S2E15 – Refinancing 101 – Everything You Need To Know About Refinancing Your Home

Are you considering refinancing your current mortgage to pay off debt, lower your mortgage payment, get rid of PMI or just get better loan terms? When does it make sense to refinance? Should you refinance your current mortgage? Should you trade a lower interest rate for a higher interest rate? How much does it cost to refinance your mortgage? In this episode, we discuss everything about refinancing so you can decide if it makes sense for you as you become The Educated HomeBuyer.


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Connect with me 👇 Jeb Smith (huntington beach Realtor/orange county real estate) DRE 01407449 Coldwell Banker Realty ➡I N S T A G R A M ➳ https://www.instagram.com/jebsmith ➡Y O U T U B E ➳https://www.youtube.com/c/JebSmith
Connect with me 👇 Josh Lewis (Huntington Beach Certified Mortgage Expert) DRE 01209148 Buywise Mortgage M:714-916-5727 E: josh@buywisemortgage.com ➡I N S T A G R A M ➳ https://www.instagram.com/borrowsmartjosh ➡Y O U T U B E ➳https://www.youtube.com/c/buywiseborrowsmart

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For Show Notes, See Below 👇

[00:00:00] Jeb Smith, Huntington Beach Realtor: In today’s episode, we’re gonna spend some time and talk about refinancing. Now, some of you out there might be laughing, since 70% of homeowners have an interest rate below 4%, and nearly 90% have an interest rate below 5%. But every single week, Josh and I both have people reaching out to us asking the question of, should I refinance?

When does it make sense to refinance? So we wanted to spend some time today and give you an episode on refinancing one. When most people refinance, why they refinance? And more importantly, when does it actually make sense to refinance Josh? So let’s start off really simple. You know, I did a video about a year ago and it was called Refinancing 1 0 1.

And in that video, Josh, I didn’t explain what refinancing was. I just went into the topics that we’re gonna talk about today and I had people comment on my video go, how is this a refinancing 1 0 1 video? And you didn’t even explain what refinancing. I thought everybody knew what refinancing is, but let’s start the conversation there, Josh.

Very simple definition. What is refinancing? 

[00:01:05] Josh Lewis, California Mortgage Broker: It is replacing your current loan with new financing so you’re, financed with your current mortgage. A first mortgage, a first mortgage, and a HELOC, a first mortgage, and a second mortgage, and you are refinancing into a new loan. Most often that is one new loan.

Sometimes people will refinance with a new loan and a new heloc. So you have existing financing on your property. We’re talking about paying that off with new financing of some sort. 

[00:01:31] Jeb Smith, Huntington Beach Realtor: Got it. So makes perfect sense to me. But for a lot of people out there, obviously that’s gonna help explain what the definition is.

But Josh, more importantly, when do people actually consider refinancing? Why? Is this thought in their head even at a time when, again, a lot of people have a super low rate. What drives that, that idea of refinancing? 

[00:01:51] Josh Lewis, California Mortgage Broker: Let’s look at it. It changes over time. So, this video is really gonna be an evergreen video.

We’re talking about refinancing. Whether you watch this a year from now, five years from now, this should be applicable. But today we just got. Figures for the last week. The MBA puts out the application figures every Wednesday. Today’s Wednesday, and they told us that we are down 68% year over year in terms of refinance applications.

So far less people are refinancing than there were a year ago. And why and what are their motivations? So in the current market, I can tell you I have two situations. One’s probably the most common, a divorce, husband and wife splitting up. Wife is on title. Wife needs her money and needs to no longer be on title and no longer obligated on that loan.

That’s one of the big motivations, and that doesn’t necessarily need to be a divorce. It can be a partner. Jeb and I made an investment 10 years ago together, and I want my money and want out. Now. If Jeb wants to keep it, he needs to refinance. And buy me out. It could be an inheritance. I inherited, my father’s property in 2020 with my sister.

If my sister decides she no longer wants to be there, I would have to take out a loan or write a check from my bank account, more likely a [00:03:00] loan, to buy her out. So, buying people out that are obligated or have an equity interest in a property is a big one right now, especially divorces.

Over the long haul. Let’s go back. Jeb, post covid 2020 rates plummet. You know, Everyone pretty much has a rate in the four to 5% range, and rates overnight are somewhere near 3%. That makes almost everyone eligible. And at that point, what were people looking at doing? They wanted to improve their terms, which when we say terms, you could be shortening the length of the loan.

