topic Re: Refinance Options? in Mortgage Loans

Refinance Options?

Booner72 — Thu, 02 May 2013 21:16:43 GMT

We bought our house for 150K 8/2011. We pay 4.75% interest - FHA.

I would think my house would appraise for 180 - 190K now. We purchased a bank owned and it was a very good deal. We are putting on a new roof and a new driveway.

What are my refinance options, if any, that would save money in the long run that wouldn't require me bringing money to closing?

My guess is nothing.......I know if I do an FHA streamline the PMI changes June 1 and the MIP has already changed. Is there a conventional loan option?

I think this might be considered a dumb question but if there is something I can do then I would like to do it. Our credit scores are good.

Thanks!!!

Re: Refinance Options?

Anonymous — Fri, 03 May 2013 03:20:47 GMT

BOONER! Remember that time we closed about 6 months apart? Good times.

Ask your realtor to run comps for you, if you haven't already. Mine did, and I estimate a value around 199k for my house and I owe about 152k on it. I've been looking into this, too. I am working on getting my house appraisal-ready to maximize my options and seeing if there is more than one loan officer I'd consider working with.

I've been playing with this site https://umcu.mortgagewebcenter.com/Default.asp?bhcp=1 to get an idea of what to expect. I also met with several mortgage officers. Here's what I've basically found out

1) My original appraisal, 2 years ago, was for 148k. I honestly expect its gone up significantly since then, since the market has picked up significantly.

2) If I want to go conventional, and I do, my house needs to appraise for about 165k to get me to 95% LTV, and for about 197.5k to get me to 80% LTV. Some lenders do PMI if you have good credit, some do not.

3) If I appraise for less than 165k, I have 2 FHA refinancing options. One is traditional, with an appraisal, and the other is streamline. I've been told conflicting info about if I can roll in closing costs. Apparently, right now banks will pay your closing costs if you do an FHA refi with them and are willing to pay a slightly higher rate - my current lender guessed something like 3.25% regular interest rate if I came up with closing costs, 3.5% if they did. If you do streamline, they use your original appraisal as the value of the house (I am suffering with a house value being treated as $128k because it was the sales price). If you do the non-streamline, they use your new appraisal as the value of the house. Given the PMI / MIP situation, I still would rather go conventional even if I'm paying PMI on a conventional.

4) Not all lenders offer all of these options. I believe UMCU is my main local option that does.

5) Loan officers can be a little difficult to get a hold of / deal with. I've found that the ones I've talked to aren't hungry enough to be good about pursuing you, and my realtor isn't taking new clients right now, either. I've now decided to not deal with my CURRENT mortgage company for my refi because they don't have the answers I seek available easily and aren't great about getting back to me even though THEY called ME the first time.

6) It's not considered a cash-out refi if you're just raising the balance to cover closing costs.

7) Play with the rate quotes on that website. Basically, start with listing your balance as your mortgage amount and your estimate of the appraised value, then go through the loan options and view the closing costs. When it tells you "costs required at closing", add that to your mortgage amount and do it again. That should get you pretty close. To figure out what your house would have to appraise for to get to 80% LTV, take the mortgage amount you'd need and divide it by 0.8

8) Here's a surprise - you have to re-fund your escrow account, even if you stick with the same bank. At least in this state you do. The good news is that at least you get that back from your previous bank so you have a nice influx of cash after you close. Also, if you end up in FHA-land, you get a credit for the UFMIP you paid last time. BTW, do NOT forget to declare your UFMIP on your taxes - you can deduct it for 84 months, up to 12 months/year.

Re: Refinance Options?

LisaJ — Fri, 03 May 2013 17:22:55 GMT

I'm watching this thread because I am also in the same situation--only I missed the May 2009 date by less than 4 months.

I am so frustrated by the new MIP rules and dates. Our overall income has gone down, but because I am responsible and pay my bills, there is no relief, help, program, etc., for people like me, and a reduction from our current 4.75 would make a big difference.

Re: Refinance Options?

