any reason not to accept refi?

[amarowsky]

Hi. 3 years into my loan and rates have dripped low enough to consider this refi.

Current loan 673 a month , 400 goes to principle and interest monthly,140 to principle and 260 to interest. balance to pmi/insurance/taxes .l roughly 273 a month. I pay roughly and extra 150 a month to principle only on top of everything.
Current mortgage is 30 yr fixed @ 4.75%

New refi offer with capital one is 15 year at 2.8%
Principal and interest 500 a month with 180 towards interest and 320 to principle. And 215 for insurance and taxes. So total payment is 715. The kicker is they want $1900 down but they have a $1000 discount promo right now so only 900 down. I figure even with the 900 down ill be ahead on differnces of the down payment from the savings.

My home i believe is worth about 10k more than the value of the loan/ home at 73k . i think its worth about 15k more. Would the appraisal for the refi showing the home is more expensive be a bad decision at all or no? Does this sound like a good move? Especially considering ill get my downpayment back in savings in 9 months.

[parafly]

How long do you plan on staying in the home?

You may be over-thinking the situation. An interest rate decrease from 4.75% to 2.8% is very significant. You will save tens of thousands of dollars in total interest paid over the life of the loan. If you are staying in the home for the long term and can afford the new payment for a 15 year term, it's definitely a wise decision to refinance.

Closing costs of $900 are not bad, but you may be able to do better if you shop around. There are many lenders offering no closing costs in today's market, but it depends on your credit score and the amount of equity you have in the home.

[snafu]

2.8% for 15 years [2028] sounds like a terrific rate with $320. to principal & $180. [$500.] interest which I presume adjust as you get to midpoint. Is there any possibility that you have amassed 20% equity to skip mortgage insurance? I suggest calling your realtor/agent for a rough idea of what houses are selling in your district. Will Capital One re-set your rate when you finally get 20% equity whether it comes from accelerated payment, lower interest and increased valuation? Does it mean using a different insurer for mortgage insurance? Does Capital One receive a benefit? [sorry but Capital One has a less than stellar reputation in some situations] Keep in mind that increased valuation also means higher taxes.

I'm confused about the $1,900. reduced to $ 900. as a 'downpayment' applied to the principal or is it a re-fi fee? If you know your FICO score and excellent payment record what does your existing lender offer? Shop on-line for the no fee, re-fi, best mortgage rate.

[amarowsky]

Going from a FHA to a conventional. So the 900 closing costs are for appraisal fee , underwriter fee, ect... And that 900 include one month escrow paid too. But no there is no more PMI with the conventional and I checked and there is no early payoff /extra principle payment fee

[Shewillbemine]

I refinanced twice last year and have saved over $500 per month on mortgage payments.

Both times I paid ZERO dollars. Nothing.

You should shop around and find a company that won't charge you fees.