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  • Home Appraised Higher in Refinance Process

    Hi everyone,

    I am in the process of refinancing my physician mortgage with the goal of lowering monthly payments. Just found out the house appraised higher than expected. The original loan amount was for $248,000 at 4.5% in 2018. Today, the house is appraised for $310,000. Currently have 234,000 left in principal. The lender is offering a new rate of 3.25% on a loan amount of $241,000. Planning on staying in the home until 2024. Since the value of the home went up more than expected, do I have any leverage in lowering the interest rate even further? In addition, does it make sense to now do a cash-out refinance and use the extra cash to pay off student loans at higher interest rates? Appreciate any feedback, opinions. Thank you!

  • #2
    Bumping.

    Note that interest on a cash-out refi used for anything other than qualified purposes (for primary/secondary residence purchase/improvement) is not deductible.

    Wouldn't hurt to ask if you have more leverage, right? What are refi costs? If you're staying there only 3 yrs max, be sure the costs make sense. I like Zillow's refi calculator for a quick calc.
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      I guess I don’t know what current student loan rates are but can you not refinance your student loans to a comparable or even better rate?

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      • #4
        i would say 3.25% rate is still on the higher end in today`s rate. I would shop around more get under 3% with no cost option. You don't have to stick with your current lender. Also ask them to see if they can waive the appraisal.

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        • #5
          Get an ARM 5/1 if you have a hard end date of 2024. That will help the interest rate.

          I calculate you have 15% equity, so still a physician mortgage I assume? That will increase the rate so take that into account when shopping around or making comparisons.

          Agree with no-cost options for short term refi's. Agree with asking them to waive appraisal; I submitted my refi last week and they waived it.

          As I've said on other threads, I saved a 5 digit number in closing costs alone AND got a better rate using a company found through Costco's program. Shop around.

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          • #6
            Originally posted by jfoxcpacfp View Post
            Bumping.

            Note that interest on a cash-out refi used for anything other than qualified purposes (for primary/secondary residence purchase/improvement) is not deductible.

            Wouldn't hurt to ask if you have more leverage, right? What are refi costs? If you're staying there only 3 yrs max, be sure the costs make sense. I like Zillow's refi calculator for a quick calc.
            Thanks for the response! Based on the calculators, the refi cost estimates to about 6,000. I'll definitely be sure to ask!

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            • #7
              Originally posted by CordMcNally View Post
              I guess I don’t know what current student loan rates are but can you not refinance your student loans to a comparable or even better rate?
              Thanks for your response. Didn't think of that. Will be sure to look into refinance options as well. Thanks!

              Comment


              • #8
                Originally posted by justlearning View Post
                i would say 3.25% rate is still on the higher end in today`s rate. I would shop around more get under 3% with no cost option. You don't have to stick with your current lender. Also ask them to see if they can waive the appraisal.
                Thanks for your advice. I will definitely shop around and ask about waiving. Thank you!

                Comment


                • #9
                  Originally posted by pysibal View Post
                  Get an ARM 5/1 if you have a hard end date of 2024. That will help the interest rate.

                  I calculate you have 15% equity, so still a physician mortgage I assume? That will increase the rate so take that into account when shopping around or making comparisons.

                  Agree with no-cost options for short term refi's. Agree with asking them to waive appraisal; I submitted my refi last week and they waived it.

                  As I've said on other threads, I saved a 5 digit number in closing costs alone AND got a better rate using a company found through Costco's program. Shop around.
                  Thanks for your response. Definitely will shop around and ask for the waived appraisal fee. Thank you!

                  Comment

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