Booner72 — Fri, 03 May 2013 20:05:46 GMT

Hi, Mauve! Yes, I remember! It seems like just yesterday, but also forever ago. We were so lucky to buy at the right time. I don't want anything to do with FHA, really, because of the PMI. It seems like such a waste of money, you know? I had no idea conventional loans made you pay that. Your information was really helpful.

I put my email in on an online mortgage calculator and my cell phone is getting tons of calls from whoknowswhere. How did they get my PHONE NUMBER from my EMAIL? SHEESH. The quote I got back said my payment would go down by over 300 a month, 3.75%, and no PMI was quoted. I need to be at 187.5 for LTV of 80%, and I owe 146-something right now. Once the new roof is on, we might have a chance at that number, though I don't think quite yet. I spent quite a lot of time yesterday looking at comps, you should see what is selling out there for 170-180, nothing like our house.

I'll just keep watching the market and make my move - though we are thinking of relocating 3 hours away, back "home" after the kids are out of high school - six years or so. I know that makes a big difference on whether to refinance or not. But I don't like 4.75 when the 3's are available.

Take Care!!

Re: Refinance Options?

Anonymous — Fri, 03 May 2013 22:27:33 GMT

Check out the link I posted - to get an idea of PMI amounts on a conventional loan, play with it a bit. Once you get over the 80% LTV, the same loan amount becomes a higher payment. If you click on that payment, it will tell you how many payments at that rate and then how many payments at the next one down.

$300/mo is $3600/year. You will absolutely get a benefit from refinancing long before you intend to move.

Don't "pay" for calculators with your personal info! I mean "I suggest avoiding those - they're just ways to get your info to spam you"

Try bankrate.com - http://www.bankrate.com/calculators/mortgages/refinance-calculator.aspx

https://memberfirstmortgage.mortgagewebcenter.com/ResourceCenter/Calculators/DisplayCalculator.asp?Q1393=MortgageRefinance&PID=78

Re: Refinance Options?

Booner72 — Sat, 04 May 2013 15:47:05 GMT

Good news on this end. My neighbor who is an agent said we could easily get the 189500 needed to be at 80% LTV for a refi. An online quote said my payment would go from 1151 to 961. Interest from 4.75 to 3.5. That's taking 2000.00 or so to closing. Then an appraisal fee. I dont want to take 2grand to closing. We also will only stay here six years (maybe longer, who can predict that kind of thing anyway?)

Advice, thoughts? How do I get out of the 2k? If I got the appraisal # higher, could I get some cash to pay off my cc or car?

What credit score is needed for the best interest rate? My lowest score is EQ 690 - TU 720 - EX ??????????????????????? (Those should raise significantly when cc's are zero'd out and report this month).

THANKS THANKS!

Re: Refinance Options?

Booner72 — Sat, 04 May 2013 15:47:58 GMT

@Anonymous wrote:
Check out the link I posted - to get an idea of PMI amounts on a conventional loan, play with it a bit. Once you get over the 80% LTV, the same loan amount becomes a higher payment. If you click on that payment, it will tell you how many payments at that rate and then how many payments at the next one down.

$300/mo is $3600/year. You will absolutely get a benefit from refinancing long before you intend to move.

Don't "pay" for calculators with your personal info! I mean "I suggest avoiding those - they're just ways to get your info to spam you"

Try bankrate.com - http://www.bankrate.com/calculators/mortgages/refinance-calculator.aspx

https://memberfirstmortgage.mortgagewebcenter.com/ResourceCenter/Calculators/DisplayCalculator.asp?Q1393=MortgageRefinance&PID=78

Mauve, always the helpful lady! Thank you!

Re: Refinance Options?

Anonymous — Sat, 04 May 2013 19:36:23 GMT

If you don't want to bring money to closing, it's pretty standard to roll those costs into the loan. That'll raise the balance on it. I think there's some sort of hitch with getting cash out, but I don't remember what it is. For my own peace of mind, I think of it like this I'd rather not take my unsecured credit card debt and turn it into house debt. Plus, the extra money I'm keeping with the lower payment will pay my cards off faster.

