Advice on Refinancing a Home

Messages
4,879
Location
Lakeville, MN
Refinanced our 30 year (with 22 years left on it) into a 15 year this year. Dropped our rate by 1.25%. Did all of the application etc... online with one of my local credit unions. Only phone call/physically meeting was to sign the final documents (and that was digital too - but confirming ID's, etc... was needed for notary purposes).

Point being, I got the rate I was happy with (perhaps not the rock bottom) with it all online and no hassle on my end. I was able to shop easily amongst four banks/credit unions I already have relationships with. Perhaps the broker route isn't all its cracked up to be...
 
Messages
10,699
Location
MA
This could use explaining, seems contradictory.

Doesn't title insurance cover the transfer - previous owner(s) to new owner.
Does title insurance survive sale? (Later fault found, I get sued later, I go back down the chain, etc.)
If it does not survive, do the rebate 'unused'? (Seems this and the last are inversely complimentary.)
Does one just prove current Title Insurance on a refi?

THX
Depends on the state and how it's done. Ours is an attorney state not a title company state. Buyer also pays for the title insurance not seller.

For a purchase, title insurance is about $3.65 per thousand with a $175 dual issue fee for both buyer and lender. If you're doing a refi, it's just $2.50 per thousand for the loan amount. The title insurance on a refi just covers the loan amount. There's no rebate or anything when you pay off the loan and when you have title insurance as the owner, it lasts for the life of the ownership. I did the math and I believe about 70% of the title insurance premium ends up with the lawyer in this state as their commission. It's a nice gig for the lawyer. Gave our regular lawyer who does closings for us all the time some easy million dollar sales so it was well over 2k in profit on the closing. Normal fee for a closing is around $600-$700 so that's a nice bonus on top of it. Representing the seller doesn't pay as much as there's no commission on selling title insurance. Whenever people have questions on whether they should buy owner's title insurance, I always refer them to the lawyer as they're the ones who make the commission on it so they should be the one selling it. After a few horror stories, about 98% of the people end up buying it. Only a couple people over the years have declined.
 
Messages
6,171
Location
Santa Barbara, CA
Rule #1 - no-cost refi. Don't pay for your new loan. Lender credit needs to cover sum of sections A+B+C. Don't roll costs into your loan.
Rule #2 - shop around. You don't care if they're local, online, nationwide, whatever. When you're doing a refi, there isn't the pressure to close like there is during a purchase, where it is helpful to use a local lender who deals with the agents (you'll pay more but it goes smoother).

LenderFi and LoanDepot have very competitive rates/credits.
We're in process with LD - 2.5%, 30yr, and getting enough lender credit to actually pay for the entire loan costs and some of our prepaids (prop tax)

If you can get a 30 yr rate at 2.5% or lower - you should take it. Invest the monthly savings. It isn't very hard to beat 2.5% CAGR for 30 yrs in the stock market. Also, we can itemize our deductions, making the effective mortgage rate even lower than 2.5%.
Heck you can buy EE bonds and in 20 years they'll double in value - that's 3.5% right there, plus they're state tax exempt.

We're not taking out cash, but don't mind that we'll be back to a 30 year term, and not 26 (bought in 2016).

Good topic to browse: https://www.bogleheads.org/forum/viewtopic.php?f=2&t=289559
 

GON

$50 Site Donor
Messages
578
Location
SLC, UT
""5. The rural agents from low cost of living states are the one to get, they will do refi even for California (maybe Hawaii too) living in Nebraska as long as they have a license, and everything over the phone. I have never, ever, met any agent in a refi, even the one 5 miles away from me. So why bother with a local bank?""

Funny you posted that PandaBear. I just refinanced, the best rate by far, was a broker in Nebraska. He gave me 2.25%. I wanted to stay with my current lender, Wells Fargo. They were over over 3 percent to refinance. I asked them to come close to the 2.25- they said the could not.
 
Messages
10,699
Location
MA
""5. The rural agents from low cost of living states are the one to get, they will do refi even for California (maybe Hawaii too) living in Nebraska as long as they have a license, and everything over the phone. I have never, ever, met any agent in a refi, even the one 5 miles away from me. So why bother with a local bank?""

Funny you posted that PandaBear. I just refinanced, the best rate by far, was a broker in Nebraska. He gave me 2.25%. I wanted to stay with my current lender, Wells Fargo. They were over over 3 percent to refinance. I asked them to come close to the 2.25- they said the could not.
The reason for the local bank is that they know the local laws and the fees. Otherwise the out of state banks just mention their fees and your 3rd party fees are a guess. Also when they screw up your loan, it's a lot easier to visit them in person than it is out of state. I did hear of a guy doing that once, had to drive through several states to visit the guy in person, that's how mad he was.
 

5AcresAndAFool

Thread starter
Messages
708
Location
Indiana
We are moving forward with one company, they offered the best rates, lowest fees (which are still a ripoff in my opinion) and best service. Likely we will refinance with them at this point.

One local bank was a contender, though not as good of a rate. Our current bank which happened to buy our loan after we refinanced in 2011 was a joke.

There was one company that got our information and proceeded to call every few minutes for an hour. They were immediateley off the list.
 
Top