Refinancing a Home?

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galaxy

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OK real estate pro's...got a question about refinancing. Got in touch with my current mortgage company about other items and got to talking about refinancing...so it's not some scam company that called me. Have an opportunity to refinance one of my homes and knock off a full interest point. Supposedly (still doing homework) no fees, no hidden charges for appraisals or anything. A $950 fee for a VA funding fee on the VA certificate. Saving a point will take my interest rate down to fixed 4.5% (from a fixed 5.5%) and they'll finance fixed for what ever timeframe I want. Going 30 fixed will knock $320+ off my monthly payment, and that includes taxes and insurance...not just principle and interest.

1% over the life of the loan could mean a lot. And the lower payment means a lot since I have zero plans to retain this home once the market allows me to unload it.

So...I would love to get your random thoughts, but more specifically any negatives hiding here when you refinance. I want to know what I'm overlooking or need to investigate.

Thanks guys
 
IME the no fees ploy is all hype, they just try and roll the fees into your new principle. Id check that out.
Generally if you can get a point lower its worth the work to refi.

Also check if Freddi or Fanny hold your loan, there are several plans with the housing crisis that you may be able to get if they 2 hold your loan.
 
here are some things to consider...

1) how far into your principal are you right now?
2) what are all of the fees and closing costs?
3) is there an early payoff penalty?
4) have you shopped around?
5) how is your credit?
6) do you plan on staying in your home for a long time?
7) what other debt are you currently paying on?
 
Jeff120 said:
IME the no fees ploy is all hype, they just try and roll the fees into your new principle. Id check that out.
Generally if you can get a point lower its worth the work to refi.

Also check if Freddi or Fanny hold your loan, there are several plans with the housing crisis that you may be able to get if they 2 hold your loan.
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He is paying a funding fee. Going VA is relatively safe ( no hidden fees). OP you might want to look at a 3-5 yr. arm since you are going to unload this property (lower rate). Is this an owner occupied or investment property? With the mortgage shake up all fees must be disclosed up front including points. Mortgage Brokers and banks cannot charge extra fees once a Good Faith Estimate is generated.
 
jslym777 said:
1) how far into your principal are you right now?
Click to expand...

8 of a 30 fixed.

jslym777 said:
2) what are all of the fees and closing costs?
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Supposedly only $950 for the VA funding fee.

jslym777 said:
3) is there an early payoff penalty?
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Need to check, but same bank so assuming not.

jslym777 said:
4) have you shopped around?
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Nope. This was a fluke...wasn't shopping. It just came up during a phone call.

jslym777 said:
5) how is your credit?
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Phenomenal.

jslym777 said:
6) do you plan on staying in your home for a long time?
Click to expand...

Nope. Will be looking to unload it as soon as the market allows

jslym777 said:
7) what other debt are you currently paying on?
Click to expand...

Another house:buffing: LOL!

My biggest concern in this refinancing bit is the decrease in house payment will get me out of the hole on the incoming rent.
 
Rsurfer said:
He is paying a funding fee. Going VA is relatively safe ( no hidden fees). OP you might want to look at a 3-5 yr. arm since you are going to unload this property (lower rate). Is this an owner occupied or investment property? With the mortgage shake up all fees must be disclosed up front including points. Mortgage Brokers and banks cannot charge extra fees once a Good Faith Estimate is generated.
Click to expand...

You can't do an arm of any type with a VA, and I'm not interested anyways. Just because I want to unload this property doesn't mean the market will allow it in a few years. Not going to take that gamble, especially with todays interest rates. Besides, I don't think banks even do arms these days do they?
 
galaxy said:
OK real estate pro's...got a question about refinancing. Got in touch with my current mortgage company about other items and got to talking about refinancing...so it's not some scam company that called me. Have an opportunity to refinance one of my homes and knock off a full interest point. Supposedly (still doing homework) no fees, no hidden charges for appraisals or anything. A $950 fee for a VA funding fee on the VA certificate. Saving a point will take my interest rate down to fixed 4.5% (from a fixed 5.5%) and they'll finance fixed for what ever timeframe I want. Going 30 fixed will knock $320+ off my monthly payment, and that includes taxes and insurance...not just principle and interest.

1% over the life of the loan could mean a lot. And the lower payment means a lot since I have zero plans to retain this home once the market allows me to unload it.

So...I would love to get your random thoughts, but more specifically any negatives hiding here when you refinance. I want to know what I'm overlooking or need to investigate.

Thanks guys
Click to expand...

Only if you keep it the life of the loan. To me it comes down to the foreseen length of keeping it. If you're going to keep it one year, you'll save 1% of the mortgage balance. If the resulting savings exceeds closing costs on the loan, then go for it.
 
while youre at it just roll in your mortgage from your other home and any car payments into your refi
 
How old are you?

Do you have disability insurance?

