Do I need a different bank?

[Fixitnow]

Hi,

With rates so low I decided it was time to refinance.  I had the bank pull my scores and they were 639 (EQ), 650 (EX) and 669 (TU).  I went throught prequalification process and locked in a rate at 4.875.

Later that day the bank calls back and says that in order to get to the secondary market I have to pony up $5,000 to get a rate of 5.5%.  On top of that the banker said the scores need to be up over 700 for all in order to not have to pay the $5,000.  I decided to pay off all the credit cards instead hoping that will bump up the scores.

My credit wasn't so strong in 2004 but there have been no lates or anything in over 4 years.  The banker didn't exactly understand why the scores were so low - they said it didn't make sense because there was nothing negative on there.  No real advice on how to boost them either.

Is what the banker telling me correct?  Do all need to be over 700 to qualify for secondary market or do I need to go somewhere else?  Is it that tough to get on the secondary market right now?

[DallasLoanGuy]

Loan amount?

Down payment?

Conventional, I assume?!?!?!

[Fixitnow]

All good questions - Sorry I didn't put that in there.

The first on my house is $124,000.  The 2nd is for 14,000.  I feel fairly  sure that the appraisal will be around $200,000 so I am well under the 80% mark.

This would be a refinance.  I make around $95,000 a year.  I wanted to do a cash out construction loan to do an addition but I was told that would work because they couldn't do the loan until the project was completed.  That and I didn't qualify for that.  I did qualify for the basic refinance, and then a few hours later I didn't unless I paid $5K to get it on the secondary.  The loan would be for about $140,000.

Getting refinanced would take my current rate from 7.25 to under 4%.  That is a huge swing!!!

Message Edited by Fixitnow on 01-17-2009 05:32 AM

[DallasLoanGuy]

Have they explored FHA?

 The LLPA(loan level price adjustment) is 2.25% for 80% with 650 fico. Nowhere near $5K. So you have been lied to. Unless I am missing something.

Sounds like you need a second opinion.

Can you do 15yr loan? There is no pmi on 15yr loan with more han 10% equity. 30yr fha will have pmi for 5yrs regardless.

Where are you getting this "under 4%" stuff?!?!?!

[Fixitnow]

DallasLoanGuy - I have read your posts on here - You are very knowledgeable - Thanks for the input.

I do not believe they explored FHA - which I think may need some consideration.

What do you mean when you say LLPA?  How does that affect me?

I meant to say 4.875.  I just don't get it.  I go from being pre-approved and locking in at that rate and then a couple of hours later I am not approved.  She says it is all done via computer and they don't actually talk to anyone which I find hard to believe.  She said in order to get it on the 2ndary market I would need to buy in at $5,000. 

Maybe one of the better questions to ask is - What should I be looking for in a mortgage loan officer?  Specific companies, accreditions? 

[DallasLoanGuy]

LLPA are rate adjustments for risk. so, we take the ltv and the score and look up the rate adjustment in a matrix.

2.25% of loan amount is the delivery charge to fannie mae. therefore, all of the banks are charging that to the customers.

LLPA is going up any day now. i think some lenders are starting to use new matrix.

620+ doesnt have them on fha