With recent stock market turmoil and treasury yields going down I think it’s a great time to refinance my mortgage. The rule of thumb is that if your are lowering your rate by at least 1% then it’s worth it.
I bought my current house in Charlotte NC two years ago and paid for it $463,000. I saved like crazy and even dipped into my IRA to have enough money for 20% down payment so I don’t have to pay useless PMI. I think everybody if they can should try to save 20% for the mortgage to avoid PMI which is waste of money. As for dipping into my traditional IRA I only “borrowed” $10,000 from it and within 60 days I had enough money to put it back. The rule is that you have 60 days from the date that you receive IRA distribution to roll it back into the same or another traditional IRA. So back in 2017 I ended up taking $368,000 mortgage at 3.75% for 20 years. My lender was Bank of America.
Today I called BofA and asked if they would consider refinancing my 20 year mortgage into 15 year. I did my application over the phone and it took me only about 10 minutes to get pre-qualified. My remaining balance is about $342,500 and Bank of America made me two offers. One was 2.75% rate with 2.907% APR and the second offer was 3.00% with 3.052% APR.
Then I submitted online application with JP Morgan Chase. I have their credit card and it was easy to apply online since my mortgage application was automatically uploaded with my personal information from my online profile. I was expecting to get instant pre-approval but instead I received e-mail notification saying that they will call me with the details. They sure did and withing five minutes I received a call from Arizona. The strange part was that representative said that their system was down so he had to gather my basic information again. He wasn’t even able to pull my credit and I had to tell him what my credit score was. I have free credit score monitoring service with Bank of America so I new that my score is 796. Chase’s rate came in at 2.875% with 3.097% APR.
I didn’t lock my rate with neither bank since I think that upcoming weeks will continue to shock us with market swings and Treasury yields declining more. I’ll keep you posted on my refinancing journey.