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jpage · Joined: 01 Dec 2007 Posts: 1 1.80 Dollars($)

Help Please, there are so many products out there and I don't want to make a bad descision on a refinance.

Appraisal 610
Bal. of loan 238
Current rate 7.375
Cedit Scores 742/710
Primary residence
Expect to be in house 4-5 years max

What makes the most sense for lowering the monthly payment, should I wait a couple weeks/months to lock a rate

We had a 5+1 that was 5.675 that just got whacked a couple months ago

Thank you in advance

livinginnky · Posted: Sat Dec 01, 2007 12:33 pm Post subject:

What lender was your 5/1 arm with? I assume it was with a conforming lender.

What matters in this situation is the "break even period". If you plan on staying for 4-5 years max, with closing costs it could take 2-3 years to break even.

Are you saying $610,000 for the appraised value and you owe $238,000 to pay off the existing ARM mortgage? and How often does your current ARM adjust and do you know the "caps"?

What is your current payment?

Guest

The 5/1 was with Regions Mortgage and it is conforming
Thank You for the reply,
we owe 238k on the 610k appraised house.
We had a ARM but now it has adjusted to a fixed at 7.375
current payment is 1687.00, we used to pay 1284.00

banker0679 · Posted: Mon Dec 03, 2007 9:38 am Post subject:

wow that's a high rate!!!!

you shouldnt get higher than 6.25% for 30yr fixed UNLESS you had a foreclosure or bankruptcy etc.

Are you going full doc or state?
Appraisals shouldnt be higher than 400.00....Unless it's a million dollar home and they need 2 appraisals.

Some lenders charge a lock fee of 600 (lendingtree)...but that doesnt include the appraisal

Posted: Mon Dec 03, 2007 11:22 am Post subject:

Ok do you know what the caps of the adjustable rate is?

You can probably get a lower rate but it depends on whether or not the closing costs make it worth it or not. Since you plan on moving in 4-5 years more information is required.

banker0679 · Posted: Mon Dec 03, 2007 11:59 am Post subject:

i was writing about the 'adjustment' rate....not stating that's what's being quoted to her.

Not offering proposals but making a POINT that when she shops around she shouldnt get higher than a 6.25% for a 30yr fixed. She should get a lower than that....but just giving her the heads up on it. Also didnt say WITH a BK.
My point is that most lenders take advantage that her rate HAS or WILL adjust to 7.375%. They will normally offer a higher rate due to this.
Also, a product does come with rates, terms, and fees.

Telling a borrower that she should look for a conventional/conforming product is like telling someone to find a car with 4wheels.

I wouldnt recommend an ARM again...get a30yr fixed mortgage, and most likely the lender wont document your income. With your scenario they dont ask for this when your LTV is lower than 80%..and with a 680 score

livinginnky · Posted: Mon Dec 03, 2007 12:56 pm Post subject:

evolovik26 · Posted: Mon Dec 03, 2007 8:46 pm Post subject:

If you plan on staying at the home 4-5 years tops but it could be less id go with no closing costs loan at the lowest rate you can get. If everything you saying is correct you should be able to get a no closing cost loan at less then 7% if you lock within next couple of days.
What that means to you is this:
Your rate goes down to say 6.75 or so and becomes fixed so you don't have to worry about it adjusting ever again.
You don't have to add anything onto the loan balance to get this done so as far as you are concerned its free ( the lender will pay the loan officer for giving you higher then market rate )
Your payment will go down. (about $150/mon)
And you can sell it anytime you like.

Another way if you going to stay there a while you can get 5.875% rate and add about 5-7k on top of your loan in closing costs. Your new payment will save you $280/mon meaning you will recoup your costs in 17-25 months and the rest will be your profit.

You can do it either way but no matter what you choose it is definitely a benefit for you to refinance.

If you have any questions please don't hesitate to contact me.

shane · Posted: Tue Dec 04, 2007 2:39 am Post subject:

Great advice Eugene, when there is apparent benefit to have in the form of refinancing, and the homeowner doesn't know for sure how long they would be in the loan for... the "no closing costs" refinance is a good solution.

chrisburns · Posted: Tue Dec 04, 2007 5:16 pm Post subject:

You should very easily be able to get a 30 year fixed loan with an interest rate between 5.8% and 6.125% very easily.

This is a no brainer.

rick · Posted: Wed Dec 05, 2007 11:20 am Post subject:

I agree with Chris...the rates that I see for a 30 yr. fixed are right now typically better than for the 5 yr ARM, especially with retail pricing where the lender rebate will take care of the mortgage broker's compensation. On that point, ask your mortgage broker for choices, i.e., ask what the price would be for each interest rate between wholesale and full retail. They'll know what that means, and should be able to guide you so that you are comfortable with the financial decision that meets your goals. Even if they were just an eighth above, that's not much to pay for the added security. The money you'll save in lower interest should far outweigh whatever your non-closing costs are, given that you're Ok with a two year payback period or so.

Yes, you can easily add it to your loan balance so you don't experience the cash flow effect, (just the little extra each month because your loan balance is higher) but you'll certainly experience it when you sell.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

You should qualify for a 30 year fixed rate between 5.50% and 5.75%. Here are some mistakes that many people make when comparing mortgage loans. Follow these rules and you will get excellent terms on your refinance.

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