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Old 03-31-2013, 08:50 AM  
Stanley Nickels Stanley Nickels is offline
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Gotta bite the bullet and refinance, but I have no clue what I'm doing...

I bought my house in June 2009. Being a dumb and impressionable first-time homebuyer, I opted for a 5/1 ARM at 3.875%. The percentage isn't too bad, but if the housing market makes a strong comeback, I could be looking at some pretty high rates in the future.

I want to refinance, but have very little idea what I'm doing. Obviously, call around to see who is offering the lowest rates, but I'm hoping you all could provide some advice..

Should I work the cost of refinancing into my mortgage (I'm opting for 30 fixed, probably around the same rate I'm currently at), or bite the bullet and pay up front?

Is it realistic to expect that I could negotiate the cost of refinancing? Do companies that offer inexpensive refinancing usually have higher interest rates?

Have you worked with any places in town (KC) that you know to be reputable and trustworthy? Any to avoid? I'm reluctant to call the more "commercial" places (Vinson, Granny, etc) but that could be unnecessary skepticism on my part.


Anyway, I'll hang up and listen.
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Old 03-31-2013, 09:02 AM   #2
mlyonsd mlyonsd is offline
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Originally Posted by Stanley Nickels View Post
I bought my house in June 2009. Being a dumb and impressionable first-time homebuyer, I opted for a 5/1 ARM at 3.875%. The percentage isn't too bad, but if the housing market makes a strong comeback, I could be looking at some pretty high rates in the future.

I want to refinance, but have very little idea what I'm doing. Obviously, call around to see who is offering the lowest rates, but I'm hoping you all could provide some advice..

Should I work the cost of refinancing into my mortgage (I'm opting for 30 fixed, probably around the same rate I'm currently at), or bite the bullet and pay up front?

Is it realistic to expect that I could negotiate the cost of refinancing? Do companies that offer inexpensive refinancing usually have higher interest rates?

Have you worked with any places in town (KC) that you know to be reputable and trustworthy? Any to avoid? I'm reluctant to call the more "commercial" places (Vinson, Granny, etc) but that could be unnecessary skepticism on my part.


Anyway, I'll hang up and listen.
Definitely get out of the ARM.

I've only refinanced my house once so maybe someone else can answer this, but I don't think there's much negotiation in the cost of refinancing. You can shop around for the best deal on closing costs and interest rates though.

Pick a few bank's websites and see what the options are. I made the mistake a year or so ago to go to the Quicken loans website just to see what kind of rate I could get and after that I had about 5 different companies calling me night after night.
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Old 03-31-2013, 09:02 AM   #3
Hog Farmer Hog Farmer is offline
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3.875 is a good rate. If you're set on going fixed I suggest 15 years instead of 30. The monthly difference isn't that much but the total payout difference is huge.

If I were you I would leave it alone. Interest rates aren't gonna go up enough to worry about.
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Old 03-31-2013, 09:03 AM   #4
ChiefButthurt ChiefButthurt is offline
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Well my initial advice would be refinance for the shortest term you can afford. The amount of money you spend over the life of a 30 year mortgage is staggering. Many mortgage companies offer many options....25, 20 , 15 year terms, take advantage of them if you can. Shorter term will generate equity fast. Check it out on your excel program and work the numbers.

Check with your current mortgage company before you search around, they might cut you a break on closing costs. Oh and the obvious, your credit score needs to be good to excellent to get the best rate. The government requires them to list their conditions and costs before you sign at closing, make sure they do this. Better yet make sure they send you the closing documents the day before so you are not rushed at the closing table. Many closing agents resist, but tell them that you plan to read each document in it's entirety at closing, that will get them to send it.

Good luck.
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Old 03-31-2013, 09:04 AM   #5
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LGet a 'good faith estimate' of closing costs in writing,..do not rely on verbal promises

It is reasonable to have closing costs built in.....depending on the company.

One baseline you can start with is cashcall.com. generally decent rate, little to no out of pocket costs, they pay the appraisal.....and you can do everything by email until you sign....and they send the notary to you.

Generally speaking your options will boil down to paying X more for Y less % rate. The prudent thing to do is calculate the amount of money you would save per year at the lower rate......then see how many years it would take to pay that X cost. If you know 100% youll be there for that long or longer, then its an easy call.

Best of luck to you!
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Old 03-31-2013, 09:05 AM   #6
Stewie Stewie is offline
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I refinanced in '03. My mortgage company was the best deal since they waived a lot of costs that a new mortgage company would require. They called it a streamlined refi, or something like that.

I think rolling the cost of refinancing depends on how long you plan to stay in your house.

