We have finally reached that stated goal of a 4.5% mortgage rate and you can get it...if you like the terms. Here's the rub:
- it's for a fifteen-year, fixed-rate mortgage and...
- it costs 1.25% in points and...
- the loan amount has to be for $250,000 to $417,000 and...
- you have to have a 700 credit score or higher and...
- all of your monthly debts (including the new payment) can't exceed 40% of your documented income and...
- you must have at least 20% in equity if it's a purchase transaction or....
- you must have at least 20% in equity if it's a refinance of your purchase loan (no cash out) or...
- you must have at least 40% equity if it's a refinance where you took cash out of the house.
Lots of restrictions but it's here. Contact me if you want to give it a go.
PS: This might not be that bad of an idea if your rate is 6% or higher. If you took out a $300,000 loan, at 6%, for thirty years, your payment is $1798. Refinancing your mortgage to a 15-year loan, at 4.5% would raise your payment to $2294. That's only $500 a month.
That's an extra $90,000 that you'll pay towards your mortgage over 15 years. If you bought your home in 2006, you still have 27 years left. If we could knock off 144 payments at $1798, you'd save $259,000. So...
It costs you $3750 in points PLUS another $3000 in closing costs PLUS the $90,000 extra (the higher payments). Pay out $97,000, over fifteen years, and save $259,000? Hmmm, maybe you'd do better in your 401-k.
Then again, maybe not. I'm just sayin'.
I'll run the numbers for you if you contact me.
