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So I rate locked a refi

April 16th, 2021 at 03:18 am

So I rate locked a refi today with JPMC.  Did you know that I could qualify for a mortgage up to 43% of our gross income?  Yeah that's right. I think my mortgage is already too much for what we make and here we are totally being told that we could easily borrow way more than our current mortgage.  Um okay sure sounds like a plan.  No it really isn't.  

Currently we are at 2.875% for 30 year fixed with 26 years left.  Our payment is $3838/month + $1000 Property taxes/Insurance.  We are getting a 7/1 arm for 2% and our payment will be $3142 + $1000.  So we are saving about $700/month.  That will give us a bit of breathing room right now on our budget.  The actual numbers are our current loan is $2039/month interest and $1804 principal.  Our new mortgage is $1416 interest and $1725 Principal.  So we are saving $623 interest actually a month.  

Our closing costs are about $1500 out of pocket.  I'm unsure if it'll flex depending on when we close the loan. So a little more than 2.5 months of interest is our breakeven point. I think it'll be worth it.  

Posted in Mortgage | 4 Comments »

4 Responses to “So I rate locked a refi”

  1. disneysteve Says:
    April 17th, 2021 at 12:35 am 1618619733
    1618619733

    Sounds like a great deal. Rates will undoubtedly be higher in 7 years but you will have saved nearly $60,000 in the meantime. And at that point, you can refi again on a smaller balance which will help offset the higher rate at the time.

  2. rob62521 Says:
    April 18th, 2021 at 07:51 pm 1618775491
    1618775491

    It sounds like rates are going to go up, so good that you locked in a rate. I think most lenders are anxious to get as much money loaned out and often tell those applying they can do more, which is kind of scary considering that is part of what led to the recession in 2008...people getting loans they couldn't afford. Not everyone is as careful as you are.

  3. disneysteve Says:
    April 19th, 2021 at 12:42 am 1618792935
    1618792935

    "I think most lenders are anxious to get as much money loaned out and often tell those applying they can do more, which is kind of scary considering that is part of what led to the recession in 2008...people getting loans they couldn't afford."

    This is nothing new. When we bought our house in 1994, we got pre-approved for thousands more than we had determined we could comfortably afford. It would have been nuts for us to take the mortgage they were willing to give us.

  4. LivingAlmostLarge Says:
    April 19th, 2021 at 04:33 pm 1618849984
    1618849984

    It is way more then 3x income. I shudder at the thought. How people think this is a good deal i have no clue.

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