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Can I refinance my mortgage without paying additional closing fees? If so - where?

3,954 925 June 3, 2019 at 01:55 PM in Other (4)
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So I just bought a new house (new construction) in October 2018. I literally got the worst mortgage rate (5%) of the last decade. Now I see that 30-year mortgage rates are down in the 3s again. I want to refinance but I also don't want to go and spend another 6k in closing costs after having just done that.

Are there any options for me? Obviously, I understand I wouldn't get the lowest mortgage rate without paying closing costs but the gap between what is offered now and what I'm paying is so wide that I would be pretty happy with even half a percent decrease. My house is in Florida.

Thoughts? Suggestions?

Thanks!

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I have done refinances over the years with both AIMLoan and Amerisave. If you do an online quote, both will show options that have credits equal to or right around the closing costs.
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You could just do a quote search through any of the online refi quote engines. Even something like Zillow will let you punch in a few numbers and get quotes, many of which will have closing costs rolled in. Since it's a refi you may be less concerned about quality of service, speed, communication than with a purchase since there's less risk if it doesn't go smoothly.

We went from 4.25% to 3.625% fixed with little cost beyond an appraisal about a year after buying. It felt silly to refi so fast for less than a percentage point, but it's all relative; that was a 15% reduction in interest cost each year.
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Last edited by dukeblue219 June 4, 2019 at 10:07 AM.
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Quote from Vanquished
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Now I see that 30-year mortgage rates are down in the 3s again. I want to refinance but I also don't want to go and spend another 6k in closing costs after having just done that.
I'm in a very similar situation, and have also been looking. Even if you have some fees, unless you are planning to move soon, they should pay for themselves relatively soon.

One note, effective rate is still a hair above 4%. But, it's worth it most likely.
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Thanks everyone!

I was hesitant about just applying to different places. Everywhere you look they go through the whole damn process and then ask to pull your credit which I don't want to do without talking to someone about closing costs and rates first.

If they can roll in any additional fees to the mortgage that should be fine (to a degree). At 4% vs 5% I'd save $155 a month (assuming no additional closing fees) so I have a lot of wiggle room. unfortunately, I've not paid very off the original mortgage yet so unless the appraisal comes back at more than I paid for the house (the original appraisal 7 months ago was 16k more than I paid) I don't know how much they could roll into the new mortgage and keep the LTV under 80%

Glad to hear Amerisave is legit. I've seen them with good rates/low or no fees but thought it was too good to be true.
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Quote from Vanquished
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Thanks everyone!

I was hesitant about just applying to different places. Everywhere you look they go through the whole damn process and then ask to pull your credit which I don't want to do without talking to someone about closing costs and rates first.

If they can roll in any additional fees to the mortgage that should be fine (to a degree). At 4% vs 5% I'd save $155 a month (assuming no additional closing fees) so I have a lot of wiggle room. unfortunately, I've not paid very off the original mortgage yet so unless the appraisal comes back at more than I paid for the house (the original appraisal 7 months ago was 16k more than I paid) I don't know how much they could roll into the new mortgage and keep the LTV under 80%

Glad to hear Amerisave is legit. I've seen them with good rates/low or no fees but thought it was too good to be true.
I just recently refinanced. I searched a lot before contacting a lot of lenders for the reason I quoted you in red.
Don't make any big purchases until you're done refinancing.

If your credit score is high, the lender will work with you and get you the best of the best, or should anyway, mine did with lowered fees, etc.
My FICO is just shy a few single numbers from 800. I went with QuickenLoans which was the best thing I ever did. Fast and stress free! Yes, I was hesitant at first just like you were / are with Amerisave.
Also, QuickenLoans will never sell your mortgage out to another, so for the full 30-year loan refi I took it will always stay with them. At least that is what I was told.
I was able to get my mortgage down $300 a month. You do have to pay $500 for a good faith deposit (appraiser / title paperwork, etc.)...but you will either get that back in the form of a check at closing or you can add it to your loan balance.
I only received 1 hard hit to my credit, which is all I wanted.