You could be lowering the monthly payment. You could go from an adjustable to a fixed rate. But really what were people doing when we had that giant refi boom from 2020, 21 and into early 2022 either shortening their term or more likely lowering their interest rate for a lower monthly payment.

[00:03:49] Jeb Smith, Huntington Beach Realtor: In addition to eliminating pmi, you know, we just did an episode on pmi. So if you, listen to that episode and you’re one of those people that have PMI and trying to get rid of it, refinancing is one of the options that allows you to do that. And that, that’s a lot of what’s happening today, Josh.

Right? People reaching out saying, you know, my property value’s gone up. I realize I have a super low rate. When does it make sense to do this? Does it make sense to do this? Should I take cash out? I mean, I actually wanna talk about cash out in some detail here. Should I take cash out, pay off this debt even though my interest rate’s gonna be higher.

Does that make sense? So before we talk about when it makes sense to do it, let’s talk about the idea of a cash out refinance, because. I would say that’s probably the most common refinance that’s happening today is, is people taking that cash off again to pay off debt, which you mentioned earlier to a partner, a spouse, someone, that maybe you owe money to because you know they want to sell the property.

But what are other cases where people pull cash out in a cash out refinance? 

[00:04:49] Josh Lewis, California Mortgage Broker: People will look at it for an investment. You know, have a client that we’re helping right now trying to buy an investment property, and last year she refinanced her investment property, pulled some of that equity that had rapidly appreciated in 20 21, 22, and has a down payment available now to enter back and buy her second investment property, her third property.

Sometimes it’s not that type of investment. I’ve had clients say, Hey, I can buy into a business. I can buy a franchise, and my home equity is my biggest asset. I don’t wanna liquidate all of my cash in the bank. I would rather pull. From the house. So the biggest difference where this becomes, it’s not market driven in saying, Hey, there’s an opportunity in interest rates being lower.

There’s an opportunity in my value being higher where I can get rid of mortgage insurance or maybe pull some of my equity at similar terms to where I’m at right now. This is, I just need. The equity out of my home for an opportunity of some sort, and probably the most common one is the opportunity of lowering my overall debt service.

So if I have a hundred thousand dollars worth of debt and I have $500,000 of equity in my home, I’m probably better off paying that off. And again, how does a refinance work in that situation? Let’s [00:06:00] say you have someone that bought a home for $250,000. It’s gone up to $600,000 in the 10 years that they’ve owned it, and they have accrued, you know, a hundred thousand dollars of consumer debt.

Maybe they put a kid through school, other things that required borrowing. They had some medical expenses, they came on, so now they’ve paid that mortgage down to about 200, but we can get a hundred thousand dollars. Eliminate all of the debt and the rate may be higher on their mortgage, but the interest rate on all of the debt, all 300,000 of it is likely to be lower.

Credit cards are really, really high today with all the fed hikes. Jeb, I saw an article the other day. I believe 20% is the average rate on a credit card right now. So someone who a couple years ago had three 4% interest rates, 8% interest rates on their consumer debt. That’s doubled. And so when you’re looking at that, I have a client right?

That she has a 3.875% interest rate. She’s got $800,000 of equity in the home and about a hundred thousand dollars of consumer debt. Tho those are the clients where it’s really making sense in the current market. They have a good rate on their first mortgage, but it’s relatively small. They have a lot of equity and they have a relatively high amount of consumer debt at higher interest rates.

So when we’re helping a consumer decide, does it make sense to do this, we wanna look at the blended. So yes, you have a 3.5 on your first mortgage, but then on these five debts that add up to a hundred thousand dollars, they average 12 and a half. So our blended rate is really somewhere around seven or 8%.

If we can get you a five and a half or a 6% rate, not only is it gonna significantly lower your interest. It’s massively gonna lower your monthly payments. So it’s really looking holistically at the whole situation and saying what makes sense, you know, without confusing the issue for today, Jeb, another option if you have an amazing interest rate, let’s say in that situation, instead of owing $200,000 on the first mortgage, someone knows $500,000 and that rate’s 2.75%. 

Well, we may then look at a second mortgage to just pay off the consumer debt. So there’s not a right answer and it is important that you’re not just calling up someone off the commercial, the kid in the call center whose answer is always, yes, you need to refi. We need to do this today. I can save you this much money. 

It’s look at all of your options and determine which, if any, make the most sense for today. In terms of improving your interest rates, improving your monthly payments, but also what is the long-term impact of refinancing and readjusting that debt and resetting the term of when it will finally be paid off.

