Refinancing Mortgage/HARP2/Down the rabbit hole!

[TheVBs]

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!

[princessgirls]

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

[buzznwoodysmom]

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!

[diz_girl]

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.

[DizneyRox]

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.

[DVC2004]

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.

[DizneyRox]

Yes, which is why I was shocked when they said yes. Literally, we called and just asked, next thing we knew, lower monthly payments. Who am I to argue...

[DVC2004]

Yes, which is why I was shocked when they said yes. Literally, we called and just asked, next thing we knew, lower monthly payments. Who am I to argue...

I agree! Total gift. It just proves that it never hurts to ask.

[TinkerbellT421]

Wish I could help. But I am so ignorant when it comes to numbers. I was previously paying almost 8% on my previous mortgage. Last October I hired a mortgage officer to take care of everything, he was able to get me a mortage at 4% and the closing costs were minimal, I also had to hire a evaluation company to come in and evaluate my home's worth which cost about $350.00. At the time I figured it was worth it seeing I found out my town was taxing me on about $35,000.00 more than they should have so I ended up appealing the tax bill from the town but that got me nowhere in the end because the Town denied my appeal, three times and then told me I could take them to court for the fourth appeal. That was more frustrating to me and dealing with the mortgage refinancing.

[TheVBs]

Thanks so much for all the input everyone! For those of you that had an easy time with your lender just modifying, particularly you DisneyRox, would you mind sending me a PM with the name of the bank you use?

I have been hearing that there are some banks that just go ahead and do it, no problem. Of course ours isn't one of them.

[DizneyRox]

We're with M&T Bank and haven't had a problem. We built with a construction loan through them and converted it to a mortgage once we were done. No nightmare stories to tell...

It's going on 6 years and never a problem... Loan hasn't been sold either, which I assumed they would have.

[TheVBs]

Thanks again for all the info! After working the phones for several days, I've come to the conclusion that this is just not meant to be for us right now. If we qualify, I can't seem to get anyone to make the change for us. If we don't, we really can't get the % rate low enough to make it worth parting with closing costs. And, there's too much uncertainty with an appraisal, if we had to do one. In a month our loan "servicer" is getting changed and I'll make one last ditch effort to see if they will simply lower the rate with no fuss involved. If not, oh well! We're at a good rate now, and I'm grateful for it.

This is exactly the kind of thing that makes me long for a WDW trip!

[DizneyRox]

Yeah, that's bout where we were for a coupla years. We had an agent friend add us to a distribution of house sales in our area to track local prices. The appraisal would have come in low, so we styled away from that, no need to throw good money after bad.

We were ok just sitting tight. Aggrivating when others are getting low percentage refis.

You can check on PMI for your mortgage, if you can get rid of that (sometimes all you need to do is ask) that's going to cut some.

I also outlined a ton of other things we were able to get rid of in another thread. We trashed cable TV, some electricity supplier changes, etc. I think we to rid of almost $1000 a month in expenses including the modification. We're in the process of dropping PMI right now to the tune of another $125.

We've aren't missing any of our cutbacks. I'm sure DishTV wasn't happy, but I'm not interested in making anyone happy except my wallet.

[TheVBs]

We got rid of PMI a while back and got rid of cable a few years ago. Also beat down both the cell phone and regular phone bills. But great suggestions and it wouldn't hurt for me to take another look at where we could cut back.

Ok, even more confused now. Got a call from our original mortgage guy telling us we do qualify for HARP. But, apparently we still need an appraisal and still have closing costs, which they'll "roll in". So, can anyone tell me, how is that different from a straight up refi? I don't understand what qualifying is doing for us. Plus, he's now telling us we'd have to appraise for $25k more than he originally said. Again, !! I've left him a message asking about these questions, but haven't heard back yet. He's saying we'll come down a full point, shave a year off our mortgage and save a little each month. All great if the appraisal comes in as expected. But if it doesn't, that's $400 out of our pockets for the appraisal. Argh!!

[TheVBs]

Ok, have to post an update here. I tried talking to two other loan managers and had no further luck. Today, out of frustration I decided to search online to see just what exactly this program (HARP, HARP2) is supposed to do for people. In my search (love Wiki!) I discovered a reference to the HAMP program - first I'd heard of it! HARP = home affordable refinance program; HAMP = home affordable modification program (or something close to those).

We recently received paperwork stating that while our loan will still be held by Fannie Mae, we would be getting a new servicer. Called the new mortgage company, asked how we could apply for a home loan modification. He said at first that we didn't qualify, I asked if he could tell me why. He said sure, let me put you on hold, I can check the code on your account. Came back with an apology saying we do qualify! So we've started the application process!

For anyone who may need this info, here's what HAMP is. They modify your percentage rate by up to two points, and if you pay your loan on time, every time, you qualify for a yearly bonus which is having $1000 removed from your principal each year for up to 5 years.

We still have to fill out paperwork and go through an approval process, but if this works out for us, this would make a huge difference to us!! Any pixie dust or good thoughts would be most appreciated!

[DizneyRox]

Persistence pays off I guess... Congrats on you!

Whatcha gonna do with all that money? Vacation? *hint* *hint*

[A Big Kid]

Count me as someone NOT happy about this. The reduction in interest and the bonus at the end of the year is funded through taxpayer money - my tax money - TARP funds to be exact. It's nothing more than a redistribution of wealth.

[DizneyRox]

Honestly though, IF it helps restore the close to $200,000 drop in the value of my home, I'll be a happy camper. I'm not planning on moving anytime soon, but many are not all that lucky.

Big if, but it's better than sitting around doing nothing to see what happens.

If you can believe the news stories, it appears it may actually be a good thing. From msnbc.com: Taxpayers to make money on TARP, Treasury says

[TheVBs]

Well, believe me Big Kid we pay plenty in taxes, so you can console yourself with the reality that we're paying ourselves!

DisneyRox, thanks! So glad I was persistent too. Actually, I was frustrated and angry. And in those cases I feel the need to search for answers myself. And, in my head, I'm already planning the next WDW trip. It's not until next spring, but that's ok.

[princessgirls]

Glad things are working out for you!!

Always Always Always remember That Knowledge is POWER!!! The more you educate yourself on these things the better!!!!!!!

Better financing when you can is ALWAYS smart!

Julie