Refinancing should be stress free and most lenders "should" let you roll your closing fees into the loan so your wallet won't take a hit. - Much luck to you. Smilie
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Last edited by TattyBear June 4, 2019 at 01:14 PM.
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Quote from TattyBear
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I just recently refinanced. I searched a lot before contacting a lot of lenders for the reason I quoted you in red.
Don't make any big purchases until you're done refinancing.

If your credit score is high, the lender will work with you and get you the best of the best, or should anyway, mine did with lowered fees, etc.
My FICO is just shy a few single numbers from 800. I went with QuickenLoans which was the best thing I ever did. Fast and stress free! Yes, I was hesitant at first just like you were / are with Amerisave.
Also, QuickenLoans will never sell your mortgage out to another, so for the full 30-year loan refi I took it will always stay with them. At least that is what I was told.
I was able to get my mortgage down $300 a month. You do have to pay $500 for a good faith deposit (appraiser / title paperwork, etc.)...but you will either get that back in the form of a check at closing or you can add it to your loan balance.
I only received 1 hard hit to my credit, which is all I wanted.

Refinancing should be stress free and most lenders "should" let you roll your closing fees into the loan so your wallet won't take a hit. - Much luck to you. Smilie
Good to hear about Quicken, like you I have excellent credit High Five so that might be a good option if the below scenario doesn't look good.

My friend referred me to a mortgage broker. And what they told me was they could get me 3.99% on a 30 year with the only costs being a $475 appraisal (ugh) out of pocket and 3900 closing fees rolled into the mortgage. This would reduce my monthly payment by $120 all said and done. I've only had the house for 7 months so I don't think I can reduce payments any more than that unless I get no closing costs. They used the starting price of my mortgage though, I believe it would be between $500 and $1,800 less ($132/mo savings) based on day of month due to interest payments.

What do you think? Should I go with this option or could I get cheaper closing costs elsewhere? This would be no points ofc.
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Quote from Vanquished
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Good to hear about Quicken, like you I have excellent credit High Five so that might be a good option if the below scenario doesn't look good.

My friend referred me to a mortgage broker. And what they told me was they could get me 3.99% on a 30 year with the only costs being a $475 appraisal (ugh) out of pocket and 3900 closing fees rolled into the mortgage. This would reduce my monthly payment by $120 all said and done. I've only had the house for 7 months so I don't think I can reduce payments any more than that unless I get no closing costs. They used the starting price of my mortgage though, I believe it would be between $500 and $1,800 less ($132/mo savings) based on day of month due to interest payments.

What do you think? Should I go with this option or could I get cheaper closing costs elsewhere? This would be no points ofc.
A lot will also depend how much equity you have in your home vs. appraisal at today's value, plus county taxes. I live in Illinois..nuff said about taxes. LMAO
I was surprised my home came in less than what I / we (the lender) thought (Zillow.com was way off), but the appraiser took the same square footage homes in my area (my home is from 3 different models in the area) so he compared models back from 2017 that sold which I thought was odd because the housing market has risen in the last two years.

3.99% is good High Five you beat me, I rcv'd 4.1%. Not sure if you'll find it lower than that.
I can't tell you much about closing costs, just remember... you have good credit, not delinquent on your payments.
A lender wants your business not discourage you to go elsewhere. Who you have should keep working and getting you the best 'til your gut feeling says yes. Big Grin

Also, in the appraisal..I'll give you an example. The house next door to me went up for sale, it was purchased to flip. Beautiful remodel in every room. House was listed for more than mine when done, but after appraisal came in lower than mine which shocked the hell out of me, I thought remodels helped a home.
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Last edited by TattyBear June 4, 2019 at 03:02 PM.

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Quote from TattyBear
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A lot will also depend how much equity you have in your home vs. appraisal at today's value, plus county taxes. I live in Illinois..nuff said about taxes. LMAO
I was surprised my home came in less than what I / we (the lender) thought (Zillow.com was way off), but the appraiser took the same square footage homes in my area (my home is from 3 different models in the area) so he compared models back from 2017 that sold which I thought was odd because the housing market has risen in the last two years.

