Real Estate Matters: Couple considers refinance to take advantage of historically low interest rates
Q: When we bought our house, I read several of Ilyce’s books. They not only empowered me to stand up to mortgage agents, but they also saved us tens of thousands of dollars. I have since passed the books along to a brother-in-law who is looking at buying a home.
Now we are looking to refinance our mortgage, solely to take advantage of low interest rates and so my husband, who has 100% disability due to his service in the Marine Corps, can retire earlier.
I contacted a number of mortgage companies to see what they would offer. We have a 15-year fixed rate mortgage, and we have been paying it off for six years. We live in a very expensive area in Northern Virginia, just south of Washington D.C., and we still owe about $230,000 on the loan. We’ve been diligent about making at least one extra payment each year. The house is worth about $570,000.
My husband is eligible for a VA loan, but the rates are not the best.
So far, here’s the best deal that we have been offered: no appraisal, $1,050 for title work and notary, $570 for some Virginia fees, a processing fee of $1,250, and a $500 good faith deposit.
Our current interest rate is 3.375%. One lender is offering us 2.75%, but the person who recommended them to us is getting 2.25%.
We love all the financial advice that we get from Ilyce’s books and your website, but can you please just write a book exclusively about refinancing?
A: Thank you for the kind words about Ilyce’s book and website.
It can be very confusing to refinance your mortgage, but clearly you’re on the right path. You’re actually out there talking to various lenders and trying to understand the best deal you can get today.
Let’s start with your current mortgage. You owe about $230,000 on the loan, and your house is worth about 570,000. That’s well above the 20% equity lenders require for a conventional loan in order to sidestep private mortgage insurance and well below the limits to make the loan a jumbo loan. Jumbo loans have different rates and costs and frequently those rates and costs are higher.