topic Re: Good mortgage or bad mortgage loan? in Mortgage Loans

Good mortgage or bad mortgage loan?

rjbcal — Tue, 24 Mar 2015 16:09:05 GMT

Hi all,

I am in the midst of refinancing my condo and need your advice. I have read hundreds of web pages, magazine articles; watched YouTube video from mortgage brokers, real estate agents, and common folk; read Yelp revies, BBB rankings, and so on and on. And I cannot figure out if this is a good loan refi. Would love to hear what you think about this offer:

Currently mortgage:
FHA 3.75%, 30-year fixed loan, paying $262 PMI (primary driver for the refi). Payments $1734 approx. on a condo in southern California.

(I was told to add the $262 PMI into my interest rate to get the "true" monthly rate I was paying....not even sure how to begin doing that)

New mortgage offer:

Conventional loan, $10k cashout, no PMI, 4.75% 30-year fixed. New payments $1,615 approx.

1) BIG CHANGE: due to an error, my credit score which was borderline average-good plummted -30 points when a creditor reported me to the credit agencies as
having a missed payment. The creditor IS removing the missed payment (since the card was paid off). but it will take a month or two for my score to recover).

2) The new mortgage lender, Intelliloan, stated that I can refi again at no cost, during the next three years to get an even better interest rate when my credit score
improves.

I was always told when you refinance anything, you should always go for a drop in interest rate. But I dunno......

Any thoughts from anyone??? Thanks!

Re: Good mortgage or bad mortgage loan?

StartingOver10 — Tue, 24 Mar 2015 18:23:05 GMT

When did you take out the original FHA mortgage? Is the MIP you are currently paying eligible to drop off in the future or does it stay for the life of the loan? The answer to these questions will help in any anslysis. What is your current mortgage balance and what is the value of your condo?

Re: Good mortgage or bad mortgage loan?

Anonymous — Tue, 24 Mar 2015 18:25:04 GMT

How much did you finance on the original loan? And what amount on the refi?

Re: Good mortgage or bad mortgage loan?

sccredit — Tue, 24 Mar 2015 18:25:31 GMT

@rjbcal wrote:
Hi all,

I am in the midst of refinancing my condo and need your advice. I have read hundreds of web pages, magazine articles; watched YouTube video from mortgage brokers, real estate agents, and common folk; read Yelp revies, BBB rankings, and so on and on. And I cannot figure out if this is a good loan refi. Would love to hear what you think about this offer:

Currently mortgage:
FHA 3.75%, 30-year fixed loan, paying $262 PMI (primary driver for the refi). Payments $1734 approx. on a condo in southern California.
(I was told to add the $262 PMI into my interest rate to get the "true" monthly rate I was paying....not even sure how to begin doing that)

New mortgage offer:
Conventional loan, $10k cashout, no PMI, 4.75% 30-year fixed. New payments $1,615 approx.

1) BIG CHANGE: due to an error, my credit score which was borderline average-good plummted -30 points when a creditor reported me to the credit agencies as
having a missed payment. The creditor IS removing the missed payment (since the card was paid off). but it will take a month or two for my score to recover).

2) The new mortgage lender, Intelliloan, stated that I can refi again at no cost, during the next three years to get an even better interest rate when my credit score
improves.

I was always told when you refinance anything, you should always go for a drop in interest rate. But I dunno......

Any thoughts from anyone??? Thanks!

I would wait until the creditor fixes the reporting and then have a rapid rescore done.

Re: Good mortgage or bad mortgage loan?

frugalQ — Tue, 24 Mar 2015 19:00:47 GMT

you can get a letter from the creditor regarding the error and that they will correct it with the credit bureaus. your lender can use that and work with the bureaus to have them update it immediately and then do a rapid rescore.

Re: Good mortgage or bad mortgage loan?

rjbcal — Tue, 24 Mar 2015 19:30:10 GMT

Thanks! Already in the works...

Re: Good mortgage or bad mortgage loan?

rjbcal — Tue, 24 Mar 2015 20:23:03 GMT

Sorry -- should have included that information:

Original loan was $265k in 2009. Current loan is $243k. Refinanced in 2013 Property was appraised at $370k three mos. ago, and est. value using MLS is $395k. I was told the MIP falls off after five years and with 22% equity stake based on the original loan amount but not new appraisd value (not sure how the refi in 2013 impacts the MIP status regarding the 22% and five year termination).

Thanks

Re: Good mortgage or bad mortgage loan?

rjbcal — Tue, 24 Mar 2015 21:17:50 GMT

Sorry -- should have included that information:

Re: Good mortgage or bad mortgage loan?

StartingOver10 — Wed, 25 Mar 2015 00:22:21 GMT

@rjbcal wrote:
Sorry -- should have included that information:

Original loan was $265k in 2009. Current loan is $243k. Refinanced in 2013 Property was appraised at $370k three mos. ago, and est. value using MLS is $395k. I was told the MIP falls off after five years and with 22% equity stake based on the original loan amount but not new appraisd value (not sure how the refi in 2013 impacts the MIP status regarding the 22% and five year termination).

Thanks

I think you over rode the first loan when you refi'ed in 2013. So the terms of your 2013 loan apply now. Since you refinanced in 2013 - was it refinanced to a FHA loan? I don't remember when the MIP became the life of the loan -but I know it was sometime in 2013. If the new MIP rates were in effect at the time of the refi and you refinanced less than 90% LTV, it is possible your MIP will drop off after 11 years. Read your note to see if it is addressed there. That would make a material difference in your decision.

Your current LTV is low, I wouldn't refinance unless there was going to be a material difference in your rate/payment. Have you shopped other lenders to see if you can get a better conventional rate?