Blog Category: Recapture Period

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Can I Refinance To A 15-Year Loan From A 30-Year Loan and Keep My Payment The Same?

 

In a word, no. This is not possible. I wrote a blog back in 2011 in another feverish refinance market. It showed the numbers on how you can’t shorten the term of your loan from 30 to 15 years without increasing your monthly mortgage payment. Those numbers bear repeating in the current interest rate climate and are below. Check out this hypothetical example: Read More

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VA Refinance Recoupment Period

The United States Department of Veterans Affairs requires that the closing costs on a VA refinance be recouped in 36 months or less. If the recoupment period is over 36 months the loan will be rejected.

In other words, the refinance closing costs divided by the monthly savings has to be 36 or less.

For example, if the closing costs on a VA refinance are $3,000. And the monthly savings on the refinance are $400 a month. The recoupment period is 7.5 months because $3,000 divided by $400 a month in savings = 7.5. This is well within 36 months. Read More