Re: Refinance Options?

pdog661 — Tue, 07 May 2013 03:25:51 GMT

@Booner72 wrote:
Good news on this end. My neighbor who is an agent said we could easily get the 189500 needed to be at 80% LTV for a refi. An online quote said my payment would go from 1151 to 961. Interest from 4.75 to 3.5. That's taking 2000.00 or so to closing. Then an appraisal fee. I don't want to take 2grand to closing. We also will only stay here six years (maybe longer, who can predict that kind of thing anyway?)

Advice, thoughts? How do I get out of the 2k? If I got the appraisal # higher, could I get some cash to pay off my cc or car?

What credit score is needed for the best interest rate? My lowest score is EQ 690 - TU 720 - EX ??????????????????????? (Those should raise significantly when cc's are zero'd out and report this month).

THANKS THANKS!

Hi,

You could go conventional, and roll all cost into the new loan. If you have over 10% equity some lenders will allow you to roll the cost of the PMI payment into the loan.

I did this with our home. We only had 12% equity and we were in an FHA 5.25% loan. We re-fied conventional, and rolled the PMI into the loan. Our payment moved from 1659 a month to 1293 a month. Our loan increase roughly 8K though.

If you home appraises for 190K you have 22% equity. You would only be able to cash out 3800 at close. I do not see this being worth the headache or the hassle.

Re: Refinance Options?

Anonymous — Fri, 10 May 2013 18:39:57 GMT

Lisa: sounds like you and I are in the same boat! I refinanced in September 2009, so missed the deadline for FHA changes by 4 months, too. but, I talked to a local banker this week about refinancing again. I'm @ 4.875% and have about 18% equity from the appraisal that was done in 2009. But, I think my value has gone up...at least, the county thinks so because their valuation is $5k higher than the appraisal. the local banker quoted 3.50% on a conventional loan. 30 years, but $2,000 in closing costs. I can roll that into the loan amt, but not sure if I want to do that. That would put my PMI at about $35/month, down $25 from what I'm paying now. and, the overall payment would go down about $140/month. right now, I haven't decided whether to move forward or not. Still crunching numbers. I remember how excited I was when I did my first refi...it was april 2009 and my mortgage FICO was 621...you needed 620 to qualify! Now, my fico and fako scores range from 700 to 772. Thank goodness it's the fico that's 772.

But, I agree with you...you try to do good, pay your bills on time (which leaves no $$ for food or gas), but when you try to get some relief, all doors are slammed in your face. Hang in there...check with some credit unions and local banks for information. they don't charge to answer general questions, thank goodness! you may have to pay PMI if you go conventional if your equity is less than 20%, but at lower rates, and you can drop it when you reach 78% LTV. I think FHA is now PMI for life of the loan...yuck!

Re: Refinance Options?

Booner72 — Sat, 11 May 2013 01:26:09 GMT

@pdog661 wrote:
@Booner72 wrote:
Good news on this end. My neighbor who is an agent said we could easily get the 189500 needed to be at 80% LTV for a refi. An online quote said my payment would go from 1151 to 961. Interest from 4.75 to 3.5. That's taking 2000.00 or so to closing. Then an appraisal fee. I don't want to take 2grand to closing. We also will only stay here six years (maybe longer, who can predict that kind of thing anyway?)

Advice, thoughts? How do I get out of the 2k? If I got the appraisal # higher, could I get some cash to pay off my cc or car?

What credit score is needed for the best interest rate? My lowest score is EQ 690 - TU 720 - EX ??????????????????????? (Those should raise significantly when cc's are zero'd out and report this month).

THANKS THANKS!
Hi,

You could go conventional, and roll all cost into the new loan. If you have over 10% equity some lenders will allow you to roll the cost of the PMI payment into the loan.

I did this with our home. We only had 12% equity and we were in an FHA 5.25% loan. We re-fied conventional, and rolled the PMI into the loan. Our payment moved from 1659 a month to 1293 a month. Our loan increase roughly 8K though.

If you home appraises for 190K you have 22% equity. You would only be able to cash out 3800 at close. I do not see this being worth the headache or the hassle.

Yes but what if I don't care about cashing anything out and I am looking for a lower payment and lower interest and no PMI?