Refinancing Question

Guest 0.10 Dollars($)

OK. I have been talking to my Mortgage guy that I use and he told me I should go into an FHA loan. First let me give you some back ground.

I am in an adjustable loan that resets at the end of Dec 2008. If just reset off a 3 year fixed rate. Now it is at 6.75%. I owe $670000 on my first and I have a equity line of credit which is at $70000. I have no other dept except 2 car payments totaling $1100 a month. My Income is $200000+ and my fica score of 750+ maybe over 800 since I no longer have any dept. I do plan to payoff my equity line at the end of the year or begining of 2009. My house was worth $950000+ I have no Idea now. Maybe In the mid 800's now.

My question is HELP. I have no Idea what to do..should I wait and see how all these Conforming Jumbo work out or should I lock in now. What I am afraid of is that I lock into a fixed 30 year FHA loan at 6.25 and then I can do better down the road. I am very confused. I just don't want to make another mistake as I did with the loan I presently have.

I know a lot of lenders want "seasoned" loans. So if I refianance I will lose this and will not be able to refianace if rates get better or the Govt. opens programs in the future.

Is there any other programs (Fannie or Freddie) that might help me? I just don't want to end up with another bad loan.

Thanks In Advance

PS I live in Orange County Ca.

larry · Joined: 27 Jun 2007 Posts: 2473 327.54 Dollars($)

Hi,

Welcome to the forum.

The rates may go up or may come down but no one can predict it. In the mid of February, rates of 30 year FRM were 6.04. You could have locked it then.

You can lock it now but depending on are you satisfied with the rates and terms. Government may also open some better programs in future but if you wait for that you may not refinance ever.

Feel free to ask if you have any further questions.

Best of luck,
Larry

0.10 Dollars($)

When rates are this low (below 6%), I tell my clients it's up to them when to lock since I don't have a crystal ball, but there is a lot more room for rates to move up than there is to move down. Depending on how long you plan to own the home, you could go with another hybrid ARM/Fixed ARM or a fixed rate. I believe Orange county conforming jumbo limit increased to $729,950. From what I have read, the "jumbo conforming" program will only be around until the end of this year.

Jeanette · Posted: Thu Mar 27, 2008 8:52 pm Post subject:

Hello Cajunhourse and Welcome to Mortgagefit,

At a 6.75% ARM that adjust in December 2008, you have a few more months to monitor the rates . As Larry mentioned, a month ago you would have been able to get 6% rate. You have nine months left before your ARM adjust, have your Mortgage Planner keep an eye on the rates for you and lock you in as soon as it dips to around 6%, that is one option. The other option is have the LO lock you in now at 6.25% and if the rates change within that lock in period to something lower then the LO can change the 6.25% to the lower rate. The third option, You can also buydown the rates if you want.

Jeanette SMith
Mortgage Planner
Union Mortgage Group
office 757-306-3300

Ron1 · Posted: Thu Mar 27, 2008 9:49 pm Post subject:

With a combined loan amount of $750K you are well beyond FHA County loan limits, even with the increases limit to $729xxx we just had for So Cal.

Orange County is considered a declining market. Which means that many lenders are decreasing the amount they will lend by 5% to existing guidelines. Many such as Wells Fargo have determined not to lend past 75-80% loan to value in such areas.

What I am seeing is that the new Jumbo-conforming products are not up to speed yet. Many lenders are just now releasing guidelines for them and the rates are not any better then existing jumbo products.

All thought that the new jumbo-conforming products would be sold to the same securities as conforming loans, thus getting the same interest rates. Not at all, they are being put into a whole new security that is untried with unsure expectations which mean higher interest rates for the time being.

My suggestions is too wait and see. With all the recent changes its going to be a good 60-90 days before everyone gets their heads on straight and decide what to do with this stimulus package!

Sincerely,

Ron Bauer
First National Bank
Lending in all 50 States.

Jessica · Posted: Thu Mar 27, 2008 10:23 pm Post subject: RE: waiting for refinance

Well said Jeanette and Ron.

Cajun, I too suggest that you wait for a few more months and monitor the rate. And when it gets to the level you are comfortable with, you can shop around and lock the rate. However, if there is a float down option with your rate, then I think you can lock now. The float down option will give you the chance to lower your rate if the market rates go down before closing.

Ron, a warm welcome to you Smile

It is true that the new category of jumbo-conforming loans (between $417,000 and $729,000) is yet to leave it's impact. And unlike what the industry predicted, it may not be having rates as low as the conforming loans.

Regards,

Jessica.

Guest 0.10 Dollars($)

The new FHA loan limit for O.C. is 729,750 so unless you are willing to payoff a portion of your equity line or can get the lien holder on your equity line to subordinate your loan exceeds FHA limits. FHA loans are great loans but they are designed more toward people with mid to below average credit or for high LTV situations. You do not seem to fall into either category, so I do not understand why your broker would suggest going FHA. While these loans do have low rates they also come with an upfront mortgage insurance charge and a monthly mortgage insurance premium. But if you do want to consider an FHA loan the loan limit increases are temporary and will be reduced back to the usual 417k at the end of 2008. Also if you are worried about rates dropping, rest assured FHA loans are assumable and if rates drop you can do a streamline refinance (as long as it is rate & term only) to the new lower rate without any fees or penalties. If you would like to see what you would qualify for in an FHA loan vs. a conventional loan please give me a call 949-206-8505. I would be glad to show you some of your options.

Christal Schrader
Mortgage Banker
877-201-7898

blue · Posted: Thu Apr 03, 2008 3:24 am Post subject:

Hi Christal Schrader,

Welcome to Mortgagefit discussion board.

I would like to invite you to join this community. An experience person like you will be a great help for the people who come here for information and suggestion. You can join here as a lender and give your valuable information to people who are in need of it.

By the way we don’t know much about you. Why don’t you introduce yourself to the community at http://www.mortgagefit.com/introduce-yourself.html

I am sure you will enjoy participating in this forum.

Thanks
Blue

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