What rate difference is good for refinancing my existing loan?

Phoenix, Arizona
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What rate difference is good for refinancing my existing loan?

Ying Tang
Member since 2025 · 324 posts · 121 votes

Hello everyone! I’ve received a lot of helpful responses on my recent posts—thank you all for your time and support! I have another question today. My husband currently has a 30-year fixed $315K mortgage that was secured around November/December 2023 at a rate of 7.99%. With mortgage rates trending downward lately, should we refinance now to secure a lower rate, or would it be better to wait until autumn for a potential further drop? I found several online opinions suggesting that high refinancing costs might negate any monthly savings for a couple of years. Given that a rate cut is anticipated later this year, do you think refinancing is the right move? For reference, his credit score is over 810.

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Erik EstradaBusiness Member
Lender · Member since 2022 · 6k+ posts · 1k+ votes
1y
Quote from @Mason Weiss:

Yes you can still get all those covered right now in a refinance and bring your rate to the high 6's with $0 out of pocket. Just watched one of my client's do it today.


 How is the bank making their money? Do they service the loan? Are they requiring opening up a checking/savings account? 

Typically most lenders will sell their notes after closing and they make their money from the fees, and the back end when they sell it. There are portfolio lenders however that do make their money through servicing, and checking/savings accounts. 

Trying to wrap my head around this. Do you happen to have a Loan Estimate to share showing this is the case?

[email protected]818-269-7983
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  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 524 posts · 241 votes
    1y

    Hey Ying, I would do a no cost refinance. Pay nothing out of pocket and drop that rate to most likely the upper 6 range. I have encouraging many of my client's who purchased in 2022/2023 to do this right now. This way, if rates drop again you could refinance again in 6 months but for now lock in the lower rate that you can obtain. 

    Do you want me to message you directly about this option?

    [email protected]480-818-7745
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    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      1y
      Quote from @Mason Weiss:

      Hey Ying, I would do a no cost refinance. Pay nothing out of pocket and drop that rate to most likely the upper 6 range. I have encouraging many of my client's who purchased in 2022/2023 to do this right now. This way, if rates drop again you could refinance again in 6 months but for now lock in the lower rate that you can obtain. 

      Do you want me to message you directly about this option?


       I would be careful with your verbiage here as it is a public forum. 

      There is always closing costs on refinances. If the lender is not charging any fees, it is likely built into the rate. Additionally you should be mindful of title, escrow, appraisal, impounds, taxes and prepaid interest. I don't think it is worthwhile to refinance from a 7.99% loan to a high 6% loan, unless you are getting some cash out to payoff high credit card debt or use the money to buy another rental. I would hold on tight until market conditions improve. 

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
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    • Mason WeissBusiness Member
      Realtor · Phoenix, AZ · Member since 2021 · 524 posts · 241 votes
      1y
      Quote from @Erik Estrada:
      Quote from @Mason Weiss:

      Hey Ying, I would do a no cost refinance. Pay nothing out of pocket and drop that rate to most likely the upper 6 range. I have encouraging many of my client's who purchased in 2022/2023 to do this right now. This way, if rates drop again you could refinance again in 6 months but for now lock in the lower rate that you can obtain. 

      Do you want me to message you directly about this option?


       I would be careful with your verbiage here as it is a public forum. 

      There is always closing costs on refinances. If the lender is not charging any fees, it is likely built into the rate. Additionally you should be mindful of title, escrow, appraisal, impounds, taxes and prepaid interest. I don't think it is worthwhile to refinance from a 7.99% loan to a high 6% loan, unless you are getting some cash out to payoff high credit card debt or use the money to buy another rental. I would hold on tight until market conditions improve. 


      Yep the lender covers the fees and you still can drop your rate which means nothing out of pocket for the investor and you save every month. Sounds well worth it to me.

      [email protected]480-818-7745
      1Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      1y
      Quote from @Mason Weiss:
      Quote from @Erik Estrada:
      Quote from @Mason Weiss:

      Hey Ying, I would do a no cost refinance. Pay nothing out of pocket and drop that rate to most likely the upper 6 range. I have encouraging many of my client's who purchased in 2022/2023 to do this right now. This way, if rates drop again you could refinance again in 6 months but for now lock in the lower rate that you can obtain. 

      Do you want me to message you directly about this option?


       I would be careful with your verbiage here as it is a public forum. 

      There is always closing costs on refinances. If the lender is not charging any fees, it is likely built into the rate. Additionally you should be mindful of title, escrow, appraisal, impounds, taxes and prepaid interest. I don't think it is worthwhile to refinance from a 7.99% loan to a high 6% loan, unless you are getting some cash out to payoff high credit card debt or use the money to buy another rental. I would hold on tight until market conditions improve. 


      Yep the lender covers the fees and you still can drop your rate which means nothing out of pocket for the investor and you save every month. Sounds well worth it to me.


