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If you have any questions about mortgages, re-fi's...

E

explrsport

Senior member
I used the Anandtech forums so often for Hot Deals and tech help, so I wanted to "give back" 😀 If anyone has questions about credit ratings, rates, re-fi's, home loans, etc. just let me know...I work for a big mortgage company in CA. Post or PM me.
 
I posted this in another thread on mortgages......


Wondering if I made a good decision or not, I currently have a 30yr term FHA 1 year arm at 6.625% (6yrs in) and am in the process of refi to close on or about october 7 at 6.375 for out of pocket of $350.00 and add to finance amount of $2750.00 total cost to refi $3000.00 to go from arm to fixed and drop .25%

Any thoughts?
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I am looking to refinance my house. I am wondering if it's possible and a good idea to do so. The reason I am asking if it's possible is because I've only been in mortgage for 4 months. Is there a minimum amount of time you need to be in mortgage before you may refinance? And is it a good idea for me to refinance if my current rate is 6.75% for on a $257,000 loan (30yr fixed). What rate would I get if I refinance now? My credit history is excellent (my FICO score is 810, last I checked). What's your input?
 
Ok, my sister wants to refinance her house in Stockton CA. She wants 6.45% APR fixed and no more than one point. She's willing to pay a customary credit history/credit check fee, a title search fee, and an appraisal fee.

She is not willing to pay a document preparation fee, a processing fee, an application fee, a courier fee, a copying/record keeping fee, an underwriting fee, a jelly donut fee, a whatever-the-hell-else-we-can-concoct-to-rip-people-off-fee, etc.
 
When getting a quote, always have the broker tell you what you would pay if all fees are waived (and I mean waived and not added to the loan) and no points. Then you have a baseline to compare other options. When I refinanced back in December, I chose to pay a slightly higher interest rate in return for waiving all fees and no points. Why? Because when you pay money upfront there is a break even point down the road a few years. If you you refinance again or move or pay off the total loan, etc., before the break even point, you would have been better off with the higher payment no-fee loan. Effective interest rate -- that is what matters.

Lastly, nothing is a bigger turnoff then when a loan officer for a car or mortgage starts talking about my payment amount. All that I care about is the total loan amount, the interest rate, and the term. The payment amount is a mere result of those other things. If I was concerned about +/- $75 on my mortgage payment, I need to move and get a cheaper house. This mostly seems to come up when buying a car: "how much a month can you afford?" So, does the price of the car change depending on how I answer 😉 ? If I cannot imagine paying x amount of dollars will I feel better about borrowing the same amount and paying interest?

Good luck everyone. And lasty, do NOT borrow more than the value of your home unless: 1) You are desparate for cash; and 2) You are damn certain that you are not being screwed over. Reason -- once you borrow more than the value of the collateral, the bank has you bent over, no other lender will lend to you until you pay some of it down. And, any debt where failure to make payments lands you on the street shoould make you a little nervous.


Jeremy806

 
When getting a quote, always have the broker tell you what you would pay if all fees are waived (and I mean waived and not added to the loan) and no points. Then you have a baseline to compare other options.
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This was my sister's latest requirement in series of changing requirements. I asked her what she wanted and that is what she told me.

This whole refinancing thing is a real mess. There are ONLY three customary and reasonable fees in the refinancing business; credit history/check fee, appraisal fee, and title search fee. These are necessary fees the mortgage company will invariably incur ON YOUR BEHALF and must pass on to you. They have to pay for these services by obtaining them from other companies; credit reporting service, appraisal service, and title search company.

NO other fees are incurred on your behalf. Any other fees are an attempt to blow smoke up your ass, in the same way that internet retailers low-ball their prices then try to make the costs up in their shipping, refinancing companies low-ball an interest rate to 'bait' you then make up the difference in NON-NECESSARY and NON-CUSTOMARY fees.

It all starts with one unethical company who low-balls their prices or interest rates in this deceptive way. Then a lot of people say "Ooooo, that's a lower price or interest rate" and gravitate to that company believing this is the better deal. They know this will happen because that's the figure that gets people's attention and what people think is most important. Then other companies lose business to this practice even though they may actually have the better deal when all costs are figured, so they see no other way to compete except to engage in the same unethical and deceptive practices.

The result for the consumer is that you cannot look at the terms from different companies and instantly compare what you're getting. You have to sit down with a calculator or pen and paper to see who is trying to screw you when all the costs are included and all the interest has been paid. There should be a law eliminating this so you can make instantaneous and direct comparisons.

This is not even a legitimate way for a company to reduce costs that translate into savings to the customer, its simply a system that shifts costs between the front-end and back-end in a zero-sum game. Its not a system that enables companies to offer a better deal, its a system that is used to out-fool the consumer as to who has the better deal.
 
TS:

You are correct regading some fees that are BS. However, if you want the LOWEST rate, you will have to pay closing costs that are roughly 3k. This includes a credit fee, an appraisal (very often you pay the appraiser directly), title and escrow fee, and a processing fee. While you may believe this last fee is BS, any mortgage company that is NOT charging you for processing is making the money back somewhere, like a higher rate. It costs me nearly $700 per file for processing, and let me tell ya - it's a bitch of a job. Your post was very well-written, and dead-on about some companies using low rates like "bait".

Jeremy:

You make some good points about a "no-cost" loan. With rates so low, many people take that option.

KT:

6.75% is a pretty good rate. I doubt it would be worth it to re-fi unless you are looking for cash-out, or to modify the term of your mortgage (30year to 15year). With an 810, you are certainly "A" paper, which gets you the best rates. Also, some mortgages have a pre-payment charge which must be taken into account. In other words, it might or might not be worth it...I would need more info. Shoot me an email with your contact info at jordan@firstsecuritylending.com

Slacker:

Same thing as above....more info really needed before I can give you a yes or no.
 
