Is Refinancing Your Mortgage Worth It?

[@TheRamseyShow]

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[@vcupiano]

My dad and mom payed off there beautiful home years ago. Fast forward , moms dead, dads just put a lien on the house which doesn’t need to be payed until he dies. Mom would be PISSED, as my father who’s beginning to lose it, is spending money like he’s just won the lottery or something.

[@jaaxoon]

Lol these numbers are so far gone at this point. Many people got very fortunate.

[@XaXiuHeo]

Should I refinance my current rate is 3.25% to 2.875% loan amount is $460k, closing cost is $9k with option impound which mean escrow will withhold 6 month homeowners insurance and 4 months properly tax?

[@rogeliogarcia392]

Should I refinance my home? I have a 30 year mortgage and I wanna refinance from a 4.8% to a 3.25% interest? My payment will be cheaper by 60 dollars per month and my pmi will be gone but closing cost will be 7,000 . Should I refinance? I would love your advice? Thank u.

[@jonathanyugi455]

I just refinanced 4 months ago frm a 3.675 to a 3.365% with the intention to drop the PMI! Now my question is should I refinance to a 2.5%. Or just stay where I’m at? Thank you in advance!

[@phuntsoknamgyal9596]

love this guy..

[@ThinkBlueAZ]

Didn’t even ask if he could afford the higher monthly payment without being house poor.

[@logicalmrspock]

I have a similar situation to this caller and could use help with a decision... Balance: $133,150 Interest Rate: 4.375% Original Term: 30 years Current PMI per month: $153.80 Can refinance down to a 15-year 2.625% (1.750% savings) However, total closing costs look like $9,250 ($4320 loan costs + $4930 escrow/prepaids/etc) The total closing costs has me a bit hesitant on if it's worth it, but I *HATE* paying ~$150 in PMI each month.

[@patrickkillabrew6207]

Shop around for lower closing costs. Then pull the trigger. Ignore the prepaids. They aren’t an actual expense of the loan.

[@JenniferBeeston]

For those fees you must be buying the rate down. Make sure you do the math to make sure it makes sense to buy the rate down. I have a video that explains points and when to buy them on my channel.

[@MichaelJohnson-by3vf]

don't buy any points. Do a no point loan. Then your closing costs will be lower. The points usually take about 4 years to break even, but the average mortgage only lasts 3-4 years before the owner refinances, moves, or pays off the loan and so the bank makes money, not you.

[@LuigiFan1305]

There are tons of lender that don't charge any closing costs including escrow, title, appraisal, etc.... Shop around and do your research. You can easily refinance without all the extra costs

[@MichaelJohnson-by3vf]

@@LuigiFan1305 the appraisal can be waived if you have enough equity, but you have to pay the escrow/title fee. Sometimes the lender credit can be enough to cancel out but that's not the same thing.

[@inertiazero]

does refinancing affect your property taxes? i bought my place 8 years ago for 350k and now it's worth 500k. The property tax is 2% of the home value. Does a refi re-access the property and thus change it to 2% of 500k?

[@edwardbarraza4848]

Yes

[@fratdaddy7434]

Yes but many other factors to consider

[@tudocervera3764]

question if you can spare a min. . bought home 4 yrs ago. 30yr 4.25 interest. id like to refinance at 3% interest 30 yr . $1455 .00 payment rt now. we plan on staying in this home , not sure if its worth refinancing.. ive been chipping away at the principle.. current balance is 194k.. love your show by the way.

[@MJ-cf9nl]

Because you will be reducing your rates by 1.25 I would say do it. It will save you $2425 per year on your 194K balance. So depending on how much your closing cost will be, if your closing cost is 5K then it will take you only 2 years to recover that and then it is all extra cash in your pocket after that instead of the lender's pocket. This is a good deal if you can lower your rate by 1.25, usually just lowering by 1 point is a good enough deal to refinance.

[@naana-scelyne6370]

Hi Dave, Should I refinance with a loan of 282k and current interest rate 4.7? New loan will be 288k closing cost 6k and 3.2 interest rate . Bought the home over year ago.

[@MJ-cf9nl]

Yes do that and today if you can because you are lowering your rate by 1.5, this will save you $4230 per year and it will take you less than a year and half to make it up (recover your 6k closing cost). Then after that it's all extra money in your pocket instead of the lender's pocket. This is a very good deal for you, they usual recommend people to refinance if they are going to lower their rate by 1 point or more and in your case 1.5 wow...

