Like many people, with rates at or below 5%, I am evaluating refinancing my mortgage right now. When doing so it can sometimes be bewildering how the different offers compare to one another:
1. Interest rates differ
2. Points differ (prepaid interest)
3. Origination fees differ
4. Other fees differ
5. Monthly payments differ
I am sure there are many other similar tools available, but the comparison tool that I have been using extensively this week can be found here.
(1) Enter the two competing offers, (2) use the APR not the stated interest rate, (3) ignore the “Loan Adjustments” fields unless you are getting an ARM, (4) press “Calculate”.
I am sure there are more elegant ways to do it, but the tool also allows you to do scenario analysis by playing with adjusting the points and origination fees.
As far as generating competing offers to evaluate, I’ve been using the link on Yahoo Finance here (it uses BankRate.com data). Sort on the “APR” column not the “Rate” column.
If you want to throw yourself into some serious mortgage/refinance research, the Mortgage Professor appears to offer information skewed in the consumer’s rather than lender’s direction. (Warning: His website looks like it was designed in 1996, but the info is good and regularly updated.)
1 comment:
Richard, I was checking into refinancing a few weeks ago, but I was told that 15- and 20-year mortgages strangely had higher interest rates than 30-year, and also that paying points was necessary to get into the below 5% range. So I sort of gave up, because I don't want to pay points or origination fees, and my interest rate is currently 6%, so it's not that bad to begin with. However, if you find a place that will give you a sub-5% rate with no points or origination fees, please let me know!
Also, unrelatedly, did you and Becky ever sign on with USAA? They extended their membership base, so Laurie now qualifies. WORTH IT!
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