[00:08:25] Jeb Smith, Huntington Beach Realtor: Now, you said something a moment ago. Now you’re you’re the financial expert on the liability side of someone’s balance sheet, if you will. But you mentioned somebody looking at their blended rate. I think for the majority of people out there, that’s very difficult to consider. A lot of people probably don’t even know what their rate is on a lot of these credit cards.

With that said, Josh, is it easier to just look at what you’re paying now on your mortgage? What you’re going to be paying by taking that cash out and seeing if they’re savings by paying off the debt. So, for example, if your mortgage payment’s gonna go up $500 by refinancing and pulling this cash out, but you’re [00:09:00] paying off $800 of month in minimum monthly payments. You’re in theory saving $300.

So without even having to look at, say, what the blended rate is. Really easy to just look down and say, Hey, I’m saving money by doing this. And I realize that’s not always the right answer because there’s other things that you have to consider in this process, and those are some things that I wanna talk about now.

So we’ve talked about. The idea of refinancing, some examples of it and when it may make sense, right? You’re paying off debt, you’re saving some money in that circumstance. But what about timeframe? Should people throw timeframe in there? How long I’m gonna be in the property? Uh, things like that when they’re considering refinancing.

[00:09:40] Josh Lewis, California Mortgage Broker: Let’s finish your thought. It is not as simple as saying, Hey, if I do this, I lower my monthly payments $500 a month, so I am saving money. You’re absolutely increasing your cash flow. You are not necessarily saving money. Let’s use an extreme example. My first thought was to use an auto loan. You could have an auto loan at 4%, but because it’s a 36 month, 48 month, 60 month loan, you can have a very high payment.

If we roll that out over 30 years into a new refinance, it’s gonna lower your payment significantly. But you are going to end up paying more interest and more over those 30 years for that. So the extreme example, I get clients fairly regularly.

I’ve got one right now that went way over budget on a remodel. So he has two $20,000 consumer loans that are at like 14% interest and their six or seven year loans, they have monstrous payments. So in that situation, because we can significantly lower the interest rate and lower the payment, we can look at putting him into a situation.

So long way of saying you are correct, that you can go Easy button. What is my pain point? My pain point is I have too much cash flow outgoing every month and this can solve that problem by decreasing my minimum monthly payments. But you wanna look at the timeframe of what do I owe on all of this debt? Five years down the line, 10 years down the line, 15 years down the line if I’m doing this.

It doesn’t mean that we say, Hey, don’t pay these things off. It may be. Let’s pay them off, but let’s put you instead of into a new 30 year mortgage, a new 20 year mortgage. And the difference can be, instead of saving $950 a month, you save $450 a month, but it keeps you on track to be decreasing your debt load, increasing your equity, and increasing your overall wealth.

Over the long haul, Jeb, if we go back, you and I were both doing loans in that timeframe, 2003, 2004, 2005. We had clients that came back year after year, after year, took another 40 or 50,000 outta their house, another 40 or 50,000 outta their house, and many of them ended up without a house. But the ones that did still have their home, the home that they bought for $250,000, at the end of the day, they were owing $500,000 on it.

Five years later, they owed twice as much and had lost five years in. Our objective, our goal is to help you become a homeowner successfully [00:12:00] and arrive at a point near retirement where you’ve achieved freedom. The freedom can be, I’ve paid my mortgage off, or I’ve accumulated enough in 401k savings, other investments where I could.

Pay it off, or I have a plan that I’m going to move to a lower cost area. I can buy a home for cheaper and sort of harvest that debt or pay off whatever’s remaining of the debt. It is important to have that long-term time horizon because if you’re talking to a mortgage salesperson instead a mortgage financial advisor, they’re going to tell you no, this makes sense. And they’re gonna find ways to justify our refinance in the current market when it isn’t necessarily putting you in the best position over the long haul. 

[00:12:39] Jeb Smith, Huntington Beach Realtor: No, and that’s great information there. So anybody that’s listening out there, just again, make sure you’re working with a professional that understands that having that conversation.

I mean, I remember the last time we refinanced Josh on my personal residence. You know, we refinanced, we lowered the rate and we also went back into the same term that I had on the existing loan. Instead of taking me back to a 30 year fixed right, which would’ve saved me more money per month. I think we went back into like a 24 or 25 year loan at that time.

Which again keeps me on track to pay that mortgage off. Over time, the savings weren’t as great, but there were still savings and we’re continuing to get to that long-term goal, which is eventually not having a mortgage. So when you’re looking at this, Josh, there’s typically costs involved when refinancing and so, You know, I mentioned a moment ago, I mentioned timeframe.

