Should I Refinance My Mortgage | 1% Mortgage Refinance Rule
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- Опубликовано: 6 ноя 2020
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When Does It Make Sense To Refinance Your Mortgage | 1% Mortgage Refinance Rule
0:28 - Refinancing your mortgage can be a great way to save money but when is refinancing profitable
1:12 - When does it make sense for you to refinance your home
1:44 - Calculate when refinancing is profitable
3:18 - Ho much does it cost to refinance your home
8:20 - How to save money on your mortgage refinance using a simple refinance calculation
11:20 - Why you should use a mortgage refinance tool
12:34 - How the mortgage refinance prices works
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This Video: • Should I Refinance My ...
Channel: / minoritymindset
Video host: Jaspreet Singh
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DISCLAIMER CONT'D: I'm just a random guy on RUclips so do your own research! Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but is he is not providing you with legal advice in these videos. This video, the topics discussed, and ideas presented are Jaspreet's opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.
Thank you for watching! If you enjoyed this video, you should watch - Why You Should NOT Wait To Refinance Your Mortgage: ruclips.net/video/jHqBtKeCjtw/видео.html
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I like when you say in the description BELOW! Thank you for the video
Dude you awesome. This is what I was looking for. Subscribed.
7:21 "because the value of our dollars get diluted" Great, simple, and to the point, way to explain inflation.
Awesome video brother. Love your content!
Much needed info, thank you
This is a great video thank you!
Awesome video. Exactly info I was looking for.
Yess! I love this video. Thank you
Great job explaining!
Amazing explanation! Thank you!
Never refinance unless you can drop down at least 2 percentage points AND you never add years of payment back onto the loan. If you have 18 years left, refinance for a 15 year loan. Advice I received from very wise parents.
What about opportunity cost?
Your parents were smart! I would enjoy being debt free. Risk free and then invest/risk money not my home
That's what I did. A refi from 30 to 15 years (9 years in).
@@Gameljc Agree on opportunity cost. Refinance to increase cashflow and invest that @ 10% rate compounded. Net worth wise you should be better off if you extend that debt then if you paid it off early.
Obviously your very wise parents didn't know that the longer payback period may be the better choice, depending on what you do with the money.
Who else has started reading comments after 5 minutes of watching the video
Great information! Thank you!
One important thing that people should keep in mind that banks bank on the statistical fact that though many people begin with 30 Year Mortgage or 30 Year Re-finance but a large percentage of them never complete the 30 year time. Several life time events causes people to sell their house or pay off the mortgage early and banks make all the money by the amortized loan as for initial 7 years or so, it is mostly repayment of the interest and very little principal. That is why banks promote and lure customers in to refinancing without telling the truth that the outstanding principal even after year of paying the loan would stand near the original loan amount.
Great information! I just went through the refinancing process but I wish I would have watched your video before in order to get a clearer picture of the cost analysis
good stuff man
We just refied from a 30 year with 26 years left at 6.5% to a 15 year at 2.65%. Payment went up $50 a month lol.
now thats a come up.... 6.5 they was killing you bro
Same situation here but I refi'd when rates were 3.25. Thinking about doing another refi as rates are around 2.28 right now for 15 year fixed.
@@DryUrEyesM8 Same boat here. What did you end up doing?
@@TG-vk5uy Didn't refi. Might use owner occupy for investment property.
30 year with 22 left at 4% to 15 year at at 1.875 ... Just closed last week. Payment up 100$
I am going from 4% to 2.375% and going from 27 years left on my mortgage, and now going to be 15 years.... paymest was 923, going to be 1060. I think paying 150 more a month to go to a 15 year loan!
FHA? Or conventional?
Great videos we need more
I waited throughout the pandemic and paid off all my debt to ensure i refinanced with the highest score in order to get the best rate. I currently have a 4.49%. The bank offered 2.99%. Which I still believe is high. My closing costs are $3,500. I’m set to save $300+ a month. I decided to go for it.
I’m in the middle of a refi from 4.185% down to 2.25%. Monthly savings will be $280.00. Lifetime savings $101,000.00. Cost to refi estimated at $4,900 but will drop due to being a disabled vet I get out of some fees. I called to get started at the end of September and will close in December 16, 2020. Recoup time is 21 months. The day I locked in the rate was 2.64% but having excellent credit allowed me to buy down to 2.25% which is included in the $4,900 estimate. PennyMac holds my loan and I’m staying with them for the refi. I owe 23 years on the loan. I will pay more than the new monthly payment to kill the loan faster knowing I’ll be saving a lot on the back end.
