I have a 30 year fix rate mortgage on a primary residence with a HELOC. I see 15 year teaser rates all over the place "less than 2%..." Each place I call the rate always ends up being around 2.4+/- and I'm fine with that rate (I get it they have to tease). Thing is I don't find a single place with closing costs less than 3K and I'm not fine with 3K. Especially when my primary was $700 closing costs. Anyone have any recommendations on some low closing cost refi lenders (note I'm in Ohio).
When you refinance you have traditional costs that cannot be waived. Title fee's can be shopped for but you are going to have to finance other costs back into the loan.
1. Days of interest when you close to when the first payment is due.
2. Prepaids - If you escrow taxes and insurance they must hold and charge appropriate months for Tax/Insurance
3. Banks/Lenders all charge origination fee's like Underwriting/processing/credit report etc.
You just want to avoid paying points and I am sure you know but all fee's get financed into the loan there are no out of pocket fee's. Appraisal may or may not be required.
Credit Unions have some of lowest costs in most cases if you have perfect credit and low LTV. Typically the refinance should have a tangible benefit where you can calculate your burn rate. You should be able to recoup your closing costs within a 12-36 month period for best recovery. If your simply refinancing for a 15 year rate why not just pay more per month it reduce the rate and principal balance. It would depend on what your rate is now versus what your trying to refinance.
I have always heard that if the new rate is not 2 points lower, it is not worth it to refinance. As mentioned, why not just put $300 or $500 extra to your payment? Figure how much extra you would have to pay to get the loan to 15 years and then start making that payment. And no closing costs!! Remember that having the absolute lowest interest rate is not the most important thing in the world. If you are under 5% you are doing better than people have done in my lifetime. I have never seen mortgage rates so low as they are now.
I would vote for the credit unions also. They tend to be very low cost if you do end up refinancing.
You cant count your new escrows as closing cost as your old mortgage company will refund the escrow they have. This can be quite big amount and is probably what the difference is.