So let’s talk about timeframe. Cost involved in refinancing, because some of these, some, sometimes paying off debt seems like it’s a good idea. It makes sense on paper. And then you start having the conversation with the homeowner, um, the person that is considering refinancing and they’re like, listen. In a year, two years, I’m gonna be out of this property for one reason or another.

Maybe I’m selling it, maybe you know I’m being relocated, whatever the reason is. So let’s talk about how timeframe impacts that, that thought process when you’re considering refinancing.

[00:14:00] Josh Lewis, California Mortgage Broker: You wanna look at your breakeven period for recouping the cost of the refinance. So it’s probably a good point Jeb, for us to talk about.

What does a refinance cost. We have an audience throughout the United States, and I believe Jeb, from looking at the analytics, about 1% of you are outside of the United States, so hopefully you own real estate in the US if you’re listening to us outside of the US. But in the 50 United States, those closing costs can vary a lot from area to area.

Some places have taxes on refinances. We have a little one here in California. It’s annoying, but it’s a $225 tax that our state government uses for their affordable housing initiatives, which have been horribly unsuccessful. But every time someone refis, they get $225 to continue failing at their, uh, their efforts of figuring out the affordable housing crisis.

So in general, you’re looking low end, probably $1,500 in cost. High end, depending on where you are in the country could be as high as four and $5,000, especially on larger loans. So an important [00:15:00] concept to think of is not the actual cost of the loan, but the net cost of the loan. And what do I mean by that?

You’ve all heard of a no-cost refinance. It doesn’t mean that the costs go away, the costs are there. They’re being offset by a credit from the lender. The lender doesn’t do this outta the kindness of their heart. The lender does it by saying, well, if you gimme a slightly higher interest rate over the 30 years of that loan, I’ll make more. So I’ll cover those costs for you. 

So the instance that you’re talking about, if someone tells me, Hey, I really need to improve my cash flow, but I’m gonna be outta here in 18 months, it would never make sense to have them pay those closing costs. We would take a slightly higher interest rate, slightly higher monthly.

And cover all of the costs for them. So it’s another part of that equation that you want to be looking at. What are my options? What does my interest rate look like if I pay all of my own costs and add them into my loan amount or write a check for it at closing? What does my interest rate monthly payment look like if I take a slightly higher interest rate and don’t pay?

Any of those costs and with that, now we can look at your time horizon. One year, three years, five years, 10 years. Because for the most part, there are a few clients, Jeb, on the real estate side. You talk to people that know, Hey, I’m gonna sell my house in 18 months because of X Life event that I know is coming.

Mm-hmm. For the most part, when we’re talking about loans and refinancing, People have a vague idea of what’s gonna happen 18, 24 months down the line, but they don’t have it set in stone. So we wanna lay out all the options, get all of your information of what you know your future to likely look like, and make the best decision at any given point in time after we’ve laid out all the facts.

You know, Jeb, I’d love to say numbers never lie. But if you don’t analyze all the numbers, if you don’t look at all the different options, you can’t truly make an educated decision of which option is best for you. 

[00:16:43] Jeb Smith, Huntington Beach Realtor: Got it. Great explanation there. Now I, in a moment, we’re going to go over a really easy way to figure out if refinancing is something you should even consider, right?

There’s a very easy math equation. But before we get to that, there’s a question I want to ask you about something you just said, and that is the cost involved. So, some lenders will offer a no-cost refinance. Some lenders Offer, uh, kind of a blended option. You know, paying some costs, some costs are covered.

You, we’ve done an episode where we went over the loan estimate, right? Trying to figure out how much you’re paying in these circumstances. Refinancing, I feel like is one of those areas that people can get taken advantage of really easily because the cost can be built into their loan. There’s just a lot of different things that people can overlook because.

They’re just, they just want the cash, they just want to lower the payment. There’s just certain things that they’re trying to accomplish, therefore, they get through the process very quickly. So As a professional, Josh, I don’t wanna take a lot of time on this because I think it could be an episode in and of itself, but if you’re considering refinancing, what should you focus on in that conversation just to make sure you’re making the right decision?

[00:17:52] Josh Lewis, California Mortgage Broker: So an interesting point. In the loan estimate episode, one of the things that you and I talked about is on a purchase, everything except for the interest rate [00:18:00] in box A is largely dictated by your location and the terms of the contract.

