With the 10 Year Treasury yield crashing through 2% and hovering around 1.5% for weeks now, it’s an optimal time to exploit the lowest rates we’ve seen EVER. However, there are so many dozens of different options to choose from ranging to terms to rates to closing fees, it’s tough to do an apples to apples comparison of what the best refinance option is for you. Here are some of the criteria that were important to me and why I avoided some of the common refinance structures:
No-Cost – Personally, I’ve been hesitant to part with thousands of dollars in closing costs even if the payoff seems to be there since I like to keep a cash buffer in my emergency fund and put my cash to work elsewhere. For this reason, I’ve been continually monitoring No-Cost Refi Deals (make sure to read this to understand the difference between no-fee and no-cost so you don’t get burned), so I could have the best of both worlds – no cash out of pocket at closing AND a more favorable mortgage structure…
…Weigh in on The Perfect Refi Terms for You
Best way to refinance? Jubilee, but it will never happen. So I guess the next best thing is collapse, right? John
I figure I gotta pay the bill eventually, so might as well hit the trifecta – decrease the term, decrease the monthly payment (via lower rate overcoming shorter term) and no out of pocket fees at closing (also no add’l principal). These insanely low rates have made all this possible even when I had a respectable 30-yr at 4.625%
My bank is offering a 12 year balloon at 2.625%. I could save $180 a month.
Once Bernanke is done with our economic system, I’d be able to pay off the mortgage in 12 years with 5 gold coins.
Another option is a 30 year at 3.75% with zero points. I’d save $100 per month. Who cares about the payoff date when you can borrow at a tax adjusted 3% rate?
Can I get better than a 3% return over the next 10 or fifteen years rather than paying down principal? I think so.
Darwin says: “Weigh in on The Perfect Refi Terms for You”
Ok. How about no money down and the chase is on?