Mortgage Refinance...Need Help

[MouseTrip07]

Four years ago, we did a 4 year adjustable rate loan and it is "coming due" in April of 2008, so we are looking into refinance, as the ARM goes into a balloon loan at maturity. I called a loan company today. The rate the are quoting is 6.87% fixed for a 20 year loan. The only OOP expense is a $390 fee to commit to the loan, the remaining closing costs are going to be built into the loan.

Here is my question...if the rate is good, and we are comfortable with the loan company, is there a reason to shop other loan companies? If so, what should we look for/ask? Also, is 6.87% a good rate? Would it be out of line to ask them to waive the $390, as we have excelllent credit and could probably take our business anywhere?

We have rushed into so many financial decisions in the past, and made mistakes. We'd like to do this one as right as possible.

Thanks,
Jennifer

 

[Cheshire Figment]

If you have had accounts for several years with your bank, ask them. Also, if you are a member of a credit union check with them.

I think that at this time a 6.78% fixed is a good rate.

 

[girli565]

Whether the rate is good depends on your credit score. If you have a good score than I think maybe you should shop around, I don't think you'll get a whole point off but maybe a half a point could be knocked off if you have a decent credit rating.

Shop around and see if someone can give you a better rate with no closing costs. I know some companies advertise that.

 

[girli565]

And sinc eyou have excellent credit than I don't see why you couldn't shop around. The rate is fine, but the closing costs could be what you bargain on.

I know Bank of America has something with mortgages and no closing costs. Even if some company pays a portion you're really ahead. how much would the closing costs be with the loan you already checked into?

 

[EthansMom]

Check with your current mortgage company... my current mortgage company has a low-cost refi option for people who already have their mortgage through them (since they've already done the appraisal and such). Check with your local bank or credit union.

Make sure you understand ALL of the expenses, including the ones that would be rolled into your new mortgage. I've never had such a large fee to commit to a mortgage company... I have had to pay for credit checks and appraisals though.

6.87% sounds like a decent rate, but 6.87% with a 1% origination fee is different than 6.87% with no added fees. So, really make sure you understand all of the fees.

Also, the rates on a 20 year mortgage are about the same as with a 30 mortgage. If you could use the extra breathing room occasionally, but would usually be the kind of person who would pay extra regularly, you could get a 30 year mortgage and pay enough extra to pay it off in 20 years. That way, if some emergency came up and you really needed the extra money, you'd have it.

 

[Colinsmom]

I'd find out a dollar amount on the closing costs that they are rolling into the loan. That's pretty common, I believe, but if they cost thousands more than the next guy, it may not be the best deal out there.

I'd also suggest shopping around - how do you know you have the best deal if you do not? Plus, it gives you some negotiating leverage (meet this other guy's deal and we'll go with you, otherwise we are walking) that you don't have right now.

 

[ICan'tWait]

Depending on your loan amount, Wells Fargo's web site lists lower interest rates. Not sure what their fees would be though..... It can't hurt to make a few phone calls and shop around just to make sure.

 

[chris1gill]

you can try www.penfed.com we just went through them with a 5/5 arm for 5.375%, with 1200 in closing costs... it was worth the savings to us...

 

[poptoone]

I'm getting quotes around 6.1% - 6.25% on 30 year fixed right now and I would guess 20 years would be less. I would shop around a bit I think!

 

[MouseTrip07]

Okay-I just called for more information. The closing costs are $2031. The $390 commitment fee is a part of that, making the closing costs to be rolled into the loan $1641.

We are definitely going to shop around. We will try our credit union for sure. Bank of America and Wells Fargo have come up so far...any other suggestions?

Jennifer

 

[keishashadow]

realtor hat on...make sure these places you're shopping are doing a "soft pull" on credit report to avoid too many dings whilst you shop.

Agree it's best to go with current mortgage holder (if you haven't had the original loan too long you can sometimes do a streamline where you can avoid repetitive closing costs - appraisal, termite, etc.)

Primary banks in the Pittsburgh area tend to not have the gratest rates.

Another good source is a mortgage broker. You have to pay him a fee (variable) but he has many lenders to work with in order to make the deal work.

Of course, if you can go VA that is usually a good rate.

Bottom line compare all fees and ask for good faith estimate before signing anything.

 

[keishashadow]

Okay-I just called for more information. The closing costs are $2031. The $390 commitment fee is a part of that, making the closing costs to be rolled into the loan $1641.

We are definitely going to shop around. We will try our credit union for sure. Bank of America and Wells Fargo have come up so far...any other suggestions?

Jennifer

try Citibank