Refi Question comparing offers

[Anonymous]

Background info: I am looking to refinance my home flexline that is an Adjustable rate loan into a fixed rate loan. I am shopping around for offers. I have a loan of about $64K with adjustable rate at 5.75%, it increased 3 times within the past 7 months, so want to refi. My plan is to have the house paid off in the next 4-5 years. I am going to be makeing $1300/month payments starting about this september is the plan. My pulled scores have been 710-715.

We bought the house in 2009, got appraised for $81,900 after we fixed up just the interior. Since then we have done new vinyl siding in 2015, new roof/windows with lifetime transferable warranty in 2016. New interior doors and new front porch with composite decking 2017. The recent home sales within 1 mile of my home range from $50K-$90K for compareable homes...seems most of the higher end have newer touch ups done to them. So that is the biggest play is expected home value. I have no plan to pay points because of how fast I plan on paying this off/

I have one offer from Royal United:

They are going to do the loan at 68K so I have no out of pocket closing costs for conventional mortgage (Closing Costs would be about $4500). Basing quote off of appraisal value of $72K to be conservative. 15 year fixed rate at 4.125% this is not locked in until home is valued. No points currently. Mortgage insurance of $37 per month, which falls off once I pay the mortgage down to 78% LTV. This is with insurance/taxes escrow with estimate monthly payment of $753. Appraiser fee $455.

I have another from Quicken Loans: Possible FHA loan unless they get good LTV then will go with conventional. Closing costs about $3000 for either loan. 15 Year Fixed rate 4.375 locked in today if I have them go ahead. No points. If FHA loan would be $1200 fee. Appraisal fee $500. Unknown about mortgage insurance atm....This is with insurance/taxes escrow, Estimated monthly payment $785.

I am not good at mortgages and what sounds like the better deal...please help.

[H-B]

Your interest rate seems higher for 15 year fix. Did you talk with your own lender or bank?  You have smaller loan amount so if your closing  cost will be higher and you are planning to pay in 5 years your saving won't  be huge. Refinance is all about calculations not about interest rate only. 

[StartingOver10]

My experience with Quicken Loans is poor.  I didn't apply to them directly. I am a Realtor and have found that Quicken will issue "pre-approvals" easily - but fail to close. You don't find out until very late - like the week before closing - that the file is denied. This to me is the sign of a poor lender.  Why?  Because when you speak to the LO initially and provide your paperwork the LO should be able to tell you right up front whether the deal is doable or not. And s/he should be accurate - unless the information you provided is inaccurate or changes during the process.  I have seen many deals fail to close with QL - not due to the borrowers qualifications, but due to the lender's inability to process the loan correctly. Sometimes it is the borrower, but more often than not, it was QL. 

What happens with Quicken Loans AND most of the big box banks (Chase, Wells Fargo, BOA etc) today, is they have substituted knowledgeable, trained loan officers with "application takers" that have no idea what they are doing. I see it all the time. This is not each and every LO at QL or big box banks, but a large number IME. The approvals that fall through are a much larger percentage with these type of lenders than if you go to a mortgage lender that specializes in mortgages only.  

Go to a mortgage lender that originates, underwrites and funds their own loans. All they do is mortgages - not credit cards or car loans or bank accounts. They know what they are doing as a general rule. 

As H-B points out, your interest rate seems very high.  Check with several lenders/LO's.  I can refer two to you that are excellent. I will pm you their information. Naturally, there is no obligation to use them.....just thought you could use a good LO. There are several on this board that are excellent, but I can only send you info on the one's that I have used personally and/or professionally. 

[Anonymous]

Thank you for the advice.

To answer the question, yes I have checked with my current bank that has the current loan and they offered a slightly worse APR with the same kind of terms as the other two.

It is a smaller loan, I am not sure if that affects it and/or location etc. My scores that have been pulled have been 710-715. The only real thing up in the air is the LTV. I am not someone who can look at home sales and tell you exactly what my home is worth. My step mother is a realtor in PA, and can't even really tell me. There is $40K disparity between homes that have recently sold within my area within a mile of my house that are compareable in sqft/lot size. Some of the questions about PMI and the like are really big question marks until I can get a number from an appraiser...

Quicken loans kind of put me off with a lot of uncertainty in what they were thinking of doing. Maybe this or maybe this kind of thing. I decided no on them.

Royal United is a mortgage company only and I did some research into the company, which didn't look all bad from reviews.  The LO guy on the phone indicated he is my contact peson from start to finish. There was concern about rate hikes with the Fed meeting yesterday, but he indicated that at this time my offer is still the same.

Maybe I am mulling this over too much considering that i am really getting to pay this off within 5 years...