Refinance Question (new to this)

[Anonymous]

Update:

She agreed to creating a list and only applying to TWO lenders. I suggested Cap1 since she has accounts with them however their refi minimum was 7500 and she only owes a little under 5k.

She has an account with wells fargo (Checking and secured card) so we applied with them.

We also applied with NFCU. 

Neither gave an on the spot approval.

Wells Fargo said they would contact her for more info and NFCU said they would make a decision within 1 hour

crossing my fingers!

[Anonymous]

It also helps what car you're shopping for as well.  She most likely won't qualify for the 0% financing deals so she can shop around for the cars with the highest cash rebate offers.  These are mostly the stale models which were redesigned 4+ years ago which aren't selling as well as newer designed.  So manufacturers will offer a cash rebate to try and move these cars off the lots.  You can use these rebates to negate the negative equity of your vehicle.  So, for instance, she has to pay off $4,800 and they have a rebate on a car for $1500, the black book value(current auction value) of the car only has to be $3,300 to break even.  I'm sure a 2008 chevy malibu is still worth that much, even with alot of miles on it.

Here's a list of current rebates and incentives.

http://www.cars.com/go/advice/incentives/incentivesAll.jsp?zc=17601

[Anonymous]

LATEST UPDATE:

She was approved thru Wells Fargo with the following:

$5167 (not sure how they got this number, she only owes about 4900 but I think their minimum is $5000)

178.39 per month (she currently pays about 286)

36 months

14.74%  

APR 16.08

other than the obvious (lower monthly payment) is this a good deal? And what is the difference between the 14% and 16%?

Should she up the months to get a lower payment? 

I think the goal here is to pay about 6-8 months and then trade the car in.

thoughts?

[Anonymous]

14% is still high interest, what's her interest rate right now?

[Anonymous]

I'd wait to see what NFCU comes back with. That rate is still high. I'm not a big Wells fan - did they tell you the score they were using, if not ask them.

You really need to pull her real scores before applying to determine any ballpark rates. If her scores are high enough, a lender like DCU is a better bet, they have a rate chart and follow it. There is not enough information provided by you for us to help tell of that rate is good for her profile. Of course 14% is better than 21% but under 10% is even better........

The $5100 number is most likely the ten day payoff amount. That's the number the lender uses.

[Anonymous]

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@Anonymous wrote:

14% is still high interest, what's her interest rate right now?

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21%

[Anonymous]

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@Anonymous wrote:
I'd wait to see what NFCU comes back with. That rate is still high. I'm not a big Wells fan - did they tell you the score they were using, if not ask them.

You really need to pull her real scores before applying to determine any ballpark rates. If her scores are high enough, a lender like DCU is a better bet, they have a rate chart and follow it. There is not enough information provided by you for us to help tell of that rate is good for her profile. Of course 14% is better than 21% but under 10% is even better........

The $5100 number is most likely the ten day payoff amount. That's the number the lender uses.

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No, I doubt she asked them what score they used.

I will have her call tonight and ask them. 

Where should we pull her scores from? As I get more information I will certainly post

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:
I'd wait to see what NFCU comes back with. That rate is still high. I'm not a big Wells fan - did they tell you the score they were using, if not ask them.

You really need to pull her real scores before applying to determine any ballpark rates. If her scores are high enough, a lender like DCU is a better bet, they have a rate chart and follow it. There is not enough information provided by you for us to help tell of that rate is good for her profile. Of course 14% is better than 21% but under 10% is even better........

The $5100 number is most likely the ten day payoff amount. That's the number the lender uses.

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No, I doubt she asked them what score they used.

I will have her call tonight and ask them. 

Where should we pull her scores from? As I get more information I will certainly post

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She can pull her fico 08 scores from CCT for $1 trial (easy to cancel) but not many lenders use the 08 for auto lending or the BEST bet is to pay the money and get the 3B scores from here. That will give you a lot of different models for each bureau.  Some creditors pull the 04  (mortgage scores), some pull the auto enhanced scores and so on.  If you have those scores, we could help you with a lender that might pull the model where her scores are the highest.   It's well worth the money to get the real scores so you know where you might be starting from.

[Anonymous]

Invest the $40 and get the wide-range report from myFICO - it'll give you mortgage FICOs and auto-enhanced FICOs, which are missing from many other scoring providers.

NEVER use the scores from Credit Karma.  Those are not FICO scores, they are Vantage model scores (FAKO).

And know this:  The score that any particular lender comes up with may vary from the FICO scores on any report, even your myFICO reports.  They generally should be close, but there may be small differences if the particular lender weighs something differently when computing their score.  You'll hear all kinds of people say things like "they said they pulled my EX and it was 629, but I don't know how, my myFICO/CCT/etc score is 652!"  Lenders take "raw" scores and can apply all kinds of internal weights and manipulations to get a different result.

As for the new loan offer, yeah, it isn't great - but if the credit union can't do better, I still might take it.

It's going to cut payments dramatically, and that "freed up" cash could be plowed right back into the loan itself as additional principal payments, which will help kill off the negative equity on the car, even though that isn't terrible right now anyway.  Especially since she plans to trade it in in 6-8 months, getting the remaining unpaid principal to a minimum will let her actually benefit from the car on trade-in - if she owes $5100 on a car that's worth $4K today, and makes extra principal payments for 6-8 months, on top of paying the new lower car payment, she could effectively "kill" the negative equity entirely at just about $170/month in principal payments for 7 months.  After that, any additional principal reduction, along with any negotiated higher trade-in allowance (don't be afraid to ask for $6K on a $4K car and see if they will at least meet you at 5) just helps take down the cost of the next car, not to mention lowering the eventual LTV on that new note.

The reason I'd take it rather than keep applying for a better one right now, is that if she's determined to look at trading in/buying another car in under another year, she will want to control the number of pulls on her credit now.   Save the inquiries for when you're shopping next spring.

[Anonymous]

Yet another update (and a weird one).

NFCU needed us to send them info to fix her birthdate (I fat-fingered it).

We sent that back and didnt hear anything from them.

They called my fiance today to inform her the check was in the mail.....WHAT?!?! 

We never agreed to any terms, we never said okay to anything, they just approved the application and pulled the trigger. That's strange to me!

but!!!!

$124 per month (didnt ask her how many months they told her)

9% interest!