Another mortgage question

[Jen_in_NH]

We have been looking into refinancing our mortgage, but I have a ton of questions. We currently have a 7/1 ARM that we are 5 years into. I want to get it to a fixed rate, and the rates are currently lower than what we're at (5.25%)

We have our mortgage with our local bank, and I would like to keep it that way. If I have any issues, it's always easy to go to the bank and talk to a live human When I look on their web site for rates, it lists much better ones as "sold servicing released" I assume this means that the bank will not be holding the mortgage? Is that a good thing or bad? Does that make more problems for homeowners insurance and taxes, since we escrow both?

Another question - the town just completed the revaluation, and our property value went down about 30K since we bought it. We have no intention of moving anytime soon, so in the long term, that doesn't worry me. However, that puts us close to our mortgage being about the whole value of the house, so if we refinance, will that hurt us? I'm assuming I would end up with PMI again?

Please help! I have so many questions, and so few answers right now

Jen

 

[ColoradoDisneyFreaks]

You are correct about the servicing option your bank listed. Since they are your local bank, they'd be your best bet though. With anything less than at least 20% equity in the house, it may be that they won't refi you at all, depends on how good your credit is (like stellar 700+ FICO good). But, the worst they can do is say no, give them a call, rates can't go much lower and if you've got cash to put down to bring your LTV down to 80%, that's an option too.

 

[Swimalie]

I would call the bank and see what they say. It does sound like they will sell your loan. I can tell you we started with one mortgage company that we liked in 2006 and around 2008 they sold it to a "debt collection agency" and they were horrible. They would send statements late so if you waited until the statement came, your payment was late. Other things that made them bad. We just refinanced with BB&T for 4.5% on a 30 year fixed. We don't plan on being here more than 5 years so we picked the lowest payment option. So be careful and think about whether you want your loan sold or not. Our new one will not be sold.

We don't escrow so I can't answer about that.

If you don't have 20% of equity, you will have PMI. But, you might be able to pay the difference and avoid the PMI. Our house has lost $145,000 in value since we bought it so we were close to the 20% equity (we put down 35%). We were told we could put in the difference if needed. Luckily we came out about $7000 ahead and were okay.

 

[MinnieForMe]

Hi:

You might want to check with your local Credit Union too! They generally have lower rates and fees than banks and hold their own mortgages.

Good luck!