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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 128403  
Subject: Re: Amerisave appraisal rejection Date: 1/24/2013 7:16 PM
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they haven't gotten back to us, but based on their front page calculator, instead of 3.375% it will be 4%. That's a saving of just under $50 a month. We are at 4.5% now.

Are you focusing on the change in the monthly payment, instead of on the actual savings in interest? Because on a $300k loan, a 0.5% interest rate change would save you $125 in the first month. It would drop a little each month, as the principal balance decreased, but it's a lot more than $50.

Changes in your monthly payment are not 'savings' - they are improvements to your cash flow, but the only 'savings' you get from refinancing a mortgage is the decrease in the amount of interest you will pay.

When we first went to Amerisave we thought we would be doing HARP, but rates were quoted as 3.75 then. A quarter point higher puts us in "not worth it" territory.

Especially if you went to them expecting to do a HARP refi, and they didn't sign you up for that right away, I would push them to give you the rates that were posted when you first approached them.

In looking at their website, it looks like the HARP rates drop substantially for a 20 year loan vs. a 30 year and 25 year loans, so you might want to look at that, too.

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