[@fratdaddy7434]

I can help you I’m a broker

[@alfredoespinosajr5422]

Have a current loan of 53.000 with an 3.85 interest rate and 25 yrs more to go does it worth to refinance to go with a 3.00 interest rate in 15 yrs but with a closing cost of 5000?

[@timothyyhtomit]

No that’s too low of a loan

[@unleashedrider4309]

Count the whole 5 yrs of payments and whatever that number is basically you can kiss all that money goodbye if you refinance. Because the beginning to the middle of the loan is where you pay the majority of the interest. When you get towards the middle to the end of the loan the majority goes to principal. Check out an amortization chart

[@ChicagoTRS]

So many people seem afraid of refinance fees. IF you can drop your interest rate by a percent or more and plan to stay in the house for more than two years most times you will recoup the refinance fees in interest savings in less than two years. For many it is well worth refinancing...and not just throwing extra at your 30 yr loan. Look up 15 yr loan rates, how much will you drop your interest rate? If it is one percent or more drop do the math you should probably refinance.

[@samuelandraws7136]

I am just not following the math here, to be exact, on time stamp 1:05, how you came up with the $1,670 saving for every 1% of interest savings, knowing that the closing cost for the refinance is $2,900 as per the caller at time stamp 0:57 ?

[@daniellestephen1363]

Samuel Andraws He went off of the caller’s outstanding mortgage balance to come up with $1670. $1,670 is 1% of the caller’s outstanding mortgage (167K). It’s a rule of thumb that you save 1% on interest for every point your interest rate is lowered. The closing cost had nothing to do with that calculation.

[@samuelandraws7136]

@@daniellestephen1363 Thank you for the explanation.

[@daniellestephen1363]

Samuel Andraws You’re welcome.

[@JenniferBeeston]

This is all I talk about all day long with clients. It is so important to refinance ONLY when it makes sense. So many shady lenders talking people into loans with low rates but such high fees it doesn’t make sense at all. Always do the math to make sure it makes sense. Don’t get sold!

[@LG123ABC]

Couldn't you just make extra payments on your existing mortgage directly to principal and avoid the closing costs? We've been throwing an extra $1000/month at our 30-year mortgage and it should pay off in 9 years according to the mortgage calculator.

[@DPAFLESHER]

I think with the combination of interest reduction and losing PMI, they come out ahead. If they were refinancing just to move from a 30 to 10 year with the same interest rate, I think your idea would make more sense, or if they were going to be able to pay it off in

[@jamericanrebel]

Lyle G I’ve been doing the same 😊. My payment is $1000 a month and I pay an extra $1000 towards my principal only.

[@oneeyedman99]

He's currently got an $1100/month payment and he's refinancing to $1800/month, so presumably he's got an extra $700/month to throw at it. Even taking that into account, though, he's still coming out way ahead in refinancing--even if he throws the extra $700/month at the existing mortgage he'd still get gravy on the biscuit after maybe a year and three months by refinancing, compared to something like a year and two if he didn't do that.

[@ChicagoTRS]

If you can drop your interest a percent by refinancing you would be far better off refinancing and might pay off in 8 years instead of 9 and save 10-20k in the process (even accounting for closing costs).

[@garymoore3446]

Great...

[@tammmy2170]

I have a question we have a mortgage of 47000 with 6.35 interest. We are paying an extra 60 dollars a month. Pay off is about 13 years. Does it make sense to refi

[@kebolaasere6486]

your interest rate is really high. definetely try and get it lower. right now you could probably cut it by half and save a ton of money

[@looneyyang1326]

Yes definitely refi. High interest rates is like throwing extra cash away.

[@dddhhh2548]

No. Just add an extra 60 or more per month and have it payed off even sooner. Refinance is typically only smart if you are less then 2 years into a 30 year mortgage. As the majority is interest in the first 10byears of a 30 year loan.

[@Andy-em8xt]

30 year mortgages can be good too. The $600 dollar difference in monthly payments could have been invested earning 10% a year. It just depends on the level of risk you can and are willing to take.

[@jeffreymurphy5302]

Eventually all of these gains will turn into losses. The only question is will you be able to leave the market at the right time?

