). Look at 3.75%, 3.875%, 4.00%, 4.125% and 4.25%; see the costs/credits/etc and determine the best structure for your specific scenario.
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Quote from Dr. J
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Could you even get under 4% (realistically) with such an arrangement? Poking around online I only find under 4% for a 30 with like $7k in fees APR on that is *just* under 4%.
Where did you search? Points/Fees don't mean much in the long run. It's the APR that matters. I see APR around 3.82% when I pay $5k in fees: https://i.imgur.com/kepLLU9.png
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Quote from b1g_bake
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cap center did cash out refi for me. only a $900 fee which was apparently a fed thing, not even for them. got in at 3.625, but that was a month before the election last year. they had no problem going to 80%LTV. fairly easy process, seemed much faster than when I got the first mortgage in 2014. point is there are places that do it with good rates for little to now fees. shop it around.
Where do you suggest I shop around? Is there a particular site that aggregates mortgage rates?

EDIT: I searched on CapCenter - they do not service Florida it seems?
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Last edited by simpleman1 December 23, 2017 at 02:34 PM.
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Quote from simpleman1
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Where do you suggest I shop around? Is there a particular site that aggregates mortgage rates?

EDIT: I searched on CapCenter - they do not service Florida it seems?
Yeah sorry. Cap center advertises where i live so that's how i heard of them.

As for shopping around there is lendingtree and bankrate. Also google the loan you want and it will bring up some other aggregators. Take your lowest offer and shop it to the others to see if they will beat it.
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Quote from simpleman1
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Where do you suggest I shop around? Is there a particular site that aggregates mortgage rates?

EDIT: I searched on CapCenter - they do not service Florida it seems?
In Florida you have a Mortgage Tax and an Intangible Tax that you cannot avoid and will add to your costs.

Plus, as previously mentioned, there are pricing adjustments for 80% LTV and Cashout Refinance transactions.

At this time I do not see how you can have under a 4.00% APR between FL closing costs and the type of transaction; and if you do the costs would probably not make sense for the lower rate.

Each scenario is unique and must be evaluated individually - and should not be compared to what someone else may have said they had gotten (unless the scenario was completely identical, which is not usually the case).

Just my .02.
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Ahh so it seems FL is not a great place to refi in. Should have specified my location. Though I did say it was a little over a year ago.
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Quote from tiedyed1
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In Florida you have a Mortgage Tax and an Intangible Tax that you cannot avoid and will add to your costs.

Plus, as previously mentioned, there are pricing adjustments for 80% LTV and Cashout Refinance transactions.

At this time I do not see how you can have under a 4.00% APR between FL closing costs and the type of transaction; and if you do the costs would probably not make sense for the lower rate.

Each scenario is unique and must be evaluated individually - and should not be compared to what someone else may have said they had gotten (unless the scenario was completely identical, which is not usually the case).

Just my .02.
Thanks. In FL, the mortgage and intangible tax costs are $60 per $1000 in refinance value. So for $200k it's $1200.

For APR, I'm getting 3.722% APR excluding Florida taxes: See https://i.imgur.com/65aDW0M.png

So what do you think?

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Quote from simpleman1
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Thanks. In FL, the mortgage and intangible tax costs are $60 per $1000 in refinance value. So for $200k it's $1200.

For APR, I'm getting 3.722% APR excluding Florida taxes: See https://i.imgur.com/65aDW0M.png

So what do you think?
I think that's a decent rate. You can take the difference in your new mortgage payment and old one, then spread that out monthly until it totals your closing costs on the refi. If that takes a long time (ie 15 years) and you plan to move out before then it may not be worth it. You would have shelled out those closing costs and never made up the difference with the lower payment.

Is that Loan Discount Fee points that you are paying to get that rate? If so that's was my intention of telling you to shop around. There could be lenders giving better rates without you having to buy it down with points.


edit - reread the thread. Seems you weigh more heavily on APR then the out of pocket costs currently. I suppose you could just subtract the closing costs from the 200k cash out to get the amount you will have to invest. If you are satisfied then that may work for you.
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Last edited by b1g_bake January 3, 2018 at 06:22 AM.
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Quote from simpleman1
:
Thanks. In FL, the mortgage and intangible tax costs are $60 per $1000 in refinance value. So for $200k it's $1200.

For APR, I'm getting 3.722% APR excluding Florida taxes: See https://i.imgur.com/65aDW0M.png

So what do you think?
Just make sure this is for a cashout refi (as it is not specified within that screenshot).
The rate of 3.625% reflects you are paying 1.00 point to buy it down; but then there is a lender credit listed to offset part of that.

It looks very competitive, but highly suggest you review a formal Loan Estimate (LE) provided by the lender to see everything; as online screenshots are not always reliable and as detailed as actual.
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