topic Re: SUBPRIME REFINANCE in Mortgage Loans

SUBPRIME REFINANCE

Anonymous — Thu, 04 Oct 2007 15:23:51 GMT

I'm currently in a 80/20 ARM subprime loan and my 80 loan is going to adjust 12/08. I have a 24 month prepayment clause (1yr in my home 10/31/07), and if I refi now will pay aprox $5,455.00 in penalties for both loans (prepayment penalty/6 months interest). With the potential of a recession, should I refi now or take my chances of refi after my prepayment clause is gone? I'm leaning toward taking my lost now, because if we go into a recession (which I feel we are) I feel that I may be upside down and won't be able to refi (currently have aprox $5,000 in equity). I would greatly appreciate your opinion. Thank you

Re: SUBPRIME REFINANCE

Anonymous — Thu, 04 Oct 2007 18:35:31 GMT

Its going to be VERY hard to do a 100% CLTV loan going subprime.

WKYLE wrote:
I'm currently in a 80/20 ARM subprime loan and my 80 loan is going to adjust 12/08. I have a 24 month prepayment clause (1yr in my home 10/31/07), and if I refi now will pay aprox $5,455.00 in penalties for both loans (prepayment penalty/6 months interest). With the potential of a recession, should I refi now or take my chances of refi after my prepayment clause is gone? I'm leaning toward taking my lost now, because if we go into a recession (which I feel we are) I feel that I may be upside down and won't be able to refi (currently have aprox $5,000 in equity). I would greatly appreciate your opinion. Thank you

Re: SUBPRIME REFINANCE

Anonymous — Thu, 04 Oct 2007 20:26:19 GMT

I forgot to mention my transunion is 643, experian 651, and 663 equifax currently. Would that still consider me subprime?

Re: SUBPRIME REFINANCE

Miner — Thu, 04 Oct 2007 21:03:04 GMT

Perhaps I'm missunderstanding your post, but you have $5k in equity but to refi you will have to pay $5455 to get out of your current loan and then you'll have to pay the cost of of the new loan. It seems like you don't have to equity to do this so I don't see your incentive to do this refi. Also, even if you have a higher rate, it will take some time for that difference in rate to add up to that $5455.

If you truely believe that the economy is going to go into recession, then mortgage rates should drop soon after it starts (if not before) and thus when your rate adjusts when it unlocks, your new rate should adjust lower. Thus you have no reason to refi now.

Re: SUBPRIME REFINANCE

Anonymous — Thu, 04 Oct 2007 21:22:24 GMT

Thank you Miner for your reply. If I were to refi now my prepayment penalty would be aprox 5455.00. However, I'm not very fluent on mortgages or the outcome of a recession. I just read about all these horror stories of folks in subprime ARM loosing there homes, and I'm just trying to be proactive for my own peace of mine. Thanks again!

Re: SUBPRIME REFINANCE

shawnette — Fri, 05 Oct 2007 00:33:46 GMT

I am in sort of the same situation, except I have enough equity to do the refi now if I want. I just don't want to pay the penalty, so I'm waiting. I was told by my mortgage company that I should start the process about 1 month out and close a day or so after the penalty period is up. That way the rate doesn't have time to adjust and I won't have to pay the penalty.

Re: SUBPRIME REFINANCE

Anonymous — Fri, 05 Oct 2007 01:57:11 GMT

A big factor is how much it will adjust - and can you absorb it. One thing I would consider looking into is both state and federal programs that are coming out to deal with these type of loans - and perhaps waiting u til they are in place . There may even be a 100% FHA loan. So if you can hold in there it might be worth it.

Re: SUBPRIME REFINANCE

Anonymous — Fri, 05 Oct 2007 12:55:11 GMT

Thank you for your comment!

Re: SUBPRIME REFINANCE

ShanetheMortgageMan — Fri, 05 Oct 2007 19:30:00 GMT

With the employment figures that came out this morning (110k vs 100k consensus) & the revision to last month's employment figures (89k from -4k) it definitely isn't showing signs of a recession.

Re: SUBPRIME REFINANCE

Anonymous — Fri, 05 Oct 2007 19:39:33 GMT

Yes, I read that this morning and that is very comforting! I hope the trend continues.