Do you have life insurance? (if you have a family)
 
galaxy said:
Hoping you'll show how this is relevant...

40/yes/yes(yes)
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Well, If you would've been in your 60's a 30 year note would be a bad idea IMO. You don't wanna have a mortgage payment when your in your 90's IMO

Disability Ins is great to have in case you ever have a medical condition that prohibits you from working. No work = No mortgage money

Life Ins is great to have should you kill over. Killing over = No mortgage money

Hope these answers prove to be relevant to you


Flash
 
these dont necessarily pertain to whether or not a refinance is a good cost saving decision. these are just insurance measures that ANYONE should take while under a mortgage whether its a refi or not.
 
jslym777 said:
these dont necessarily pertain to whether or not a refinance is a good cost saving decision. these are just insurance measures that ANYONE should take while under a mortgage whether its a refi or not.
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I agree. I wasn't thinking clearly I don't suppose. Shoot me if you'd like

Galaxy, this really seems like a no brainer as to what you should do. If you can drop your note $350 pr month over 22 years, this will save you big money
 
a refi doesnt necessarily save you money because you lengthen your loan again out to 30 years. it helps you cut your monthly payment. if you want, you can PM me your current payment and balances and such and i can see if i can come up with some figures for you.
 
Wowsers .... heres some things to ponder

In general a Good Faith Estimate is just that, and estimate. The final HUD1 which should be delivered before closing will finalize any costs and responsibilites. Never assume it can be costly, review the HUD and ask questions. You will see prepaid taxes and other items. (most time under refi you need to come up with Escrows again to date and receive check for those currently held with bank after closing)

The original rule of thumb was you wanted to see a 2 point drop before refinancing WHEN you are paying fee's. You also need about 18-24 months to recoup the closing cost in savings from fee's paid unfront, so refinance should always consider time in home.

Programs are available under HARP and other govt programs with your current lender to make housing more affordable. These often include low or no fee offers and can help reduce payment with lower rate, but carefully measure any extra term over time left on current mortgage. You may save 1 point (good over life of loan) but extending terms (say 15 years left and go to 20 years means 60 more payments).

Most mortgages have more interest paid upfront and over time sways. In a refinance you place yourself back at the start and if moving soon or selling quickly should measure benefit versus existing note.

All mortgage reps should now be licensed and trackable. You will be able to check (and complain if necessary) on unscrupulous lending practices based upon new State and Federal Laws.
 
galaxy said:
You can't do an arm of any type with a VA, and I'm not interested anyways. Just because I want to unload this property doesn't mean the market will allow it in a few years. Not going to take that gamble, especially with todays interest rates. Besides, I don't think banks even do arms these days do they?
Click to expand...

Every lender that I do business with (78) does arms.
 
killrwheels@autogeek said:
Wowsers .... heres some things to ponder

In general a Good Faith Estimate is just that, and estimate. The final HUD1 which should be delivered before closing will finalize any costs and responsibilites. Never assume it can be costly, review the HUD and ask questions. You will see prepaid taxes and other items. (most time under refi you need to come up with Escrows again to date and receive check for those currently held with bank after closing)

The original rule of thumb was you wanted to see a 2 point drop before refinancing WHEN you are paying fee's. You also need about 18-24 months to recoup the closing cost in savings from fee's paid unfront, so refinance should always consider time in home.

Programs are available under HARP and other govt programs with your current lender to make housing more affordable. These often include low or no fee offers and can help reduce payment with lower rate, but carefully measure any extra term over time left on current mortgage. You may save 1 point (good over life of loan) but extending terms (say 15 years left and go to 20 years means 60 more payments).

Most mortgages have more interest paid upfront and over time sways. In a refinance you place yourself back at the start and if moving soon or selling quickly should measure benefit versus existing note.

All mortgage reps should now be licensed and trackable. You will be able to check (and complain if necessary) on unscrupulous lending practices based upon new State and Federal Laws.
Click to expand...

True Scott, but that applies to the interest only. If you quote closing cost and points (GFE) then you must honor those costs. New RESPA laws will bind you to those fees quoted.
 
My wife is a Realtor and runs into this all the time. In this market, you need to carefully evaluate the true value of your home. Don't fall ploy to a refi for 100% of the value. There are ALWAYS costs involved, even when they say there isn't. Are you planning on cashing out on any of the equity? Experts advise not to do a refi unless there is at least 2% difference in the interest.
 
Midnight1700 said:
My wife is a Realtor and runs into this all the time. In this market, you need to carefully evaluate the true value of your home. Don't fall ploy to a refi for 100% of the value. There are ALWAYS costs involved, even when they say there isn't. Are you planning on cashing out on any of the equity? Experts advise not to do a refi unless there is at least 2% difference in the interest.
Click to expand...
If a lender will give you a loan with no closing cost (no points) and there is a 1 point spread, more than likely it will be worth refinancing.
 
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