So when you’re shopping for a lender, you need to pay attention to box A on the loan estimate and the interest rate that you’re being offered. Box a. Any first party charges paid to the lender or broker, I don’t care what they call them, add them all up and call them points. And that’s the points you’re paying for any given interest rate.

A refinance changes that equation because I can’t force you to use an escrow or a title company, but I have preferred vendors that we work. Best with, and that I’ve negotiated rock bottom fees with. So I know you’re not gonna find any better numbers if you look around, but I regularly see people say, well, I got this loan estimate from the guy that did my purchase.

And you look and you’re like, it’s like 1500 thousand or 1500 thousand 15. That’s a lot of dollars. That’s a lot of money. You’re gonna go broke that way. There’s like $1,500 of excess fees in there because they just go to the, the same company that they use for their purchases and they don’t negotiate the escrow entitled fees down.

So it’s important to, to look. And to compare a couple of options. We talk about Jeb, I think the number is 78% of borrowers don’t shop around. They get loan from the first person they talk to. I kid, but I say if you talk to me, you don’t need to shop around. You don’t need to talk to anyone else. But in all honesty, what I can say is that if you don’t have one other point of reference, it’s sort of like marrying the first person you go out on a date with.

You have no point of reference. They could be the worst, they could be the best. You need to at least look at one other person and when you’re trying to make that decision obviously if you’re doing a rate and term refinance and you’re trying to improve your interest rate, rate and terms are important.

They’re not the only, or even the most important thing. You want to make sure, again, someone with the best interest rate, but the wrong structure on doing the refinance can do immeasurable harm to you on a refinance. So make sure that you have someone that can pencil out all of your options and show you the cost benefit today, tomorrow, and next year, so that you’re making the best decision for you.

[00:19:57] Jeb Smith, Huntington Beach Realtor: All right, before we hit that easy button on figuring out that calculation, one more question around cost, Josh. What should one expect to pay out of pocket to refinance? Should there be a cost involved? If I’m calling you to having the conversation, trying to figure out if it makes sense for me to do it, is there a cost and if so, or if not rather, and we start moving forward, what cost would be expected to be paid in that situation?

[00:20:20] Josh Lewis, California Mortgage Broker: Our best case scenario with a lower loan amount refinance, say $300,000, and say it’s a VA IRRRL or an FHA streamline, that does not require an appraisal. So we save that five or $600 is somewhere in the 15 to $1,700 range. And for us in California, your worst case should be about $3000. If it’s a really big loan, $3,500.

So let’s say a range of $1500 to $3,500. There are places in the country where you can add a thousand dollars to that easily. And it’s not a lender issue. It’s a locality issue in terms of how they tax those transactions and what you’re doing. So, , that range could legitimately be anywhere from $1500 to $5,000.

And as you [00:21:00] said, you can pay it out of pocket, you can write a check, you can pay it out of equity, have it added to your loan. Or you can pay it in the form of a higher interest rate and have the lender cover that for you. And hopefully the lender that you’re working with, the lenders that you’re shopping with can show you what all three of those options look like and the pros and cons of each.

[00:21:16] Jeb Smith, Huntington Beach Realtor: You actually took it one step deeper. I wasn’t actually looking for a figure, a number. I was more talking about. What things you are paying? You mentioned the appraisal. 

[00:21:23] Josh Lewis, California Mortgage Broker: Oh, okay. 

[00:21:24] Jeb Smith, Huntington Beach Realtor: That sort of thing. So what fees are coming out of my pocket prior to actually getting that loan completed, if you will.

So you’re gonna have escrow and title. Some parts of the country title performs the settlement services or what we call escrow here in California and lots of parts of the West Coast. So you have your settlement fee. You have your title insurance you’re buying a lender’s title policy to ensure that they’re getting clear title to secure their loan.

If there’s an appraisal, you’ll have that fee. Credit report. You’re gonna have a recording fee, you’re gonna have a notary fee for signing your loan documents, and then any fees that the lender charges, and they can call them any number of things. Points. Origination fee, application fee, admin fee, underwriting fee, processing fee.

Again, I don’t get hung up on what we call them. They all go in box A on your loan estimate. Add them all together and just call ’em points. O therwise, you’re going, well, do I have to pay this? What’s that? In essence, it’s a profit center of dollars that go to the lender’s bottom line to offer you that interest rate.

