I am need help as I don't really understand why I wouldn't refi or the break even model.
I have a 30 year mortgage (2023) with a 6% rate that I have a vendor offering 5.124% with point buy down. All costs would add $17k to my mortgage bring in a total of $554k.
I am not planning on selling anytime soon and I am renting it out at the end of this year.
Why would I not refi to a lower payment? I know everyone is saying Sept could be lower rates but I will not be in the house then, And I would like to lower my monthly payment.
Edit: in case it matters it only lowers the overall payment about $230.
Posted by RepresentativeFair17
3 Comments
Not worth it if you still have to buy points. Also not with it if you’re not getting a 1% reduction. That’s also a lot of closing costs for a refinance.
Nothing here is a good deal for you
You don’t have to still be in the house to do an IRRRL
All the shitty IRRRL lenders are out in force right now, trying to get people to refinance just within the VA-mandated 36 month recoup window. That’s a terrible recoup number right now, when you’ll likely want to refinance 7-8 months from now.
Don’t fall victim to the refi churners.
On top of those dubious lenders, you have a ton of loan officers and brokers who starving because they never learned how to succeed in a purchase-only market, and they are leaving all ethics at the door in pursuit of half-point refinances with plenty of fees rolled in so they can finally close a couple loans and double their YTD production and maybe catch up on their recoverable draw.
Trust the loan officers who advise not to pay points right now, who don’t use phrases like “skipping payments” or “no out of pocket closing costs,” and instead talk about low-cost options even if they come with a slightly higher rate, and that you’re almost certainly better off waiting a few months or even into early spring before you refinance.
Your 6% rate is below the current national top tier average of about 6.3%. In my opinion, the only people who should be doing an IRRRL right now are the ones above 6.625%, and even then, the value might not be there unless they’re in a big loan and don’t have to pay the VA Funding Fee.