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Refinancing my house..........

2K views 25 replies 16 participants last post by  kid creole 
#1 ·
Apparently the idiot who did the mortgage for my house screwed me over by getting me a 3 years adjusting rate. Now I have to refinance so I was wondering if anybody can give me some recommendation on where/who to look into for these stuffs. I already have a few places with pretty decent rates in mind, but the refinancing fee is just crazy. This is my first home so I would appreciate it if someone who is good with these stuffs can help me out. Thanx a bunch:thumbsup:
 
#3 ·
Go for no points if possible (unless you want the tax write off next year), and I would shoot for under $1000 for closing costs.

You might have to pay the cost of an apraisal out of pocket too. Kind of hard to say since we live in different states. Every area might be different.

The way I found the best rate was to google "Georgia mortgages". After sifting through the garbage for a couple of pages, I found a site that had market rates for different companies and from there I found the most competitive rate.

As far as the fee is concerned, I wouldn't be as concerned with that as I would be with the variable rate that you have. A variable rate in CT could get ugly quick.

One of the things that could make things difficult is:

The amount of equity that you have in the house/property. If you have only had this for a few years, then the majority would be whatever you put down. Since you have a variable rate, it is probably interest only which means you haven't put anything towards the principal. This could make a refi a little more difficult (and possibly more expensive for you).

The other thing is that since you are doing the refi in the middle of the housing slump, you might get dinged on the apraisal. Your house might have a smaller market value than when you bought it a few years ago. Hard to say.
 
#4 ·
Not too many people would think it's necessary, but I would suggest paying for a Lawyer to review any of your rates or loan docs BEFORE you sign. If you didn't know what type of loan you got the first time and signed the paperwork for a 3 year adjustable loan I would say your mortgage broker did exactly
what he should have done. He got you to sign and horrible loan that that's going to make HIM a lot of money. Since most mortgage brokers are obviously in the business to make money they will give you the worse possible loan every time if it's going to me them more money. They clearly have THEIR best interest in mind and not yours. If they can make an extra $100 by charging you $1000 mark my word they will tell you you have to pay the $1000 and pocket the $100 happily. You don't have to have the lawyer do all the work just pay them to review the loan docs so you know your not getting screwed over. If you tell a mortgage lender that you have an Attorney that will be reviewing any and ALL loan docs the chances of you getting another bad loan is little to none.

I've bought and sold several pieces of property and I would NEVER sign a legal doc without my lawyers approval FIRST.
 
#5 ·
I've bought and sold several pieces of property and I would NEVER sign a legal doc without my lawyers approval FIRST.
Good advice unless you understand what you are about to sign. The only document that I didn't understand and had to have a lawyer review was a labor contract.

If htn did wind up getting something he wasn't expecting, something shady must have happened like you said.

Anything to make a quick buck.
 
#6 ·
If you are able to get a recommendation for a good mortgage broker, I would look into that. Shopping around on your own can be very tedious and you'll get mixed answers. A lot of times a mortgage broker may be able to get you a rate that's lower than what you could get yourself because of a business arrangement. Kind of like how travel agents have access to flights and packages we normally can't find ourselves.

Definitely get a fixed rate instead of an ARM, especially if this is your permanent home and not something you're just gonna flip. Second, if you have the extra money, points are always good. Why? Because you can write it off on your taxes AND points up front will almost always lower your rate. So, money up front will lower your payments in the long run.

If you aren't good with legal docs, a lawyer is a good idea. Read everything before signing and if you have any questions, ask your lawyer or the brokerage attorney before you sign. Unless they are really shady attorneys, they won't lie to you, but they will likely try to rush you along. Don't be afraid to slow things down and get everything answered to your understanding. It is their job so don't let them bully you. They won't lie because it would be considered fraud.

Good luck!
 
#7 ·
I totally agree with the lawyer.. get one.. a house is an extremely expensive investment..and probably the biggest purchase you will ever make.. so this is one of the only times I have had a laywer. I don't understand how you got a variable interest rate to begin with.. didn't they tell you that when you said ok and signed? this is precisely why you need a lawyer.
 
#9 ·
Ultimately you don't want points unless you are planning on claiming that interest on your taxes for the following year.

I think you might have been referring to closing costs when you say that they rolled them into the loan.
 
#10 ·
I am a bit weird... When it came to buying a house, I just went to two banks and one mortgage broker, got three offers, spent some time to learn about the terms and compare the offers, played them against each other and went with the best one.

I would only blame myself if I hadn't read the papers, not considered what "adjustable" means, and overpaid on fees that the Mortgage broker invented the night before.

Isn't it like going out there and buying a car? Of course the dealer wants to give you the worst deal (get the most money). Would you hire a lawyer to go with you to buy a car? Same thing with a mortgage. Of course the broker wants you to get the deal where he makes the most. That's natural.

Spend some time reading the fine print and understand what all the points and fees are, don't hesitate to ask lots of direct questions to the loan shark, make sure you know about your personal cashflow and whether you can afford the payments, don't sign anything before you compared offers and clearly understand what you are getting into.
 
#11 ·
Just like planted tanks, I think the more time you spend learning about housing mortgages the better you will be off. You will understand how everything works better and make a good educated opinion on the matter yourself. But just my humble $0.02. Hope everything goes well w/ you!
 
#12 ·
Not to derail, but sort-of on topic: Can anyone suggest some good resources to learn about loans, mortgages, refinancing, etc?