Originally posted by: explrsport
Did I skip anyone?
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$20 says RossMAN will appear. I could contribute, but right now I'm about to pass out. I just unloaded 700+ pounds of dell stuff and my arms ache.

-PAB
 
If you only plan on being in a house for 5-7 years, is there any reason NOT TO go with a 5 year ARM? From what I've seen, the interest rate is a full percent or more lower than a standard 30 year conventional.
 
Originally posted by: vi_edit
If you only plan on being in a house for 5-7 years, is there any reason NOT TO go with a 5 year ARM? From what I've seen, the interest rate is a full percent or more lower than a standard 30 year conventional.
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Very, very, very good question that I would also like answered.

 
*digs this up as I just went to speak to a couple banks about refinancing today*

We just bought our first house a couple years ago on a 30-year fixed at 7.875%. Since this is a nice house in a nice neighborhood with great appreciation potential that we plan to be in it for 15 years+ (i.e., it may be our fist home, but it's not a 'starter home'), we're going to refinance since it should definitely be worth it in the long run. I don't need a calculator to tell me that, although I have run it through some and it looks like we could save somewhere between $150-$225 each month. However, we're just now getting our savings back up to the very healthy levels we had pre-house, since you naturally have to make a down payment and then we put some money into fixing it up the first couple years. Sosince we'd rather not go raid the savings account right now, we'll definitely want to bundle the refinancing costs back into the loan so we can do this for next to nothing out pocket.

I only got a chance to run by two different places today, my credit union and a major bank based here in Birmingham. The credit union had fantastic closing costs, but their rate was at a surpsingly high 6.75% (no points.) The bank had a 6% rate with no points, but 3% the amount of the loan for closing costs. I'm assuming there will be some wiggle room at the bank on their closing costs since she seemed to be giving me the "you're a young guy who I don't need to be wasting me time with so here's the usual spiel" routine without even asking me about my credit rating (which is very strong.) Plus, when I priced them before on our original mortgage they came down quite a bit on costs over time.

I'm just wondering if maybe you mortgage experts can help me figure out whom to talk to before I go tooling all over town comparing companies. There's another larger credit union I want to speak to (their rates quoted online seem cheaper than my credit union's) and then I might try another major bank for comparison. I'm also going to contact our current mortgage company (Bank of America) since one would assume (probably wrongfully) that refinancing costs would be cheaper with them since they already have all pertinent information anyway.

What about little mom-and-pop size mortgage companies? I'm assuming since they have lower overhead that they can maybe cut you a better deal on closing costs? I'm not sure how they'd do on rates and who they'd end up selling your mortgage to though, which is how we ended up with Bank of America as our last bank sold the mortgage to them. Should I bother with these smaller companies?

 
Originally posted by: Parrotheader
*digs this up as I just went to speak to a couple banks about refinancing today*

We just bought our first house a couple years ago on a 30-year fixed at 7.875%. Since this is a nice house in a nice neighborhood with great appreciation potential that we plan to be in it for 15 years+ (i.e., it may be our fist home, but it's not a 'starter home'), we're going to refinance since it should definitely be worth it in the long run. I don't need a calculator to tell me that, although I have run it through some and it looks like we could save somewhere between $150-$225 each month. However, we're just now getting our savings back up to the very healthy levels we had pre-house, since you naturally have to make a down payment and then we put some money into fixing it up the first couple years. Sosince we'd rather not go raid the savings account right now, we'll definitely want to bundle the refinancing costs back into the loan so we can do this for next to nothing out pocket.

I only got a chance to run by two different places today, my credit union and a major bank based here in Birmingham. The credit union had fantastic closing costs, but their rate was at a surpsingly high 6.75% (no points.) The bank had a 6% rate with no points, but 3% the amount of the loan for closing costs. I'm assuming there will be some wiggle room at the bank on their closing costs since she seemed to be giving me the "you're a young guy who I don't need to be wasting me time with so here's the usual spiel" routine without even asking me about my credit rating (which is very strong.) Plus, when I priced them before on our original mortgage they came down quite a bit on costs over time.

I'm just wondering if maybe you mortgage experts can help me figure out whom to talk to before I go tooling all over town comparing companies. There's another larger credit union I want to speak to (their rates quoted online seem cheaper than my credit union's) and then I might try another major bank for comparison. I'm also going to contact our current mortgage company (Bank of America) since one would assume (probably wrongfully) that refinancing costs would be cheaper with them since they already have all pertinent information anyway.

What about little mom-and-pop size mortgage companies? I'm assuming since they have lower overhead that they can maybe cut you a better deal on closing costs? I'm not sure how they'd do on rates and who they'd end up selling your mortgage to though, which is how we ended up with Bank of America as our last bank sold the mortgage to them. Should I bother with these smaller companies?
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I'm not a mortgage expert, but I do know that research and comparison shopping can be your best friends. I would stick the course of what you are doing.

Also, you probably mean mom-and-pop size mortgage brokers. Big difference between a broker and a mortgage company, one which you found out when your mortgage was sold. Also another is that a broker will usually cut out the origination fee, while a bank won't. Brokers also shop your mortgage around, which could land you a better rate than the big bank who will not sell the mortgage. Keep in mind, almost all costs are negotiable.

Just some thoughts.
 
CPA,

Yeah. I guess I mean brokers then 🙂 Hell, I don't care who they are and what their title/job function is. I just want the best deal long term and short term. I do have a couple brokers recommended to me by some co-workers who recently refinanced their mortgages so I guess I'll check them out too. Thanks for the info.
 
If you are sure you are only going to be in the house for a short-term (usually 5 years or less) take the adjustable and the lower rate. Just be aware that rates will probably be much higher in 5 years.
 
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