Mortgage Loans

[DesertLife]

[[Please see my latest reply two down for latest info]]

Hello,

15 Months ago I purchased my first home using a VA loan, and my first payment on that loan began 12 months ago. I would like to refinance to get a lower interest rate. With penfed showing rates like this:

Rate          Points        APR

3.250%	0.000	3.552%
3.125%	1.375	3.541%
3.00%	2.625	3.591%

I figure over the lifetime of the loan I could save thousands of dollars. Can anyone give me some advice before starting an application? My credit score has improved somewhat since taking a hit from the inquiries last year for the primary mortgage as well as from applying for credit cards this past summer.

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Here are the details of my loan:

Loan type:

30 Years VA

Original principal balance:

$147,173.00

Current principal balance:

$144,513.00

Current interest rate:

4.750%

Remaining term:

28 years, 10 months

Escrow Balance:

$527.30

Year-to-date interest paid:

$5,182.64

Year-to-date real estate taxes paid:

$2,352.46

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Here is information I found on VA IRRRL's

The VA Streamline Refinance (IRRRL) Loan

The Interest Rate Reduction Loan allows you to refinance your current mortgage interest rate to a lower rate than you are currently paying. The Streamline loan is extremely popular because of its ease of use: once you have already been approved for your initial VA purchase loan, it is relatively simple to lower your interest rate and experience considerable savings. In most cases, a loan officer or lender with expertise in VA loans should be able to complete the loan within a month’s time in most cases.

VA refinance closing costs can be rolled into the cost of the loan, allowing veterans to refinance with no out-of-pocket expenses. Sometimes it is also possible for the lender to take the brunt of the cost in exchange for a higher interest rate on your loan.

In order to qualify for a VA Streamline, you must meet the following requirements:

• Be current on your mortgage with no more than one 30-day late payment within the past year.
• Your new monthly payment for the IRRRL must also be lower than the previous loan’s monthly payment. (The only time this condition does not apply is if you refinance an ARM to a fixed rate mortgage.)
• You must not receive any cash from the IRRRL.
• You must certify that you previously occupied the property.
• You must have previously used your VA Loan eligibility on the property you intend to refinance. (You may see this referred to as a VA to VA refinance.)

[webhopper]

I did a streamline refi on my Fha loan. It was easy. My net out of pocket expense was only 2k due to a lender credit I received. I figured it up and ill end up saving 15k over the life of the loan.

[DesertLife]

Here's the new info. Anyone with advice, I'm still looking to do this, and hopefully close before years end. To me it seems like going with the 0 points option would be best, considering in this circumstance, the 2.875 rate will only save about $4,000 over the lifetime of the loan compared to the 3.125 rate. Any advice or thoughts on if I may be approved for this refi would be appreciated. They have a $65 fee, so I don't want to pay that plus have a hard inquiry for nothing! But, the rewards are great if I am approved, so I'm certainly leaning towards doing that soon.

Rate       Points      APR        Closing Fees        Payment

2.875%  2.250%  3.079%   $5,567.51              $598.69

3.000%  1.125%  3.115%   $3,944.14              $608.37

3.125%  0.000%  3.151%   $2,320.76              $618.15

My Equifax score is 719. I have opened revolving credit lines recently, which means I have inquiries on my report.

1 bad account on report:

Status as of NOV 2012

Date opened  MAR 2005
Date of last activity OCT 2007
Largest past balance $500
Account Type REVOLVING
Account holder INDIVIDUAL
Industry JEWELRY

Descriptions

• Closed or paid account / zero balance
• Account closed by credit grantor

Balance
Current Status

$0	Pays account as agreed

Seven year payment history
30 days late60 days late90+ days late

2 times (Oct 2007)

1 time

2 times (Feb 2007, Jan 2007)

Worst Delinquency

120+ days past due

Recent Equifax report shows 5 inquiries:

November 06, 2012	Chase
July 09, 2012	Usaa Sb
July 09, 2012	Chase Bank
July 09, 2012	Amex
July 09, 2012	Pentagon

I have these debt accounts open:

Mortgage initially taken out 7/2011 ($147,000 loan)

USAA Amex opened ($0 / $11,000 line)

AMEX BCP opened 7/2012 ($0 / $9,000 line)

Chase Sapphire Preferred opened 7/2012 ($0 / $5,000 line)

PenFed Platinum Rewards opened 7/2012 ($0 / $7,500 line)

Chase Ink Bold opened 11/2012 ($0 / $6,000 flexible spend line - not a hard limit as it's a charge card)

[MyCreditSucksTheMost]

What's your annual salary?

[DesertLife]

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MyCreditSucksTheMost wrote:

What's your annual salary?

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$76,000 Gross Annual Income

[MyCreditSucksTheMost]

 You look great!

 I'd go for the zero point option as well, Honestly the IRRRL's are some of the best refinance options in my opinion, extremely low closing cost with limited paperwork.

 $65 for an app fee is low as well, I'd say go for it, I originate loans for a living, and I'd push yours through all day.

 Good luck, and enjoy your savings.

 At worst, they may ask for an explanation letter from your inquiries in july, but most likely only november.

[DesertLife]

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MyCreditSucksTheMost wrote:

 You look great!

 I'd go for the zero point option as well, Honestly the IRRRL's are some of the best refinance options in my opinion, extremely low closing cost with limited paperwork.

 $65 for an app fee is low as well, I'd say go for it, I originate loans for a living, and I'd push yours through all day.

 Good luck, and enjoy your savings.

 At worst, they may ask for an explanation letter from your inquiries in july, but most likely only november.

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Thanks, I appreciate it! I think I will go for it and post back here about the results.

[DesertLife]

OK, I've moved forward. Please give me some feedback on this. What do you think? Should I shop around before sending intent to proceed letter?

Currently paying $767.72 Principal & Interest.

Original principal balance: $147,173.00

Current principal balance: $144,120.85

Current interest rate: 4.750%

Remaining term: 28 years, 8 months

Penfed Good Faith Estimate:

December 10, 2012

Loan Amount: $144,100

Term: 30 Years

Interest Rate: 3.00%

Initial Monthly Payment: $607.53 per month ($160.19 per month less than currently paying).

Escrow Required

Adjusted Origination Charges: $65

Settlement Services Total: 775.75 (Appraisal: $50, Tax Service Fee: $59, Premum Tax (state): $201, Credit Report: $8.75, Flood Cert Fee: $7.00)

Title Services & Lender's Title Ins: $1882.60

Pest Inspect Fee: $250

Gov't Recording Charges: $207

Initial Deposit for escrow: $1245.24

Daily interest charges: $177.66

Total estimated settlement charges: $4,603.25

[webhopper]

That looks like a great deal. Keep in mind that your current lender will be refunding you the escrow.

[DesertLife]

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webhopper wrote:
That looks like a great deal. Keep in mind that your current lender will be refunding you the escrow.

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That's great! I was thinking about that possibility and wondering if that's how that works. I appreciate you mentioning it. That will really help out in terms of making this deal happen and not really impacting savings, etc.