Help to Refinance Mortgage

[5stljayhawks]

I was thinking about this as well.

I looked at cost, first what is the cost on what you have left on our current mort. Such as your principal and interest, this can be found at most amortization calculator. You will need current balance and internet rate, I think they also ask for year started. Then on top of that you have taxes, home insurance and maybe PMI if you don't have 80% loan to equity.


Then look at what your new mortgage will cost, through the same calculators. I am 7 years into a 30 year at 5.625% and would drop down to 4.25%. The total cost of what I would pay is within a few thousand, yet my monthly would drop $200-$300. I am opting not to refi. If it drops below 4% I may look at a 15 or 20 year, thus dropping monthly outlay, term and total output.

 

[arminnie]

I'm refinancing with ING. It's a 5 year with a balloon that would not work for most. But I have the money to pay it off but it is in an IRA and I don't want to take all the money out in the same year for tax purposes.

The rate is miniscule and I will pay it off at the end of the 5 years. I don't have a big mortgage anyway.

 

[HeyIt'sMe]

I was thinking about this as well.

I looked at cost, first what is the cost on what you have left on our current mort. Such as your principal and interest, this can be found at most amortization calculator. You will need current balance and internet rate, I think they also ask for year started. Then on top of that you have taxes, home insurance and maybe PMI if you don't have 80% loan to equity.


Then look at what your new mortgage will cost, through the same calculators. I am 7 years into a 30 year at 5.625% and would drop down to 4.25%. The total cost of what I would pay is within a few thousand, yet my monthly would drop $200-$300. I am opting not to refi. If it drops below 4% I may look at a 15 or 20 year, thus dropping monthly outlay, term and total output.

You are like us - we are 7 years into a 30 year mortgage at 6.00%.

When we built our house we only put 5% down and, as an incentive, the builder paid our PMI in a lump sum. We still don't have 80% loan to equity yet (IF the house is worth what it was appraised for when we closed we'd be at 84% but I'm sure our value has gone done). We'd have to add PMI to our payment if we re-financed so that would partially offset the reduction in payment due to an interest rate reduction. We just didn't think it was worth it yet.

 

[hoffmann2828]

You are like us - we are 7 years into a 30 year mortgage at 6.00%.

When we built our house we only put 5% down and, as an incentive, the builder paid our PMI in a lump sum. We still don't have 80% loan to equity yet (IF the house is worth what it was appraised for when we closed we'd be at 84% but I'm sure our value has gone done). We'd have to add PMI to our payment if we re-financed so that would partially offset the reduction in payment due to an interest rate reduction. We just didn't think it was worth it yet.

I will still call your current lender if it was me. There are programs out right now (like the HARP program) that allow you to refi easily. Under the HARP guidelines, if you WEREN'T paying PMI before on the current loan, you are excluded from PMI on the new loan.

Bottom line is it's worth a 15 minute phone call.

 

[mrsklamc]

When we re-fi'd with the credit union, we found out they don't do PMI, regardless of what your loan to value is.

 

[hoffmann2828]

This has not been my experience at all! Your interest rate is set up front (currently we have prime -0.75%) and there are no commissions added on. The brokers are paid by the lenders (mortgage companies), not the borrowers.

This "COULD" be the case with yours, but most brokers (at least in the USA, not sure about Canada) can do exactly as Cheshire Figment said.

Brokers are paid a "back end" amount by the lender (officially called a Yield Spread Premium) based on what they sell you. They actually get a price sheet each day from lenders showing the YSP on each rate.

If they sell you a higher rate, they make more on the YSP
If they sell you a lower rate, they make less on the YSP

It is NOT simply a "Hey, we will pay you $1000 for each referral" type of business.

I've been in the mortgage industry for over 15 years (literally my whole adult working career) and I put mortgage brokers right below used car salesman in my "sleazy" people to work with category.

 

[Jeanne B]

all I know is DO NOT go to Bank of America...we started a home mortgage with them on May 22 of this year and we STILL don't hve a close. We have had several officers at BOA tell us that they don't handle their mortgages in a timely manner and they 'drop the ball' on loans. Even our architect said they are the WORST for mortgages. One officer told me he had a mortgage on his day that had taken over 200 days and still wasn't closed.

Same here, started my refinance with BoA in mid-May and it finally just closed last week although they did give me a small lender credit (when I threatened to take my business to a different bank at a lower interest rate about halfway through the process).

 

[Carol NJMB]

I need to know who to go and talk to- that I would trust- about refinancing a mortgage. We're not sure it makes the most sense of course. For whatever reason- my husband & I (both computer analysts)- just really have no financial sense or talents whatsoever. So clueless. Sometimes I think my brain even shuts down and stops hearing (involuntarily) when people start throwing out figures and percentages.

I'd really love to sit down with someone- show them what our current mortgage (and home equity loan) are- and see if refinancing makes sense for us.

#1- we're happy with our payments. I don't think our interest rates are bad. I just know they are EVEN BETTER right now. And I'd like to shorten from a 30 year to a 15 year. I know we'd have to pay all the fees of refinancing and I'm not sure I'm the one who should be running these numbers and figuring out whether it would be worth it for us. lol. I never trust my instincts about financial decisions. No one else should be either. Just saying.

If we met with someone at our bank- could we really trust that they would steer us in the right direction? I'm the one who walks on a car lot and the salesman sees me coming- completely takes advantage of me- and I walk away kicking myself. lol. so i'm just kind of tempted to leave them as they are and don't mess with them. if I don't understand how to make them better- then just leave them alone. lol


Help? lol. We pay our bills just fine. We earn good income. I just need to know who to talk to, to ask whether it makes sense for us to re-do our mortgage right now.

TIA!

I can understand how mortgages can be confusing.

As a mortgage broker, I suggest you get at least 3 Good Faith Estimates from 3 different lenders and compare the charges. A new law effective Jan 1 , 2010 requires that lenders give you a Good Faith Estimate (within 3 days of application) provided you give the lender all the information they require to estimate your costs.

Get these estimates on the same day because rates can change daily. You would be doing yourself a disservice by comparing Lender A with Lender B on different days.

If the lender does not give you the Good Faith Estimate, drop them and go elsewhere.

Cost is just one piece of the puzzle. But it's all that most borrowers focus on. Just as important is having a professional you can talk to, ask questions of, return your phone calls, give you options, etc. Not having access to the latter is why people are on forums like this asking about mortgages. Reflects poorly on my industry.

Good luck to you.