Keep hustling
After 5 years, I'd expect that you would fix that crooked chimney.
🤣🤣🤣🤣🤣🤣🤣🤣
Great video Jaspreet! I just locked in a refinance at 2.25%!
Bravo!!! Love it!!!👏👏👏👏👏👏
Great video !! Jazz is the bomb 💣 👍🏼🙌🏼
Great Video! You get a sub!
Great explanation
Good morning Jaspreet could you make a video on mortgage recasting would love to see your break down
Great video
Solid stuff! I bought a house 11 months ago at 4.375%. refinanced back in August to 3.25% and I put the difference towards the principal
YES! I needed this video right now.
That was extremely helpful, thank you
Excellent video!
Why would you assume that I am interested in crypto? Ruined it for me. Bye bye to your channel. Punjabi pra naal sales tactic 🥺
Thank you for breaking it down!
Can you do a video on the break down of fees and taxes for a refinance?
saw your youtube commercial with the watermelon I liked it.
I was thinking about this at 4 am,telepathy is real .Great information.
Another great information! I need to add this in my next vids.
8:10 considering inflation and present value of things is important to making intelligent financial decisions... but it's also not easy to understand, but once you do it's hard to not consider
Hi Jaspreet! Could you go over refinancing and getting cash out on a mortgage?
The amount of effort you put in this video is everything, thank you Jaspreet!
Any suggestions for mortgage comparison tool in Washington state?
My wife (girlfriend at the time) bought our house in 2015 and started paying an extra $200 a month on the mortgage in 2017. We hope to have it paid off in about 10 more years when we are 40-41. I thought about refinancing but our interest rate is 3.125%.
Well... At least my 2nd re-fi
ill actually kno what im doing....
Thks as usual
But i still superr benefited
Definitely worth it!!
just make sure if you refinance not to add years to the mortgage for the sake of a lower payment
The journey to home ownership may be long and hard but will be worth when done correctly. Who else agree with me?
I bought our home 3 yrs ago and have balance of 175k right now with 3.8% for 30yrs.
I think i can pay this off in 2 yrs so i refuse to refinance just to bend over to the scum bag Wells Fargo.
There is no true home ownership in America as the property taxes never end.
I don't know. I think it's worth it if you buy at least a duplex or 3 or 4 units. Buying a single family home isn't a very good investment. People fail to consider the cost of repairs, maintenance, taxes, insurance and the inevitable upgrades to their home and all the extra stuff they'll buy to fill the extra space they now have. If you buy a multi-unit property, you can rent out the other unit(s) and pay some or all of your mortgage and then it can definitely be a good investment.
nothing like one your videos to start my Saturday!
Good video - 2 things missing: 1) How much longer do they “Plan” on living in the home? 2) assuming they plan on staying in the home the full term.
What did they do or recommend with the $97 per month? LOL - as I’m typing you answered the question by paying the additional $97 toward the payment. Why not just put the loan on 25yrs? Still that’s assuming they keep the home for 30yrs. Great video - good clean answers and delivery. 👍
Can you make a video for student loan refinancing with the same concept and similar examples? Thanks
Awesome explanation. Never seen it explained this simple. Enjoy all your posts and this by far is my favorite. If you are new to the channel subscribe tons of valuable information.
I just filled out a refinance application with one of my banks, looking to drop into a 15 year fixed and pay extra principal; if all goes steady, the house will be paid off in less than 13years. Paying extra principal won’t affect my other monies for investing. If you are on the fence, run amortization schedules. Jaspreet, keep up the good work!!!
@MinorityMidset , are there any pros or cons to refinancing with equity vs cash? Who benefits? Who loses?
I am curious as to how a typical refi would compare to a standard accelerated mortgage payment plan where you would make the equivalent of 13 vs 12 annual payments broken up into 26 payments. Essentially sending a check for half your current monthly mortgage payment every two weeks. The set up fees used to be between $200-400 and the payoff to the bank would be 21 years and 9 months rather than 30 years. Maybe this formula is more relevant when interest rates were higher.
Does the 1% change depending on how much your loan is or is that usually a good rule of thumb regardless of the loan amount?
