Gotta bite the bullet and refinance, but I have no clue what I'm doing...

[Stanley Nickels]

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.

[Stanley Nickels]

Originally Posted by oldman

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.

CapFed is our bank, so I'll give them a look. Thanks!

[jjchieffan]

Just fyi, I just did a refinance on my home. The lender was Regions bank and they did a 3.625 for me on a 30 year fixed. That was a fha loan due to my credit being a 640. I went a year without a job back in 2007-2008 and I am still repairing the damage done to my credit back then. Due to the housing market, I was over 80% of equity so I got stuck with pmi for 5 years but I'm still paying significantly less.

[OPgold]

Check out Community Home Lending in Overland Park. We went through them last fall and couldn't have been happier. They took the time to learn about our situation and structured a loan that met our needs perfectly. That was done with the lowest rate we could find and very reasonable closing costs.

I would absolutely stay away from the commercial places. We got quotes from them and their fees were much higher. I guess those commercials aren't cheap.

My advice would be to get a quote from Cap Fed and at least one local mortgage banker.

Best of luck!

[BigRedChief]

Originally Posted by FRCDFED

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.

This is what we did with our house purchase. He found a bank that was running a 30 day special to pay the closing costs of the loan. All we had to do was lock in the loan within 30 days and have good credit. Saved us thousands of $'s.

[Spott]

I tried to refinance from 5.875 to a lower rate. Even though my credit score is over 800 no bank will do it unless I put down about 80-90 grand because my loan isn't owned by Fannie Mae or Freddie Mac and isn't a FHA or VA loan and my house is now worth a lot less because the housing market in Florida is about 35-40% of what it was a few years ago.

[Ming the Merciless]

Originally Posted by Stanley Nickels

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.

A lender *may want you to kick in cash to bring that to 80%

It would all depend on the appraisal most likely. So getting a lender who does the appraisal at no or little cost (their pocket) would be good so if the appraisal was short, you could protest or walk away without getting hit.

I believe 80 is the magic number for PMI but I'm not completely sure, since as an investor I cant make offers with less than 25-30% down.

[BigRedChief]

Originally Posted by Spott

I tried to refinance from 5.875 to a lower rate. Even though my credit score is over 800 no bank will do it unless I put down about 80-90 grand because my loan isn't owned by Fannie Mae or Freddie Mac and isn't a FHA or VA loan and my house is now worth a lot less because the housing market in Florida is about 35-40% of what it was a few years ago.

We locked in two weeks ago in Florida. Traditional 5% down home loan. No government or FHA/VA involvement etc.

If you are upside down on your mortgage no one will refinance a loan for more than the house is worth. If thats not the case, why can't you refinance with that credit score?

[Stanley Nickels]

Originally Posted by Pawnmower

A lender *may want you to kick in cash to bring that to 80%

It would all depend on the appraisal most likely. So getting a lender who does the appraisal at no or little cost (their pocket) would be good so if the appraisal was short, you could protest or walk away without getting hit.

I believe 80 is the magic number for PMI but I'm not completely sure, since as an investor I cant make offers with less than 25-30% down.

That's what it was previously. I bought my home in the middle of the housing crisis, and had averaged 39.5 hrs/week over the previous two years of work (not sure how they came up with that, as I had worked full time, but whatever), and they would not insure my mortgage. Had to scrounge every penny I could to get a full 20% down payment, or no house for me.

[Spott]

Originally Posted by BigRedChief

We locked in two weeks ago in Florida. Traditional 5% down home loan. No government or FHA/VA involvement etc.

If you are upside down on your mortgage no one will refinance a loan for more than the house is worth. If thats not the case, why can't you refinance with that credit score?

I am upside down. I still owe 190 for the house, but now the house will only sell for maybe 110 if I'm lucky. I would have to put down about 85-90 grand just to refinance which I am not going to do when I can easily buy most of the houses in my neighborhood for that. Since I am not Harp eligible, I have already made other plans as far as buying another house and renting my old one out or just letting it go for a short sale.

[mikeyis4dcats.]

Originally Posted by Pawnmower

A lender *may want you to kick in cash to bring that to 80%

It would all depend on the appraisal most likely. So getting a lender who does the appraisal at no or little cost (their pocket) would be good so if the appraisal was short, you could protest or walk away without getting hit.

I believe 80 is the magic number for PMI but I'm not completely sure, since as an investor I cant make offers with less than 25-30% down.

ASFAIK you can ASK to have PMi removed at 80%, but the bank won't automatically do it until 78%.

[REDHOTGTO]

i re-fi'd almost 10 yrs ago, i did not have an arm but just a higher rate than was available at the time. i chose to do the 15 yr note, paid a bit extra each month but now at 49 i am only 6 yrs from havin it paid for ! i financed the cost of re-fi into the note and over the time period of 15 yrs instead of 30 i saved a buttload.
have fun

[mikeyis4dcats.]

Originally Posted by REDHOTGTO

i re-fi'd almost 10 yrs ago, i did not have an arm but just a higher rate than was available at the time. i chose to do the 15 yr note, paid a bit extra each month but now at 49 i am only 6 yrs from havin it paid for ! i financed the cost of re-fi into the note and over the time period of 15 yrs instead of 30 i saved a buttload.
have fun

so 10yrs ago you refi'd into a 15yr, paid extra each month and you're now 6 years from paying it off?

[R8RFAN]

Originally Posted by Hog Farmer

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.

You can always pay a 30 year mortgage off in 15...

Unless you are sure and disciplined I would just go 30


But then again My house is paid for and I am 100% debt free so what the hell do I know huh?