3.99% is good High Five you beat me, I rcv'd 4.1%. Not sure if you'll find it lower than that.
I can't tell you much about closing costs, just remember... you have good credit, not delinquent on your payments.
A lender wants your business not discourage you to go elsewhere. Who you have should keep working and getting you the best 'til your gut feeling says yes. Big Grin

Also, in the appraisal..I'll give you an example. The house next door to me went up for sale, it was bought to flip. Beautiful remodel in every room. House was listed for more than mine when done, but after appraisal came in lower than mine which shocked the hell out of me, I thought remodels helped a home.
That's a good point about the appraisal. I assume my previous appraisal is accurate but maybe it's a rubber stamp by the builder (my house is new const. 7 months old).

Lucky for me, my house is the cheapest of 3 models so aside from the others of the same model my neighbors' houses should all be at least 75-100k more than mine. I'd obviously rather not pay $500 for an appraisal if they come back and say that the LTV isn't going to work because they think my house is worth significantly less than I paid for it.
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Quote from TattyBear
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I just recently refinanced. I searched a lot before contacting a lot of lenders for the reason I quoted you in red.
Don't make any big purchases until you're done refinancing.

If your credit score is high, the lender will work with you and get you the best of the best, or should anyway, mine did with lowered fees, etc.
My FICO is just shy a few single numbers from 800. I went with QuickenLoans which was the best thing I ever did. Fast and stress free! Yes, I was hesitant at first just like you were / are with Amerisave.
Also, QuickenLoans will never sell your mortgage out to another, so for the full 30-year loan refi I took it will always stay with them. At least that is what I was told.
I was able to get my mortgage down $300 a month. You do have to pay $500 for a good faith deposit (appraiser / title paperwork, etc.)...but you will either get that back in the form of a check at closing or you can add it to your loan balance.
I only received 1 hard hit to my credit, which is all I wanted.

Refinancing should be stress free and most lenders "should" let you roll your closing fees into the loan so your wallet won't take a hit. - Much luck to you. Smilie
Odd, I had a horrible experience with quicken at my last house. It seemed they aggregated to a dozen lenders who called me more often than the ones telling me my car is out of warranty. Perhaps they changed, this was a couple of years ago.

End story, as said, a refi is way easier, because it won't stop your purchase. Don't stress, read what the costs do as far as payback, you should come out ahead soon.
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Quote from uniquename
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Odd, I had a horrible experience with quicken at my last house. It seemed they aggregated to a dozen lenders who called me more often than the ones telling me my car is out of warranty. Perhaps they changed, this was a couple of years ago.

End story, as said, a refi is way easier, because it won't stop your purchase. Don't stress, read what the costs do as far as payback, you should come out ahead soon.
Thanks, they said it would be 33 month payback period. Not factoring in that my mortgage payment would be more principal than it is now.
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Thanks, they said it would be 33 month payback period. Not factoring in that my mortgage payment would be more principal than it is now.
More principal certainly helps cut that. I would suggest becoming familiar with amortization tables. My numbers are being run tomorrow. I would share generic over PM if that helps.
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You may can do what is called a streamline refinance with a lot less closing cost ---that may be what the broker was talking about (in the dark ages I worked in Mortgage lending for many years before kids).

I don't know anything about the online companies now. I can tell you that when we got our last mortgage, we skipped the banks (too slow here) and used a local mortgage company. It was the best loan we ever dealt with... easy and great rates and very legit. I could do 99 percent of it via email / online forms and dropping forms off. So, I am an ex banker and credit union employee that loved the mortgage broker experience. As long as they are on the up and up and legit and have good reviews---our experience was very positive.