((Current rate - new rate)/100) x principal to refi. This is the interest saved per year. Then take closing costs divided by answer above to get payback. So ((3.625-2.5)/100)x150000=1687.5. Closing costs are 4000. So 4000/1687.5=2.37 year payback on the 4000 cost.
Wow , that's a really detailed explanation. Thanks juspret
Preach the knowledge!
But what is the real future value of that $4000 if invested in an index considering the average return of such funds over the decades?
If you plan to pay off your home early sometimes the fees incurred aren’t worth it.
Make sure there is no prepayment penalty
Hey would you do a finance video for veterans about the pros and cons of the VA loan? Like is it worth it if you're planning to put 20% down anyways? What would you say are the major benefits?
P.S. I love your channel and I absolutely smash the like button. I've learned so much from watching your channel already thank you 🙏
In your opinion, who are the best companies to refinance a VA loans.
Is there a way to refinance or to save on a home equity loan or what is called a personal credit line?
Nice video. 8:57 Would it be better(net worth wise) to put the $97 extra cash flow to a 10% investment that can compound? Increase that cash flow like 4% a year and keep on compounding.
A 15y fix for 1.99% sounds really good these days
How would you compare just paying extra on your current mortgage. Like when you pay off your car, you just send that toward principle? No closing costs, fees, or extended years. I'm on my 3rd refi in 20yrs and feeling amortization table phobia. It's like I'm paying for my home 3 times!
Okay I'll smash that like button just because you asked. It seriously works if you ask. Idk why. Lol
I would wait til 2021 to do anything with a home. Here in Portland Oregon, places are only now starting too get on the market that the average person can afford. Wages won’t be going up for about 5 years so live within your means more then ever now. Peace and love.
The bank wants to keep you at the front of that front loaded interest !
that’s what I am saying!!! why does no one address this? Refinance means you are starting that amortization table all over again. :(
@@Elena-er7zp you should calculate opportunity cost. How much you pay in interest isn't the whole picture.
@@Elena-er7zp as long as you’re not doing a cash out refinance amortization schedule doesn’t matter. You’re still saving money.
It is the closing costs that kills a refinance
So does it make sense to double payments for the first half of the loan and then make the minimum payment during the second half?
Do these rules apply to a cash out refinance as well?
*So interesting you did this video because Lindsey and I were JUST talking about this last night. Rates hit another record low. 12th time this year!*
Refinanced from 4 to 2.7 for 29 years removed my PMI bought in 2017 . Payment is down $550 over all. Paid 4000 closing cost but got the refund form escrow around same amount and some added to the loan. I choose to pay additional principal so i can pay off early. Main point was to decrease my liability .
@Minority Mindset thank you
How do you know how much equity you can pull out
Paying closing costs. Do u have times jave tompay it or do they waive it
What about if you refinance with what you have left to pay and move from 30 yr loan to 15 yr loan.
Do you do any private consulting?
Also important factor that I didn’t hear Jaspreet mention - you should not refinance if you will be selling your home before your payback period is past
I understand the concept of paying additional principal to reduce the overall amount paid in principal + interest over the course of loan, but if you are borrowing at a low enough rate, isn't it just advantageous to get/keep a loan as long as possible? If i had a mortgage at 3% and I can even deduct my interest off my taxes making my effective rate something like 2.x%, shouldn't i just pay the mortgage minimum and use my extra money to invest else where?
Do you have to take money when you refinance or can I just get a lower payment and not remove any equity? Will I still be charged the same fees if I do or don't? Thank you for the help
Excellent point. The key to refinancing is lower payment. Lower payment gives you more financial security on a long run. You have higher loss of income threshold while staying in your house. If there is ever a 50 years mortgage, I'll be the first one to get it. This works if you planning to stay in your home for over 7 years though.
And how does this apply to personal loans?
Thank you, you explained that very clearly. I'm about 3 yrs into my Mort. at 4.5%. I can refi for 4%, and I wasn't sure if it was worth it. I'll hold out until they can do better
I held out, and now I'm getting 3%
@@zulikkowalski3547 im in the same situation too. Should I wait out now tho?
Thanks for this! I think the concept most people don’t understand is refinancing is just a new home loan with the current balance. They go with a new 30 year loan so it’s essentially like having a 35 year loan or so and they have just extended the length of time of the mortgage with a better rate, mail ya wash.
That’s why I really like your keep paying the original monthly mortgage cost and pay it off earlier saving lots!
