David Wright is the Sr. Vice President, Residential Mortgage Lending Group at the Sanibel Captiva Community Bank

30 Year Fixed Rate Mortgage – 4.375%

by David A. Wright, Sr. Vice President, Sanibel Captiva Community Bank

Not only a catchy headline 30 year fixed rate mortgages really are priced that low for qualified borrowers.  Everyone who has a mortgage should at least discuss refinancing their home.  Consider  numbers.  If you have a 30 year fixed rate mortgage of $225,000 priced at 5.625% (a fine rate) your monthly principle + interest payment is $1,295.23.  Refinance at today’s 4.375% and your payment falls to $1,123.39.  You enjoy a savings of $171.84 per month, over $2,000 per year.

But David I just refinanced last year can it make sense to refinance again already?  It is a simple matter of mathematics, if you recover the closing costs in 22 months or less I believe you should strongly consider refinancing.

Will I have to pay all those costs again?  I just paid for the title policy (or intangibles tax or document stamps or recording fee, insert your least favorite charge here).  Yes, you have to pay all the charges again.  You may however enjoy a reissue credit on your title policy and you should be able to use your existing survey so some savings are available.

Well how much are the closing costs on a refinance?  For my calculations I use a figure of 2%.  Not exact but a darn close estimator.
-    Incidentally purchase transactions should use 1.5% because a portion of the closing costs are paid by the seller in a purchase transaction

Do you really need my baby pictures for underwriting?  No not really but it almost feels that way.  Underwriters are very cautious when evaluating credit application in 2010, there are no small details, every facet of a credit file is important

Thanks for reading this and I hope to speak with you soon.

David A. Wright
Sr. Vice President, Residential Mortgage Lending Group
Sanibel Captiva Community Bank
2475 Library Way
Sanibel, FL  33957
Phone (239) 472-6100
Fax  (239) 333-2957
Cell  (239) 209-1059