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Refinancing Mortgage/HARP2/Down the rabbit hole!
So, I've recently taken on looking into refinancing for a lower percentage rate, and I know how Alice felt when she dropped down the rabbit hole!!
First of all, we're not in a bad position. We're at a fixed 5 1/4, have never been late on a payment and aren't in danger of falling behind. So if this doesn't work out it's not the end of the world.
However, why is it so difficult?! I called our loan "servicer" who said that they show that we don't qualify for HARP2 (getting refi'd for a lower % without an appraisal or closing costs), but they think that we should. Called our loan "holder" and they show that we do qualify, but are offering zero help beyond that. Spoke to a housing specialist and was told that we have to go through an "open access" lender to get that program. An independent mortgage guy who came with high recommendations can't get it for us, but could definitely do a straight up refi as long as we will appraise for at least 80%. Our home value has definitely dropped, but we can't seem to figure out just exactly what it would appraise for.
I don't want to have to pay closing costs if we can work within that program. However, I don't mind paying them as long as I know the appraisal will come in at the right amount and that we'd be able to go down at least a full point. Haven't gotten up the energy to try talking to an "open access" lender yet (the housing specialist directed me to a website that lists them).
Has anyone waded through this mess or understand it at all?? Any advice would be most welcome!
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We live in Northern NJ, and several "local" bank lenders were offering pretty attractive deals for refinancing. We did a zero cost one with our bank in 2010, they sell of the mortgage anyway before the first payment is due. At that time we got into a 4 1/2% rate, they are even lower than that now. It was the whole deal too, with an appraiser coming out, and all.
Another lender Valley National, did a $500 cost refi, which also was not a bad deal.
All I'm going to say, is that out of ALL of the mortgages we have gotten in the last fifteen years, this was the most labor intensive. Lending is NOT what it used to be. We had it all too, credit scores, good income to debt ratio, and we had a good amount of equity in our home that we purchased in 2007. NOT as much equity as when we purchased though...housing in my area has taken a beating! Anyway...hang tough, because IT'S worth it! I was recently looking at a spread sheet from the accountant with our tax return, and the amount of interest we paid in 2008 the full first year of our mortgage was $7,000 more than we paid in 2011 with a better rate.
We went from 6.25% to 4.50%, the payment went down, I did go back into a new 30 year (on the positive side, we were only 3 years in), only financing what we owed, if I could I would have gone into a 15 but we have our kids in private school so...it's all about the payments.
I say DO IT, because SMART financing will pay off in the end!!!
Usually the Real Estate section of your local weekend paper has a lot of info on local lenders.
Good Luck!
Julie
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So sorry your having such a tough time. We refinanced less than a year ago and it was completely easy and stress free. For us it was as easy as notifying our loan manager who took care of us when we initially bought our home. We contacted him, he got everything writen up, we went in signed the papers and were done. We didn't have to have the house reappraised, but we only bought the house in 2008, and we had no closing costs.
I hope you can get things worked out. It felt great to lower our monthly note, and on top of that we were able to get our new loan for less years, therefor we shaved a few years off as well! Good luck!
Denise
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We're refinancing now. We prefer to work with our Credit Union, rather than a mortgage broker. We've always had good experiences working with Credit Unions.
We moved last year and used a reputable bank, not a credit union, and had to jump through so many hoops, it was ridiculous. While we will be paying closing costs, we'll save so much more because we're so early in our current loan. We'll have about 70% equity in our house and both of us have excellent credit ratings, so I don't expect any problems with the refi.
Good luck.
Amanda
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We just did a modification and it was cake. I was surprised as I was sure we were in for another mortgage headache.
Refi wasn't going to work because of the depressed housing market, the modification got us a lower interest rate, but everything else the same. We're in the same boat, we're making the payments comfortably, never late, missed, etc. Wasn't a big deal if it didn't go through with it, but hey, who likes to pay more than they have to for anything.
You might try asking for a modification from your existing lender. Unless that's what you meant by they are offering no help. I'm pretty sure with a refi, you need the whole appraisal, etc. A bank doesn't want to write a loan out on a property for more than it's worth. That's what got us in this mess to begin with.
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I think HARP and Harp 2 are only offered for Fannie or Freddie mortgages. If your loan isn't a Fannie or Freddie, you may not qualify.
Alot of banks don't want to do modifications if you haven't had a hardship or if you are current on your payments. They don't look as being underwater on your home as a hardship. They are looking at job loss, underemployment, illness, death, etc. Not every bank/lender, but many. It's worth a shot to ask of course.
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