I've heard James B. Nutter is a really good local mortgage company. They service all the loans they originate (or they did last time I looked).
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Old 03-31-2013, 09:13 AM   #7
Stanley Nickels Stanley Nickels is offline
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Originally Posted by Hog Farmer View Post
3.875 is a good rate. If you're set on going fixed I suggest 15 years instead of 30. The monthly difference isn't that much but the total payout difference is huge.

If I were you I would leave it alone. Interest rates aren't gonna go up enough to worry about.
Because of my volatile job situation, the 30 is a far better option. The payment at 3.75%/30yr is $250 less than 3.0%/15yr, and I'll overpay dramatically on principal once my job becomes more stable. The ARM has a cap of 8%, which is why I want to get out of it ASAP, even if that means I forego an adjusted interest rate lower than I'm currently at.
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Old 03-31-2013, 09:13 AM   #8
Stanley Nickels Stanley Nickels is offline
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Originally Posted by mlyonsd View Post
Definitely get out of the ARM.

I've only refinanced my house once so maybe someone else can answer this, but I don't think there's much negotiation in the cost of refinancing. You can shop around for the best deal on closing costs and interest rates though.

Pick a few bank's websites and see what the options are. I made the mistake a year or so ago to go to the Quicken loans website just to see what kind of rate I could get and after that I had about 5 different companies calling me night after night.
Lending Tree is the same way, I learned four years ago.
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Old 03-31-2013, 09:20 AM   #9
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I tend to use a mortgage broker vs. a bank. The broker will attempt to find the best rate offered by several banks and lenders. Some companies will pay your lending fees if you have excellent credit. I would roll the costs into the loan otherwise. As others have suggested I would make the term of the loan as short as possible. There are some great rates available at the moment so that should help. Either way you have to get out from under the ARM. Once the balloon payment passes the rate will probably be much higher than a conventional loan. I can PM you name of the broker I use if you like. He is a great guy. If he can help then great. If not then no harm done. I believe he is only licensed in MO though. Where do you live?
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Old 03-31-2013, 09:21 AM   #10
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look at Capital Federal. Good rates, plus you can do a streamlined refi for $1,000 if you ever want to. We did one last year a year into our loan because rates had dropped so much....will save us $28,000 in the long run.
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Old 03-31-2013, 09:25 AM   #11
theelusiveeightrop theelusiveeightrop is online now
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Try for a 15 year, fixed rate. Don' go with lending companies. Use a bank. You will feel better.
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Old 03-31-2013, 09:34 AM   #12
Stanley Nickels Stanley Nickels is offline
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I tend to use a mortgage broker vs. a bank. The broker will attempt to find the best rate offered by several banks and lenders. Some companies will pay your lending fees if you have excellent credit. I would roll the costs into the loan otherwise. As others have suggested I would make the term of the loan as short as possible. There are some great rates available at the moment so that should help. Either way you have to get out from under the ARM. Once the balloon payment passes the rate will probably be much higher than a conventional loan. I can PM you name of the broker I use if you like. He is a great guy. If he can help then great. If not then no harm done. I believe he is only licensed in MO though. Where do you live?
Thanks for the offer, but I'm in KS
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Old 03-31-2013, 09:41 AM   #13
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Check your own bank first. Since you're already a customer, they might cut you a pretty good deal. Cap Fed or any other savings and loan would be a 2nd choice. Most lenders will roll the cost of the refi into the loan.
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Old 03-31-2013, 09:42 AM   #14
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Originally Posted by Stanley Nickels View Post
I bought my house in June 2009.
So this pobably means that you are upside down in the loan to value...

We recently refinanced our house because of the HARP programs through Quicken. We bought our house, new, in Vegas (worst market now) in 2006. The rate back then was 6%. We never were behind and refused to allow the house to go delinquent just to qualify for other government backed refinance programs.

The HARP program allows people who are not late to refinance to take advantage of the current lower rates, even if they are upside down in their home - as long as it is within certain criteria.

In the end, we refinanced at 4% fixed.

We checked alot of banks and lenders and the best one to work with was Quicken Loans.
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Old 03-31-2013, 10:05 AM   #15
Stanley Nickels Stanley Nickels is offline
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So this pobably means that you are upside down in the loan to value...

We recently refinanced our house because of the HARP programs through Quicken. We bought our house, new, in Vegas (worst market now) in 2006. The rate back then was 6%. We never were behind and refused to allow the house to go delinquent just to qualify for other government backed refinance programs.

The HARP program allows people who are not late to refinance to take advantage of the current lower rates, even if they are upside down in their home - as long as it is within certain criteria.

In the end, we refinanced at 4% fixed.

We checked alot of banks and lenders and the best one to work with was Quicken Loans.
The value of my house is currently about 90% of what it was when I bought it, and I owe 83% of it's current valuation. I'm worried I might have to pay PMI because it's dropped in value. But the loan is less than its appraised value.
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