Refinancing in Maryland - I am looking for advices

alee2412 · Joined: 24 Jan 2008 Posts: 4 2.93 Dollars($)

I am looking for advices for refinancing my house in Rockville, MD-20853. I bought this single detached house in August, 2007 for 350K with a fixed 30-year mortgage with Credit Union. My monthly payment right now is about 2700/month, including PMI because I didnt put any down payment.

At the moment with the rate cut, I am considering of refinancing my mortgage. My credit scores are above 720, but I don't really have money for closing refinancing Sad

With your experiences, could you please give me advices about should/should not refinancing and a good lender (reasonable interest rate, fee, customer service).

Thank you very much for your time and consideration.

Amy

alee2412 · Joined: 24 Jan 2008 Posts: 4 2.93 Dollars($)

My avatar changed from a boy to a girl, and now back to a boy Very Happy

quiet funny since I am a girl.

More questions:

- Have you ever worked with any Chinese bank in US? One of my co-worker is from China, she once told me that Chinese banks often offer good rate and low fee. I didnt remember the bank's name though.

tt for now

larry · Joined: 27 Jun 2007 Posts: 3059 429.39 Dollars($)

Hi Alee,

Welcome to the forum.

You have bought the house "in August, 2007". So it is only 5 months. But I think to refinance a mortgage; it should be at least one year old. So I don't think you can refinance the mortgage now. Better wait for some time.

But you can always talk to the lenders and see whether they can allow you for refinance now and provide a great program. Even in this community there are hundreds of lenders from all over the United States. So you can talk to them. You can find their address at http://www.mortgagefit.com/unitedstates/

Hopes that will help you:)

Feel free to ask if you have any further questions.

Best of luck,
Larry

Samantha · Posted: Fri Jan 25, 2008 3:25 am Post subject: RE: refinance rates and time

Hi Alee,

I am not aware as to whether Chinese banks in US offer a low rate.

It is true that mortgage rates offered by lenders and companies offer vary from one another. But in general rates depend upon the yields on treasury bongs and the federal funds rate. It has got noting o do with a Chinese bank or so.

However, rates are pretty low at the moment and it's a good time to refinance ARMs as well as FRMs into lower rate loans.

You have a good score, so hopefully you will be having a wide range of offers to choose from. And, since you are paying for the PMI, it will help you avail tax deduction on the PMI premiums.

Regarding choosing a good lender, I would suggest that you start shopping with some lenders. Collect information on the rates, fees etc that they offer and ask questions such that you don't have problems with comparing the lenders and then applying. Check out the section on Common queries to lenders .

You may even consult lenders in our community. The lenders offer a wide variety of loan programs to choose from. So, if you are interested, you may as well send us your request for mortgage quotes. As soon as we receive your request, we shall forward it to our lenders community and they shall try to match their profiles with your loan requirements. If they are able to match their profile with that of your request, they shall contact you to offer the quotes.

Hope this helps...

God bless you

Samantha.

gmakerley · Posted: Fri Jan 25, 2008 9:40 am Post subject:

the biggest obstacle you will face in your quest to refinance is value.

because you made your purchase only a matter of months ago, with no money down, your value is not likely to be sufficient to allow a lender to grant a new loan.

please dont let that commentary keep you from trying. fha loans, for instance, allow up to 97% of value for a no-cash-out refinance and 95% for a cash-out.

as for chinese banks, i wouldnt be surprised - the chinese are the thriftiest populace in this country (quite likely the smartest as well).

ckalvesmaki · Posted: Fri Jan 25, 2008 1:16 pm Post subject:

The only big Chinese bank here is the Honk Kong Shanghai Bank......and don't know what the rates are.......

alee2412 · Joined: 24 Jan 2008 Posts: 4 2.93 Dollars($)

Thank you all for the comments, I greatly appreciate your help.

About refinancing: when CU was processing my loan, I once asked them about refinancing and chances to get rid of PMI. I was told that I could do that anytime. However I think that I will talk to CU again about this.

We have done quite alot of works to improve the house value, such as refinish hardwood floors, tile basement, upgrade whole kitchen, remodel basement bathroom, insulate floor, painting, painting and painting. I remembered that my Re/Max realtor once told us that Re/Max would help to revalue the house after 6 months in order to reduce or get rid of PMI - however I don't really know how they can do that. By the way, all of the improvement we had done and seeing the rate going down make we think of refinancing.

About Chinese banks: honestly I don't like them and I want to avoid doing any kind of business with them. I searched for HSBC online though.

Again, thank you so much and have a great weekend.

lisascherzer · Joined: 04 Jan 2008 Posts: 599 69.56 Dollars($)

Hi alee2412,

The credit union will only remove pmi if your new loan is below 80% of your current home value. There is an option that will allow you to buy out PMI insurance with a bit of a hit in rate (about .25%) which equates to a 5.75% 30 year fixed rate with no points. You can go up to 95% of the value of your home with this option. Since you have just purchased the home not too long ago, this could offer you the best way to eliminate your PMI insurance and lower your mortgage rate.

P.S. you can have your closing costs financed into the new loan as long as there is enough room at 95% of the value of the home to include the closing costs.

0.10 Dollars($)

Hi all,
Your comments are great helps to us. Thank you very much.

Yes, it's true that the credit union will only remove pmi when my loan is below 80% of my current house value, i.e. either until we make 20% payment or the house's new value is $440K.

Our house was appraised for 360K when we bought it, which was already 30K lower than its identical neighbor house. I think that at the moment, after making a lot of improvements, our house value could reach up to 400K to 420K (I know I am dreaming a little bit Smile

- it does not hurt to dream, does it?) Maybe we should add a wood deck in the back yard to raise the house value more. My hubby and I are doing all improvements ourself to save money and get rid of PMI as soon as we can (this saves us money too).

Do you think that this scenario will work?

- We refinance 80% of the CU loan, for example, with BoA (just an example, BoA is expensive). That will be 280K for 30 years, 5.5% interest, so it's roughly $1,600/month for this loan.

We will not have to pay PMI on this one, won't we?

- The rest 20% (or maybe 17% since we paid 1 point and 6 months already) will still be with CU. That is 90K, 30 years of 6.75%, i.e. about $600/month.

We will not have to pay PMI because this is only 20% of the loan. Is that right?

In this scenario, we will have to pay $2100/month - for 30 years. I think that in the long run this scenario is more expensive than refinancing a whole and pay PMI until we make 20%.

Anyway, it's just a scenario I had thought of this morning. We love this house, our neighborhood, schools and shopping center nearby, and Home Depot is less than a mile away. We plan to live at least 10 to 20 years here.

We appreciate all your comments. Hope you all are having a great day!

Caron · Posted: Wed Jan 30, 2008 1:14 am Post subject: RE: refinance to remove pmi

Hi Alee,

Welcome back.

If you are taking out a loan worth 80% of the home value, then you need not purchase the PMI policy. But I'd like to suggest a few changes in the scenario that you've given here. You said, you can refinance 80% of the CU loan. As much as I know of a refinance, that's not possible – I mean you'll have to refinance the entire 80% loan, that is, pay it off with a new loan. If you refinance 80% of CU loans, it means you are paying just 80% of that loan and the remaining debt is left out. So, this won't be a refinance exactly.

Therefore, what I suggest is, you refinance the entire CU loan; you can have a talk with the CU or any other lender regarding the refinance. You need to get the details on the quotes he can offer you. Based on that you can take your decision.

In case you wish to know more on Refinance, please visit the section on this topic.

good luck

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