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fredalawrence · Joined: 07 Dec 2009 Posts: 1 1.41 Dollars($)

I would like to refinance my currnent mortgage for a better rate. Here are the stats on my existing mortgage:
Currently a 80 LTV;
~43% DTI;
FICO ~800
Westchester County, NY (Distressed Market);
$539,000 with a mortgage of $431,200;
Condominium;
NOT FHA APPROVED; and
NO FHA SPOT APPROVAL
<1 Yr since closing
Current rate 6.375 seeking ~5.00% rate

jveenstra · Posted: Mon Dec 07, 2009 2:58 pm Post subject: Refinance

There are a number if issues here:
1. If the appraised value is now $539,000 and the mortgage is $431,200 and the mortgage of $431,200 does not include closing costs, one of two things must occur:
a. You will need to pay all the closing costs and prepaids out of pocket so the mortgage does not go over 80% of value.
b. If it does go over 80% LTV, you need Private Mortgage Insrance (PMI) and that not only is not available with a DTI over 41%, if it were, it would eat up any costs savings
2. How many floors is the condo? It matters only because some mortgages are availble for over 4 stories and some are not.
3. NY has a state mortgage tax. That would cost you about $5,500 unless the Cema is processed. Some lenders will not process the CEMA. Those that will would cost you around $1,200 to save the $5,500. Who is your current mortgage lender??
4. I am guessing that you do not presently have PMI from when you purchased the property/did the last mortgage? Is that correct??
5. Your mortgage is High Balance Cnoforming as far as FNMA is concerned, whoich means it is over $417,000. That makes the rate today on a 15 day lock about 5.25% and zero points. It is a condo and that costs .75 points, which, when built into the rate makes the rate .125% higher than would a house. You are also in NY and that is almost always .125% higher than evrywhere else. I am saying that 5.00% is not likely. I would suggest that while you want the lowest rate possible, a rate of 5.50% makes sense and lower is better.
6. Is your present mortgage owned by Fannie Mae or Freddie Mac? If it is, that opens up a whole new ball game. If you do not know, call the lender and ask if the mortagge is owned by Fannie Mae or Freddie Mac.

Guest

There are a number if issues here:
1. Appraised value @ purchase was 545,000.00. Purchase price was $539,000 and the mortgage is $431,200

a. Currently at 80% LTV
b. Prefer not to go with PMI
2. How many floors is the condo? 3 Story townhouse style
3. NY has a state mortgage tax. That would cost you about $5,500 unless the Cema is processed. Some lenders will not process the CEMA. Those that will would cost you around $1,200 to save the $5,500. Who is your current mortgage lender?? Bank of America services the loan
4. I am guessing that you do not presently have PMI from when you purchased the property/did the last mortgage? Is that correct?? New construction and No PMI
5. Your mortgage is High Balance Cnoforming as far as FNMA is concerned, whoich means it is over $417,000. That makes the rate today on a 15 day lock about 5.25% and zero points. It is a condo and that costs .75 points, which, when built into the rate makes the rate .125% higher than would a house. You are also in NY and that is almost always .125% higher than evrywhere else. I am saying that 5.00% is not likely. I would suggest that while you want the lowest rate possible, a rate of 5.50% makes sense and lower is better. I understand lower is better, just not sure how much savings I will see @ 5.5%
6. Is your present mortgage owned by Fannie Mae or Freddie Mac? If it is, that opens up a whole new ball game. If you do not know, call the lender and ask if the mortagge is owned by Fannie Mae or Freddie Mac. I am uncertain, just know its serviced by B of A
Thank you very much for your response, hope the additonal information helps...

jameshogg · Posted: Mon Dec 07, 2009 10:46 pm Post subject:

Hi Lawrence,

You've mentioned that currently you've 80% LTV. In that case, you won't be required to go for the private mortgage insurance (pmi). However, as far as I know, most FHA loans would require a mortgage insurance. So, if you're planning to for a FHA refinance, you may have to pay the mortgage insurance.

Refinancing will a better option if you plan to stay in the property for a longer period of time. How long are you planning to stay in that property? If it's 8-10 years, then you will be able to offset the closing costs and other costs that you incur due to refinance. If you are planning to stay in the property for 3-4 years, then I don't think it would be a good idea to go ahead with the deal.

Thanks

Guest

Thank you for the input Jameshogg. I plan on staying a minimum of 5 years. The property is not FHA approved and I have had several lenders during my initial mortgage process try the spot FHA but to no avail. I have heard on more than one occassion to seek a CEMA. I do not know enough information about them to determine if they are a feasible option.

adonis · Posted: Tue Dec 08, 2009 9:56 pm Post subject:

Hi Lawrence,

CEMA stands for Consolidation Extension and Modification Agreement. It is available in New York and helps you avoid paying a part of the New York Mortgage Tax. Under this agreement, it is possible to avoid paying mortgage tax by restructuring the mortgage note. The restructuring would be such that it would be considered as an extension of the original note for which you've already paid the mortgage tax.

Check out a sample document here: "http://www.usforms.com/forms/US/c/US-C-215-6935.pdf"

Posted: Wed Dec 09, 2009 8:58 am Post subject: Refinance

You answered almost every question. One you did not answer is important.

Is the the mortgage "owned" by Fannie Mae or Freddie Mac?
We know it is "serviced" by B of A, but, we do not not know who owns it.

There are two ways to find out if the mortgage is owned by Fannie Mae or Freddie Mac:
1. You call B of A and ask them

2. We can look it up, however, we need some information to do that:
We need your name and address as it appears on your monthly mortgage statement.
For the Freddie Mac lookup, we need the last four digits of your social security number.

jveenstra · Posted: Wed Dec 09, 2009 8:59 am Post subject: Refinance

I sent the above message before logging in, so, I was not identified

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I would like to refinance my 6.375 mortgage on a 539,000 condo at a lower rate. LTV is 80%