      They still have to pay taxes, insurance, and interest at closing. Along with appraisal and any credit report fees. So no, it is not "nothing out of pocket" to the investor. Title and escrow charge fees as well, unless the lender has their own title company and they are covering it with a higher rate. 

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
      WebsiteView Page
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  • Devin PetersonBusiness Member
    Lender · Sarasota, FL · Member since 2022 · 2k+ posts · 682 votes
    1y
    Quote from @Ying Tang:

    Hello everyone! I’ve received a lot of helpful responses on my recent posts—thank you all for your time and support! I have another question today. My husband currently has a 30-year fixed $315K mortgage that was secured around November/December 2023 at a rate of 7.99%. With mortgage rates trending downward lately, should we refinance now to secure a lower rate, or would it be better to wait until autumn for a potential further drop? I found several online opinions suggesting that high refinancing costs might negate any monthly savings for a couple of years. Given that a rate cut is anticipated later this year, do you think refinancing is the right move? For reference, his credit score is over 810.

    It’s really all depends on the loan, who you work with, closing costs, and what type of program.  typically to make it worth a while, I like to say at least $150-$200 a month and net savings is worth it for most people. If you can refinance and roll in all of your closing costs and not increase your pay off by that much, it may be worth it. Is this an investment property?
    [email protected]860-538-3672
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  • Joe Impagliazzo
    Real Estate Lender · Newport, RI · Member since 2014 · 182 posts · 33 votes
    1y

    Hi Ying find a lender like mine, CMG where we offer the ability to refinance as many times as you want every 6 months for the next 5 years and all the lender fees are waived as well as the appraisal paid for if needed 

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    • Ying Tang
      OP
      Member since 2025 · 324 posts · 121 votes
      1y

      @Joe Impagliazzo Hi Joe! Thanks for the comment. I got my two previous loans that way. However, the loans are quickly sold to another company, then another.. So refinance as many times as I want didn't work out :(

      0Reply
  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 524 posts · 241 votes
    1y

    Yes you can still get all those covered right now in a refinance and bring your rate to the high 6's with $0 out of pocket. Just watched one of my client's do it today.

    [email protected]480-818-7745
    0Reply
    • Erik EstradaBusiness Member
      Lender · Member since 2022 · 6k+ posts · 1k+ votes
      1y
      Quote from @Mason Weiss:

      Yes you can still get all those covered right now in a refinance and bring your rate to the high 6's with $0 out of pocket. Just watched one of my client's do it today.


       How is the bank making their money? Do they service the loan? Are they requiring opening up a checking/savings account? 

      Typically most lenders will sell their notes after closing and they make their money from the fees, and the back end when they sell it. There are portfolio lenders however that do make their money through servicing, and checking/savings accounts. 

      Trying to wrap my head around this. Do you happen to have a Loan Estimate to share showing this is the case?

      [email protected]818-269-7983
      LuxePrivate Investments LLC 572 Reviews
      WebsiteView Page
      1Reply
  • Stanley Parsley
    Investor · Chandler, AZ · Member since 2015 · 409 posts · 214 votes
    1y

    Greetings 

    how about we get together

    imnin San tan valley

    id be more than happy to sit and look at all the options

    0Reply
  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 524 posts · 241 votes
    1y

    They might service it, nothing required from the property owner though. They just save money.

    [email protected]480-818-7745
    0Reply
  • Ryan Maggard
    Lender · Cleveland Ohio · Member since 2025 · 42 posts · 1 vote
    1y

    I can help. Have options below 6%

    0Reply
  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    1y
    Quote from @Ying Tang:

    Hello everyone! I’ve received a lot of helpful responses on my recent posts—thank you all for your time and support! I have another question today. My husband currently has a 30-year fixed $315K mortgage that was secured around November/December 2023 at a rate of 7.99%. With mortgage rates trending downward lately, should we refinance now to secure a lower rate, or would it be better to wait until autumn for a potential further drop? I found several online opinions suggesting that high refinancing costs might negate any monthly savings for a couple of years. Given that a rate cut is anticipated later this year, do you think refinancing is the right move? For reference, his credit score is over 810.

    My bank will not refinance my into a lower rate unless the savings will pay for the refinance costs within 3 years. It tends to be paternalistic, but that’s a good rule of thumb.
    1Reply
  • Zach Wain
    Scottsdale, AZ · Member since 2019 · 435 posts · 248 votes
    1y

    @Ying Tang - 100% what Mason said.  A no closing cost refi is the preferred option for most scenarios.  If your closing costs are $0, if rates drop in a year then you refinance again without any worries.

    Everyone is different, some people love to save $100/mo and some people do not care about saving $300/mo.

    But, there are not many things in life that are deflationary.  Refinancing is one of them!  Dropping your payment is meaningful, especially if the costs are $0.  That is free money.  

    I think a no cost refi makes sense at 0.5% drop in rate!

    Or, you can keep the payment the same and shorten the loan term a couple of years and pay your mortgage off.  Again, free money, just structured differently.  

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