Personally, what I have done in the past on my own house and past house is pay more on principal each month. it is a way to knock down years off your loan faster and essentially do the same thing. You have to be disciplined and do it every month or once a year, etc. Like put a lump sum on the principle each year (make 13 payments works, using the 13th on principle only) or a little each month. Are you able to do that financially and free up some cash? You can accomplish the same thing by paying it off sooner. Look at a good calculator and figure out if you prepay $100 a month or $500 a month or $1000 a moth or even $50 a month.....whatever you can afford towards principle each month, how much faster you can pay it down. We took a 30 year loan on our first house (I admit prices are Higher (Sorry wrote lower first) now) and had a 7 yr. payoff by doing this own our own. I know there have been times in our life at a certain house we no longer own, when we couldn't put any extra on it, but if you can at all, it' s worth seeing what the calculator says. You can really cut the life down. I just wrote out a check for principle when I did it and mailed it in each month on the house we knocked from 30 to 7 years this way. I'm sure you could do it online now at most banks (principle payment). Just make sure if you do it in person, the teller makes the regular pyt. and a principle pyt. Just set an amt. each month you are okay to draft out and do that. Make sure your loan now has no prepayment penalty (most don't, it would be a rare one that people get now that would have a penalty). Somewhere on your loan documents it says if there is or is not a prepayment penalty. That was disclosed to you somewhere in all those documents that were printed and some signed at closing... it's somewhere and you can look online or on your statement. My statement that comes each month says there is no prepayment penalty. Look on your last statement and see if your lender puts that on it.

I like this one:

https://www.calculator.net/mortga...lator.html

For us, that has been the way to go. Play around with the calculator and see what you can come up with. Even putting aside an extra $50 a month on principle will make a difference. If you could put a decent amt on principle each month, that would blow it out in no time.

Anyway, just another option for you if you are not comfortable doing all the closing and all again. Oh, and by the way---some places will let you reuse the appraisal if it is within 2 years... unless a certain type loan needs it. Just depends.
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Last edited by sandalwood June 6, 2019 at 02:40 AM.
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Quote from uniquename
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More principal certainly helps cut that. I would suggest becoming familiar with amortization tables. My numbers are being run tomorrow. I would share generic over PM if that helps.
Thanks, once upon a time I was very familiar with them lol. Last night I contacted the mortgage broker and told him to proceed, seems like from this thread it's a good enough deal to make it worth it. I also spoke with Wells Fargo (the current holder of my mortgage) and they couldn't quite match what I got through the mortgage broker. They estimated higher closing costs and a slightly higher interest rate for a total monthly payment of $1,187 vs $1,165 vs $1,285 which is what I pay now Mad

Quote from sandalwood
:
You may can do what is called a streamline refinance with a lot less closing cost ---that may be what the broker was talking about.
....

I like this one:

https://www.calculator.net/mortga...lator.html

For us, that has been the way to go. Play around with the calculator and see what you can come up with. Even putting aside an extra $50 a month on principle will make a difference. If you could put a decent amt on principle each month, that would blow it out in no time.

Anyway, just another option for you if you are not comfortable doing all the closing and all again. Oh, and by the way---some places will let you reuse the appraisal if it is within 2 years... unless a certain type loan needs it. Just depends.
I think streamlined refinance might have required I had an FHA loan to start with? I also saw that term but I don't think it's applicable to me, I believe in that process they also don't require a new appraisal which would have been nice. I spoke with WF about refinancing and they said I'd need to pay for a new appraisal as well, kinda stinks since my appraisal and house are only 7 months old. Also, that's the business to be in. We did appraisals in college (one of my finance courses was real estate valuation), it's not that hard - especially in my community where all properties are one of three models. And while it takes a day's work to complete, they also charge $500 lol, the professor who taught both of the real estate valuation classes I took worked as an appraiser on the side, nothing but gravy.

That calculator you linked to is pretty cool, with the amortization table it generates, though sad to see just how long it takes before my payment becomes more principal than interest. Also shows that the refinance will save me $50,000+ in interest over the course of the loan lol.
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That calculator you linked to is pretty cool, with the amortization table it generates, though sad to see just how long it takes before my payment becomes more principal than interest. Also shows that the refinance will save me $50,000+ in interest over the course of the loan lol.
That's a good calculator. Wanna see something great? Add your savings right back in as extra payments each month.

Paying extra is biggest bang for the buck in the first 2-3 years of the loan.
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