I prefer to be as transparent as possible, minimize those and show you in the term of rates and points so you truly, honestly see what those options are. To me, to my perspective, when you see a lender that has five or six fees in Box A, they’re afraid to come out and tell you what this rate costs and they’re trying to make it look cheaper cuz you’re not seeing points that you’re paying for that interest rate.

No good stuff and if you want to know more about the loan estimate, how to read it, what is on it, breaking it down, being able to compare lenders, if you will. We just recorded that episode two episodes ago, two or three episodes ago, so go check that out. It really, it’s a detailed, uh, conversation about that loan estimate.

We’ll guide you through that process, and on that topic, if you’re looking for a lender to do a refinance, somebody reputable, a professional like Josh, that’s willing to have that conversation and tell you, Hey, it’s not a good idea, not a good. What you’re trying to do is not the right move. There’s a link below to get in touch with a lender anywhere in the United States that will guide you through that process a lot like Josh is doing today.

So, Josh, if I wanted to hit that easy button today and figure out if refinancing is something I should consider, just if I were just trying to lower my payment, right? This is the lowering the payment method. This isn’t factoring cash in and all of the other things, if I’m just thinking, Hey, I heard rates dropped today.

Does it make sense for me to refinance? What is the easy button. 

[00:23:42] Josh Lewis, California Mortgage Broker: You take $125,000 and you divide it by your loan amount so we can get the thousands out of the equation and make it easy. Take 125 and divide it by however many thousand your loan is. So we talked super simple examples. If you owe $250,000, Take 125, divide it by [00:24:00] 250, and it tells us 0.5, it’s one half. You have to save a half of a percent of interest. 

And in general, when I’m looking at this, I wanna look at what a no-cost interest rate is. So if you can, you have a $250,000 loan and you can save a half percent with a no-cost loan. Easy to justify. You can probably justify some closing costs, but you can absolutely justify a no cost loan.

Now for us in California, our average loan amounts are bigger. Homes are more expensive, most people borrow more. So we bump that loan amount to 500. We take 125 divided by 500. That person only needs to save a quarter of a percent on a no-cost refi to make it make sense. Again, hopefully we’re not just doing, when rates are dropping, we don’t have this serial refinancing where every two years someone, Hey, I’m getting a better rate, getting a better rate, but eight years down the line, they’re still in a 30 year loan.

Hopefully we’re decreasing the term with each of those and keeping you on track to pay it off on time. Now, for many of you listening, this is gonna sound crazy, but we have borrowers with million dollar loans here in Southern California and in a lot of parts of the country now. If you owe a million dollars, take 125 divided by a thousand, you only need to save 0.125% in interest to make that savings be real and justifiable on a monthly basis. 

Now, with those bigger loans, those clients generally make more and they have to factor in the time, effort, energy, and nuisance factor of doing the refinance. And they may wanna see a quarter or three eights before they do it, but financially it can absolutely be justified with a much lower amount using that figure.

$125,000 divided by your current loan amount will tell you roughly what you need to save to make it worth your time, effort, and energy. 

[00:25:32] Jeb Smith, Huntington Beach Realtor: All right. I thought we would do something a little bit differently today in ending this. Josh, best advice you would give somebody that is considering refinancing right now.

[00:25:41] Josh Lewis, California Mortgage Broker: Make sure that you’re looking at the costs over time, not just the cost today. Nine out of 10 loan officers are simply going to show you the cost benefit today and try and tell you that makes sense. And the current market where we’re down 70% in terms of refinance volume, 90% of borrowers have an interest rate below 5%, 70% below 4%.

It’s a high bar to be able to justify and make this make sense. I’m still doing one to three refinances every month. So those are unique situations. Again, they’re not financially driven in terms of just looking to lower the payment. They’re debt consolidation and again, one of my favorite books, Jeb, is How to Lie With Statistics, not because I like to lie with statistics because it’s uh, 120 pages of showing you the ways that people do lie with statistics.

Numbers never lie, but people can use numbers to lie. So you wanna look again, the cost, not just today. Cuz if you’re paying off a bunch of higher interest rate debt, shorter term, higher interest rate debt, it is really easy to say from a cash flow perspective, I’m saving you $985 a month. That may very well be the case and it’s still not a good decision for you, so make sure that someone is showing you how they’ve penciled that out.

Obviously it’s easy to see what it does for me today, what does it do for me three years from now, what does it do for me five years from now? What does it do for me 10 years from now? 

[00:26:58] Jeb Smith, Huntington Beach Realtor: Great advice. Thanks for [00:27:00] listening. Thanks for the support. Adios.

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