Maybe it's my engineer blood, but I feel the need to go and learn about this stuff. It's going to be a while before I own a home, but I figure it's never too early. (I'm only 20)
 
#26 ·
If you're about to graduate in this economy, I recommend looking into origami, so that you can dress up the Kenmoor box.

As an engineer, you don't need to study this stuff. You will be able to understand 95% of what is going on the first time you read the documentation, and then you can figure out the 5% you don't know.
 
#13 ·
Best source would probably be online (but check your sources), then check go old school and check the library.

I haven't taken any real estate courses in my program yet (still deciding), but it's definitely real dense material (but definitely not as dense as engineering textbooks).
 
#14 ·
One of the best things you can do before refinancing a house is making sure your credit is as good as possible- this can actually save you hundreds of thousands of dollars in interest charges over the lifetime of your loan (have you ever looked at that figure that tells how much you ACTUALLY pay over the years including interest on a 30year mortgage?? A few credit score points can turn into lower interest rates and serious long-term savings!) If you've got something showing up on your credit- take care of it before going into the loan officer!
 
#15 ·
There's nothing like a fixed rate mortgage. We re-fied in '03 for a 30 year fixed at 6% (didn't quite catch it at the bottom, but close enough,) payments are a bit lower, we double up on payments when we're flush, don't worry about it when we're not (thus knocking down principle, it's possible to have it paid off in 12-15 years this way,) and the mortgage company keeps wanting us to re-finance again or "You qualify for a $XX,XXX loan!" etc., etc.

I don't think so.
 
#16 ·
Variable interest rates aren't actually all that bad as long as you made a LT investment, either- they historically actually outperform most fixed rates; now is just a bad time b/c there were so many really bad terms combined along with them.

We have a variable rate with flexible payment options- there's a cap on how much up the rate can climb, however, and that's a good safety net. My hubby's in real estate so he had connections when it came to getting great terms for our mortgage (plus our credit was in good shape).

You do need to shop around, big time.
 
#18 ·
Variable interest rates aren't actually all that bad as long as you made a LT investment, either- they historically actually outperform most fixed rates; now is just a bad time b/c there were so many really bad terms combined along with them.
Variable rates are great in a market where houses are selling like hotcakes. It comes down to short term goals. If you know you are going to live some where for a short period of time and you buy a house in a great market where you can actually expect the equity to increase, then going with a fixed rate makes sense. The only caveats are that you need to realize what the payments will in the event you reach the cap, and you need to be realitively certain that you can get out of it quick if you need to. They can be very dangerous if you aren't careful. Having a spouse that works in realestate helps because he should have a pretty good idea of the market in general. He probably also has an inside track towards selling the house if necessary.

I actually just refied my house last year to drop my PMI and get a point shaved off my intrest rate (30 year fixed). Good thing I acted. I might be able to get a better rate now, but the house might have apraised for less and I would still be stuck with the PMI. I am either lucky when it comes to making decisions in the nick of time or I have a knack for it. Probably just luck.
 
#17 ·
I just refinanced through Bank of America. If you've got good credit they offer simple interest loans with very very low points (even 0 if you have a relationship with them) and for me I was able to get them to wave the application fees and such since I bank there. But that was after I shopped around. Even though I bank there.. I still shop around. I shop my car insurance too every time it comes up. Saved me a bundle. I think most people don't shop on things like that... so insurance and mortgage companies just keep raising rates on you...until you call them on it. I live in a small town and my local insurance broker doesn't exactly like me.. becuase I tell EVERYBODY where I get my rates. And it's not from him. LOL.
 
#19 ·
Thanx fellow members for all your inputs. I just found a very good rate of 5.25 with 0 discount from some company in California. This may sound too good to be true so I'm just waiting for the documents to come home to verify that this company is legit. I had to pretend I was my dad the whole time....especially the part when they asked for his birthday and I forgot my dad's birthday :hihi: :icon_lol:
 
#21 ·
Thanx fellow members for all your inputs. I just found a very good rate of 5.25 with 0 discount from some company in California. This may sound too good to be true so I'm just waiting for the documents to come home to verify that this company is legit. I had to pretend I was my dad the whole time....especially the part when they asked for his birthday and I forgot my dad's birthday :hihi: :icon_lol:
The information/rates you get based on your dad's info will be completely useless to you unless he is actually buying this house for you? Otherwise, the interest rates that will be applied to your mortgage will be based on your credit history, not your father's credit. And age factors into that.
 
#20 ·
My wife and I are in a very similar situation. First house, bought in CA in '05 and it goes variable in about 2 months. We have decent income, so they say we don't qualify for the rate freeze. We're looking into other options, as an actual re-fi is out of the question, since the house value has dropped so much.
Just look high and low for every possible option and if nothing comes up, the only bet may be to suck it up and ride the wave...hope the economy gets better in a year or two.

I do like the idea of hiring a lawyer next time though -- do it!
You were probably, like we were, antsy and feeling rushed, so you just signed it without fully understanding everything.
Keep shopping around and I'm sure something will come up!
-Ryan
 
#24 ·
One thing you have to keep in mind about your refinance is it all is driven off the appraisal of the house. I went thru my local bank, thru a person that I am friends with and can trust. Thru them, they only will lend 80% of the homes value. You do not want to go with someone that will loan you 100% of the value of your home because of what is going on now, home values are dropping below what people borrowed and when they try and sell they still can't pay their mortgage off. Also, do not go with a variable rate as you have found out. Find someone close that you can trust so if things go bad, you can walk thru their door to speak to them and not have to try and call and be put on hold. Also, ask questions. If you don't understand something, ask until you do.
 
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