Other option would be to refinance to a 20 year as the term of the loan being shorter gets a better rate so let’s say 3.75% for a 20 year and 3.5% for a 15 year.
20 year would be $545 a month
Refin 2025 paid off in 2045
15 year would be $658 a month
Refin 2025 paid off in 2040
I understand investing over paying down the mortgage but a lot of people would benefit by slightly increasing their payments as they either was the extra on the lower monthly mortgage or put it into a savings account making 0.0000002%
People would benefit more by investing the difference. Why would you pay mortgage earl, that has let's say 4% interest if you can invest the money safely at 7% in the stock market. Never pay off our mortgage early!
@@Gameljc totally agree investing will beat paying down the mortgage, but my last statement most people won’t do the right thing with a lower monthly mortgage. Look how much consumer discretionary items were purchased with the last stimulus. If you didn’t need the stimulus for food on the table investing it in a depressed market like March and April would have paid big time! Instead people bought a new big screen tv and furniture. 🤦♂️
@@doctorhorton I agree that most people wouldn't stick to investing the difference :)
Very valid points, it depends where you are in your loan and your life. I did a refi on my first buy and after 5 years I basically added 5 years to my loan at the same value for a better rate. I wish I would have known more and looked more at the bigger picture, but I also bought at a bad time which hurt as well.
Real estate investment is one of the biggest investment in the world right now, most people make huge profit from real estate market but it's not profitable for me me.☹️
Same it was not profitable for me though it was lucrative at first.
Over the years I came to realize that 70% of millionaires today are investors.
@Jason Brian until you understand the rule of money you can never be rich, investors understands rule of money.
@@staffsergeant8749 how can you help me?
@@masonwilliam8921 understanding rule of money is knowing when to invest, what to invest and how to invest.
Great video but i wonder why nobody mentions the 5 years of interest you pay that went down the toilet when you refinance for another 30 year
I am refinancing right now. I went from a 30 year to a 15 year and my payment still went down. My old loan i was paying 185k in interest. My new loan i am paying 42k over 15 years. Shaved 70 per month and 13 years of my mortgage and saved 143k. Incredible!!!
Who is your lender?
I like to smash the like button after watching the video. However i did smash it when you said it 😁
We are considering refinancing. We have been waiting to see how much lower rates are going to be. I think now is the time though. Great video!!
@Minority Mindset LoL nice try.
I think you just have to see if the math works for you. Many of these people talk absolutes, but they don't know your particular life circumstances. What may be a true generally may not fit what is happening or growing in your life. So if you refinance and you use your savings to pay off high interest loans (without making new ones) and then put your money to work by investments, paying off principle, or other means then it can be good. The best 30 year rate I have seen is 2.25, but the stock market (over the long term) is around 10. Maybe investing in a 10% return for 10 years would be a better use of your money than paying off the 2.25. Just see what works for you.
Did you even watch the whole video?
I think making money is a language everyone understands. It's either you're buying or selling something but making money is Paramount. For me it's trading the stock market. I trade the stock market as often as I can and have made quite a lot doing so. 💰
Lol.. Money is indeed a universal language, and one I'd love to speak because I'm Soo close to paying off the mortgage on my dad's house..
Hey?.. pls I'm interested in you're comment on the stock market, I started trading over the Lockdown and I've blown up several accounts in my attempts to trade myself, but I'm still hopeful, How did you make your money?
Truth is there is no easy way up. I learned that after losing a ton of cash to trading carelessly and with inexperience. But after much research I settled for the guidance of an expert and I've been recording massive success since.
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I did a refi, but I jumped from 30 years to 20 years. Paying a little more a month but going to save roughly 80k in the long run.
credible loan is not in my state utah
I need your help if I should refinance..I’m confused
What do you think of buying land and putting a manufactured home will not that be a lot cheaper than a stick built home
I thought he was going to show me how to avoid paying those closing cost fees Again! 😊 But the higher your credit score the more you save in fees!
Look at statements take principal divide it half
Next pay normal payment plus the half the principal
Next pay another half of half principal bi weekly
You now mortgage is cut in half Also pay your escrow insurance in full if you can.
We refi with cash out recently . there was a 2% drop . so a monthly 200$ saving unfortunately for an extra 10 yrs over original loan . The extra money is going into Repairs to foundation & high interest outstanding bills . with extra 200$ savings we shorten the total time by 10 years saving 10K$.
Is the 537& monthly & the 440$ monthly including insurance & taxes?