Another Mortgage Refinance

We are re-financing our mortgage again.  In 2010 we refinanced to an adjustable rate mortgage at 3.875% for 7 years with a 30 year amortization. Recently I began investigating improving this because market rates continued to fall. This investigation has paid off so we are now going through another refinancing.

I had read some favorable news about Costco’s mortgage services programs. I decided to start there and use the offers received to comparison shop at our local bank. I filled out the basic information online and withing 24 hours I received a call from one of Costco’s mortgage providers. He was very polite, knowledgeable and efficient in providing the needed information for different mortgage products. I received a very attractive offer on a 7/1 ARM.

I sent the Costco offer to our local banker, telling him that I liked the offer but would prefer to do business locally if he could get close on the terms.

He did.

This is what he offered: A 7/1 ARM starting at 2.625%, amortized over 30 years, with no points. Total estimated lender fees and closing costs are $2882, excluding escrow prepaid items (which are a wash anyway). The sweetener is that the lender is also paying $2300 towards the closing costs which means that our out of pocket costs will be less than $600. Our monthly payment (P&I) will decrease by $93.00, so that our cash outlay break-even point on the re-fi is only 6 months out.

We still plan on selling this house before the initial rate expires so this offer was easy to accept.

All this being said, I would still like to see interest rates on bank deposits increase for the benefit of savers everywhere.

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