Refinancing, what to look for??

[TR Custom Parts]

Want to refinance the house. What scams are there out there that I need to be aware of?? Rignt how paying 6 1/8% and have 23 years to go. Will probably be dead by then.

 

[22lbChevelle]

I recommend just learning about loans, amortisation, and seeing how much a change in interest rate/payment/loan duration can effect the overall amount paid. I dont know how much math you know but in school I took an engineering administration class with "Engineering Economic Analysis" as the textbook that would break down everything you could want to know about moving money through time. There wont be any scamming as long as you know about this stuff.

 

[Mac in SD]

Mark,
rates are in the mid-4's now. Go for a 30 year fixed, or go for an even lower rate with a 15 if you can swing the payments. I'm with a credit union, so I went there.

Also, my "old" mortgage was with Wells Fargo, and they contacted me about a Fannie Mae program that would have refinanced at 4.625 with no fees or appraisal. Check with your current mortage company or bank.

 

[DCVING 6]

Check with your current mortage company or bank.

Yep! I also had Wells Fargo and they offered no appraisal, and a few other discounts if I refinance through them, with them knowing I could easily go through another company and they would lose the loan.

Also, many advertise no closing costs. Most actually just roll those costs back into your loan. IMO, its better to pay them up front if you have the cash, that way you aren't paying intrest on them.

 

[JOHNDEEREGN]

We just took out a 30 yr in 2007.

Just by making bi-weekly payments instead of once a month it cuts the loan amount almost 7 years

 

[ijames]

Find out what the closing costs will be, because they like to bury those in the loan so you get a better rate on a bigger loan, yes the monthly payment goes down but not as much as you thought. Finance companies like to do this with an "origination fee", which is basically their profit, and can be several thousand $$ depending on the size of the loan. If they are reluctant to come up with the summary sheet until just before closing, be suspicious.

I really recommend against the 15 yr mortgages. Just make sure there are no penalties for early payoff on a 30 yr fixed (after the first couple of years, I think they all have penalties if you pay off just after closing ). Then make extra principal payments each month. Somewhere around an extra $100 to $200/month will pay that 30 yr loan off in 15 years. The difference is if you get into financial trouble you aren't committed to the larger payment each month, you can drop back to just the required payment, so you have that little extra cushion which could be the difference between keeping up or missing a payment.

How long do you plan to stay in the house? If it's just a few years then the rate isn't really important, getting the closing costs down to rock bottom is. If you will be there 5+ years (that number depends on lots of things but it's a good start for planning) then the closing costs are less important because you will be spreading them over more time, and getting the best interest rate is where you should focus.

There are online calculators everywhere that you can use to play what if games - put in your principal and play with the interest rate to see how much of a change you can make, then up the principal a few thousand to see how more closing costs will hurt, etc. Also, don't forget that the mortgage P&I (principal and interest) are only part of you monthly payment, the rest is the tax escrow and insurance payments, and those won't change when you refinance.

 

[DCVING 6]

I really recommend against the 15 yr mortgages. Just make sure there are no penalties for early payoff on a 30 yr fixed (after the first couple of years, I think they all have penalties if you pay off just after closing ). Then make extra principal payments each month. Somewhere around an extra $100 to $200/month will pay that 30 yr loan off in 15 years. The difference is if you get into financial trouble you aren't committed to the larger payment each month, you can drop back to just the required payment, so you have that little extra cushion which could be the difference between keeping up or missing a payment.

This is the exact thing my wife and I have been talking about. We came to the same conclusion that we would rather pay extra on a 30 year than get into trouble not being able to swing the payment on a 15 year if one of us should find ourselves unemployed.

 

[DavzGN]

I just talked to the bank today about refinancing. we are just under 23 years left and we are going to go to a 20yr mortgage. The 30yr is at 5.5% and the current rate for the 20yr will be 4.375%. If my calculations are right, the payments will be about $25 less a month, so we will save about $34,000 since we will cut 33 or 34 $1000 payments off the end of the loan.

David
87GN

 

[regan j]

My opinion

finance as long as possible, make extra payments(make sure the payments are marked principal only) and enjoy when u pay off in less than half of the time you financed.

 

[TR Custom Parts]

Still haven't done anything with this yet. Anyone ever use Quicken Loans??? My credit union took 4 days to call me back so not sure about going with them.

 

[DCVING 6]

Going through Wells Fargo right now... We are existing customers with them, so we don't have to pay for an appraisal or anything, just closing costs. 4.5%for 30 years fixed.

My guy has been Johnny on the spot for getting back to me with any info.

 

[dr_frankenstein]

Still haven't done anything with this yet. Anyone ever use Quicken Loans??? My credit union took 4 days to call me back so not sure about going with them.

I would strongly suggest staying local.

I just went through this process right now with the purchase of my new home.

STAY AWAY from Quicken. They will get you approved and get you money, and then saddle you with hidden fees. plus the drama of getting paperwork back and forth... not worth the hassel IMHO.

the fees are usually based on stupid Extras that might be needed, such as handling fees, Escrow Account fees, etc etc.

your local loan officer might have held back for better reasons, give them time to do there research. Its better to get the straight answer on why or why not of a loan, then to have somebody to give you the money on a whim and you default for some reason or another.

A.j.

 

[SPOOLIN]

I recomend quicken loans i have used them and needed to close escrow really fast and they made it happen.

 

[rmar]

Your loan will most likely be sold off anyway, but locals are always better if possible. right now if you are in good standing and good credit 3.75% for 15 to 20 yrs. to 4% fixed for 30 should be doable. Don't just settle. Money is cheap right now.

 

[TR Custom Parts]

Just got off the phone with my local credit union, they are offering 4.25 for a 20 year and 4.375 for a 30 year.

 

[rmar]

Mark,
I would call around, remember they are not the only game in town...

Secondary market with a 700+ credit score is 3.7 or so. So call around it is worth the time.

 

[Mark T-TB]

We went thru this several times a few years back, the on-line deals were not that great. We found local banks with better rates in several cases and
were able to refinance several times with NO closing costs. Not sure how the financial melt-down has changed the market.
We found that the local banks would often offer a better rate (I think it was around 1/8 to 1/4%) when they can "draft" the payment directly from your checking account.
I agree 100% on the longer term... you can always pay it off early by working on the principle a little bit at a time - on YOUR schedule.
Good luck! The current rates are fantastic.

 

[Scott A.]

We closed last month on 4% on a 20-year fixed loan. 15-year loans were going for 3.6%. We were with Wells Fargo, but they couldn't touch our quotes. Screw them anyways, they said we didn't qualify for their 'quick refinance' program, and couldn't explain why. We have 800+ credit scores, little to no debt, and they turned us down, wanted to put us in a 4.5% program.

I almost went the 15-year loan, but decided to go 20 years. You can always pay it off early, both rates are cheap!

 

[TWISTER]

I just refinanced again after 2 years. Originally 6.25% in 05 when I built the house on a 30 year then 4.75% last year I think and now Im down to 3.50% for a 15 year. This time I took the cash difference to put up a building for free. hahaha. Only good thing about a bad economy.

 

[Little6pack]

Want to refinance the house. What scams are there out there that I need to be aware of??

Anything run by the Goverment.

Mark,We are in the same boat. Except mine is 4.5%. I wanted to go 15 years. I wanted to use a credit union so it stays in house and not sold to the big boys.

my decision instead is throw more principle at it and it will cut the term down in years with no refi hassle.

Or sell your car. Should be worth the balance