[@revvictormejiasoria3541]

Over the past 10 years i did manage to beat the market by a nice factor with a little amount of risk. Cant wait to refinance for a 10yr loan. i always stuck in an efficient investing model with guidance of a licensed trader meghan paige villanueva and at the same time have full control over my capital without beating myself up about how to beat the market, God bless that lady

[@hermandavid6813]

@@revvictormejiasoria3541 I’ve got money lying around in my bank account. I always wanted to invest with an expert and at the same time have full control over my capital so I need a smart mentor to handle my portfolio. Does she trade for you?

[@revvictormejiasoria3541]

@@hermandavid6813 ​Profits come from proper trade execution. Meghan has been the only manager who has gotten it right with me. I copy her trades on my own trading account and at the end of the month I give her a percentage as agreed upon. all the info you need is on the internet when you search her.

[@beatrixmalavebustos792]

Hmm this is new, how can I reach out to her?

[@williamsbarrett4138]

This is incredible, I first heard about Meghan at a seminar a few months ago, and she just begun guiding me on my investment journey a few weeks ago. Outstanding Broker indeed! I didn’t even know people knew about her this much

[@RealHealthyGuidance]

Better call Saul

[@p9948]

I listened to your reasoning and it has the flaw that one can invest the difference in mortgage choices differently. It makes more sense to invest that cost savings of say $100 per month into an ETF such as PFF to capture the dividend rather than going with a 10-year mortgage to save on the monthly payment. Investing at 6% is better than saving an added half percent in rate. I would stay with the 30-year mortgage and just do a refi. Rates today are under 3%. And likely to go under 2.5% by year;s end. That is my opinion.

[@KrystalToddCPA]

I like the callers aggressive approach in taking the 10 year option. The quicker you can get out of debt is the faster you can grow your investments and net worth.

[@fookbia8875]

True. But, most people don't have the self control to do it. They tend to over spend. I make money of refis. Hope everyone does it every year.

[@KrystalToddCPA]

@@fookbia8875 Yeah I totally agree! It is very hard to remain disciplined when advertisements are basically in your dreams lol

[@PassportBrosBusinessClass]

A lot of people try to keep their mortgage just because of the tax deduction. Even when they could do a lump sum and pay it off.

[@fookbia8875]

Bigtruckseriesreview Motorsports so they say. After you pay off your mortgage, you can work less. The more you work, the more taxes you pay. Hmmmm. Food for thought. The more time you have for your family.

[@jcrowley1985]

If you have no prepayment penalty,. Just pay extra. This effectively lowers your interest rate and there's no refi fees

[@justinelliott4087]

This is incorrect information for anyone reading this later.

[@jcrowley1985]

@@michaelweyenberg6238 that's what I meant by"effectively"

[@justinelliott4087]

@@jcrowley1985 The problem with that reasoning is it does not reduce the interest paid by an equivalent amount as if you paid that same amount payment under a lower interest rate. Sure, don't refinance into the same interest rate just to get a shorter term - in that case pay more. But if you can get a better rate, assuming the cost of the refi doesn't outweigh it, then you can do better when you make that higher payment under the lower interest rate. But I understand your point completely. It's a good practice, just not he best.

[@germanshepard7842]

ya i pay extra each month toward the principle and my interest goes down each month on my home loan.

[@arcticrest8368]

Good to refinance if you get a lower rate!

[@asiafuhaamango7930]

Should you refinance your mortgage to combine a first mortgage and a HELOC.

[@mariegulley7909]

"Two point Nan Nan" 😂 "gravy on the biscuits" lol

[@GregActonCPA]

With rates as low as they are right now in 2021, refinancing is often worth it. Especially if you take your monthly savings and put it to the principal balance of your loan.

[@naana-scelyne6370]

Can someone recommend a good lender who can refinance my loan with 1099 income? My credit score is over 800. It looks lender have a hard time refinancing with 1099 customers

[@Ray-md9nr]

OK, OK. Why on Earth do you have to pay closing costs if you want to refinance the Mortgage? you are not selling the house, you are asking more money to the Bank.

[@fookbia8875]

Cause people have to get paid like me. Loan officers, processors, underwriter, appraisers, etc.

