VA Refi Proposal

[VALoanMaster]

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@Anonymous wrote:

P.s. My thinking on the interest rate unknowns in future are this: If in 6 mos. interest rates have spiked up, I'd still be in much better shape with his first refi which is a closing costs paid by lender deal and about 2.5 points lower than what I am paying now... Thanks again!

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The best approach is to get your scores up before doing a refi. This is going to save you thousands of dollars in closing costs & interest over the life of the loan.

You really want to work with a lender that will find a viable solution to your issue, not a lender that fiinds a way to line his pockets by getting you to do 2 loans with them.

I would run a what if simulator to see what options are available to get your score up to a 620. I can do VA & FHA loans down to a 580 score BUT the client gets a better rate & 620 and up so I always try to get the scores up first.

[Anonymous]

Good advice, Master.

A loan shopper with a 590 is at a serious disadvanage, and people will take advantage.

And to all above I greatly appreciate your time and counsel - I'm so glad I found this forum.

P.s If you all know a lender that specialises in VA refi's for bozos with bad credit who will not impose punitive terms and conditions please let me know here or through a PM. Thanks again.

[medicgrrl]

What rate is he quoting you based on you paying (rolling in) closing costs?  What rate is he quoting you if he pays closing costs?  He's not paying the closing costs...you are.  You're paying them through a higher rate.  I understand that you have repairs etc, but it may still be worth it to take the lower rate and pay (roll in) your closing costs and not worry about doing the IRRRL in 6 months.  It's a VA loan, there's only so much they can jack the rate up due to credit.  I think he's just trying to get 2 loans out of you by showing you a higher rate with him paying closing costs and then comparing it to the IRRRL (which typically has lower costs anyway due to less requirements of the loan).  I understand this philosophy when a broker compares a subprime loan now to a conventional down the road when credit is better, but he's comparing VA to VA.  

[Anonymous]

He first offered a 15-year VA cash-out @ 4.125 with me paying $4k closing costs. That would pay off my $52k balance and get me $15k cash for home repairs and upgrades.

His next offer was to do a 30-year fixed with no closing costs @ 5.1 for 6 months, then move to the IRRRL (again with no closing costs) at 3.75.

So I get the much needed cash now, and a significantly lower APR for the long haul.

EDIT: And I do get the part about the higher interest rate being a tradeoff for the no closing costs. He was clear about that from the beginning. But as the plan is to stay in the loan for only 6 months that seemed like a good tradeoff.