[@Ray-md9nr]

@@fookbia8875 ok First, why is not a flat rate? Second, why is not based on how much you are going to refinance? Third, your house was already appraised. (by the bank every year), and the bank can calculate the interest rate (as is not based on the price of the house) Fourth, is just a money grab.

[@Izael1701]

@@Ray-md9nr Most closing costs are a flat fee. Banks don't re-appraise every year. Banks only order appraisals for purchase/refinance transactions. Appraisals are only good, at most, usually, for 12 months.

[@fookbia8875]

Steve unless you get an appraisal waiver, it's typically 3 months. And if they go beyond that it still requires a 1004d update. I still get paid. Lol.

[@ChicagoTRS]

Someone has to pay for the 1000 pages of paperwork that goes along with a refi...and most times you are also changing lenders.

[@davidhodge8509]

If the caller is over 50, I agree with Dave’s advice. If he’s in his 20s or 30s he’ll have much more wealth in his later years by staying with a 30 year loan and investing the difference. 30 year olds have so much potential for insane compounding. Get as much money as possible into investments earning 10% ROI! The opportunity cost of putting extra money toward paying off a 3-4% mortgage is HUGE!

[@davidhodge8509]

Anne Day I agree. The problem is, Dave (who I love and agree with 90% of the time) makes it sound like paying off your mortgage is the best path for everyone to financial freedom, when in reality the quickest path is NOT paying off your mortgage and putting that money into quality investments. Most Ramsey followers follow his advice and don’t even realize the huge opportunity cost they are paying by doing so.

[@lockedandloadedsigns4424]

The advantage of paying off your house is if the market crashes, YOU STILL HAVE A HOUSE!

[@davidhodge8509]

LockedandLoaded Signs ?? You still have a house in a crash even if it’s not paid off.

[@mhaskins3769]

David Hodge not if you loose your job in a crash.

[@davidhodge8509]

M Haskins correct but in that case, you could lose your house anyway. Still owe property taxes, HOA dues, utilities and upkeep. Paying off your mortgage doesn’t make you immune to losing your home.

[@wolfofdubai]

Loans are so cheap now worldwide that yes it makes so much sense.

[@fookbia8875]

I'm an appraiser. Keep cashing out of your house so I can keep making my 200k a year salary. Thank you, come again. Buy the new car, and pay it off with a refi.

[@fookbia8875]

Csab lol. The ford gt500 car is only 90k. You need it.

[@rollingacresfarmstead206]

This could be me calling in 163k on mort dropping into a 15 and planning on putting 1500 extra a month goal is 5ish years and saving 40-50k in interest house is all thats left 30 years old

[@aguyandhiscomputer]

I'm 39 and my wife and I are doing the same thing right now. $172k going with a 15 yr.

[@clarifyingquestions]

Fantastic!!!

[@vicepresidentmikepence889]

All mortgages are bad. The only sensible way to pay for a house is cash

[@mph5896]

Not really, Dave doesn't necessarily "ding" people on a 15 year fixed mortgage.

[@drunclecookie216]

that's unrealistic for most people. only very wealth and/or retired people can afford to pay cash for a house

[@Corpsecreate]

you are crazy if you actually believe this

[@rreagan007]

You have to live somewhere. If you aren't paying a mortgage then you'd have to be paying rent anyway, so a mortgage makes sense. For most people, it would take many years to save up enough to buy with cash, and in the meantime real estate prices are likely rising while you rent.

[@Stillnapie]

True.. to a point. Just how are you going to save up $250,000 t0 $400,000 and pay rent while you are doing it?? Or are you from a wealthy family???

[@aolvaar8792]

In 2016, 3.75% @ 30 year, -1.8 points, that's $2K back on $111K loan

[@NeoAndersonReloaded]

I can refi with closing cost free. Will drop 1.5%. Are there any other fees?

[@topcomment3816]

NeoAndersonReloaded You’re asking US if there are other fees on YOUR loan?

[@christina6770]

There is no such thing. You are paying for it some how, maybe in points that they add to the mortgage.

[@CaseyBurnsInvesting]

Either way that’s not a lot of loan. Get it done and move on with your life.

[@ProSkillGuides]

If you can get in at a better rate. Make sure you’re going to be there long term.

[@fookbia8875]

Most people tend to refi every few years and will never pay their mortgages off. Good for me. Lol.

[@ProSkillGuides]

Fook Bia we need to educate people to buy less of a house

[@fookbia8875]

Alex Zim Finance i agree with you. I say it to all my clients. However, I need them to keep doing to so I can make a living. My house is almost paid off. Worth 850k now.

[@ProSkillGuides]

Fook Bia 😂😂 congrats on the house

[@ChicagoTRS]

If you are recouping the closing costs in less than two years...you do not have to be there very long term.

[@MAL-92]

Wow i needed to see this video! My mortage pretty much matches this guys numbers! Cant wait to refinance for a 10yr loan.

[@ProSkillGuides]

Marco Limon keep pushing congrats👍🏻

[@thomashernandez6536]

I was just shown your channel by a coworker. I'm interested to see your content.

[@ProSkillGuides]

Thomas Hernandez he keeps it very simple and easy to understand.

[@Platinum_Tugboat]

You really have hit a gold mine of information. A wide variety of calls from people seeking advice. Welcome

[@ProSkillGuides]

The Platinum Tugboat it’s amazing

[@JOMFSE]

Your coworker is a real one. I know lots of people that encourage others to waste money and are proud to do so

[@ProSkillGuides]

JOMFSE it’s hard not to fall into the “middle” class trap. The people in the middle class aren’t really wealthy. Look up to people that are in the upper class.

[@PassportBrosBusinessClass]

Refinancing your mortgage makes sense if you can reduce it 1-2%. Even $100 less per year is $1200 a year.

[@fookbia8875]

Also makes sense to buy that new Ford Raptor you wanted. Just do it. Buy it and you can always do a cash out refi go pay for the truck. It's like a free truck.

[@whatta7793]

Go with a 30 year, 3.25% with a payment of $727 a month (not including insurance/taxes), and invest the rest.

[@clarifyingquestions]

Debt free mgt free is the way to go!!!!!! Listen to Dave he is the multi millionaire and the one who shows his face daily!!!! Do not listen to trolls.

[@JakeNaughtFromStateFarm]

@@clarifyingquestions To be fair, there’s a lot of successful people that feel the same way. I saw a video of one guy that said he could pay off his house, but he made more investing. I wouldn’t go that route, but there are those that do.

[@cancel.lgbtq.6892]

The question is why wouldn't you if interest is lower?

[@KrystalToddCPA]

Yutube SuspendedMyAccount I think it would depend on closing fees and other fees. In the callers case it sounds like a no brainer but if the interest rates wasn’t as big of a difference maybe it wouldn’t be worth the effort.

[@fookbia8875]

Always refi when you can do it. Pay off other debt and roll it into the mortgage. Cash out whenever you can. Use your house as a cash cow.

[@dannywalker176]

Look at all the variables involved with the financing. I would lean toward building more equity in the house which would mean and earlier payoff or more money in my pocket if I ever sell. Owning real estate free and clear is the best thing you can ever do. Look as housing cost like a utility payment. What if you never had another power bill?

[@fookbia8875]

Lucas Levon or just take to the max. Fha cash out refi. You can have multiple co signers to qualify.

[@aguyandhiscomputer]

@@fookbia8875 you're an idiot and a bad loan officer or whatever you are.

[@coniccinoc]

Mr. Ramsey making positive change for those who will listen and act. Powerful stuff. This caller is on a path that leads to a better future.

[@ProSkillGuides]

Venture B. It’s very touching when you impacted someone’s life to help them get ahead.

[@dannywalker176]

Nothing was said about the number of years left on the original mortgage?

[@jaketalksfinance8034]

Man Dave Ramsey makes some amazing videos and he does some amazing things helping so many people with there finances Dave’s the man one of the people who got me into business at 12 and inspired me to start my finance channel

[@roolyfe]

I need financial help!

[@blackonblack...9244]

There's a Dave Ramsey Facebook Group page. Just post you problem and someone can give you some sounds advice that Dave would give.

[@ProSkillGuides]

Waweru N. Gatimu I’m here to help🤗

[@lionheart93]

@@blackonblack...9244 where?

[@brandonwagner1285]

First

[@ProSkillGuides]

Brandon Wagner second

[@cassandrasan144]

Say what???

[@fookbia8875]

Yes, refi every time you can do it.

[@realfaithlife2104]

Another gem 💎.