Mortgage Rates

[deac04]

Would appreciate some advice here... I purchased ~ 2 yrs ago and got a rate of 4.875 on a 30yr mortgage. Trying to determine if it is worth it to refinance to get down to 4.25. Current mortgage is with Wells Fargo. Really don't want to put ANY money on the table to refinance. Is it possible to have ALL of the refinance costs rolled into the new mortgage? Smart to do it that way or not? Who would you recommend talking to (as far as lenders) as a potential company to go with. Any advantage to stay with Wells Fargo vs moving it elsewhere?

I bought mine around the same time at 5%, was told that going to 4.25 was not worth it unless I was going to stay there all 30 years. 4 might be a different story. What do others think about this?

Another point is that I got the "Obama money" - $8,000 for first time homeowner buying a house. You have to live there for 3 years as primary residence. My question is, am I allowed to refinance in those 3 years or will I have to repay it? (I know if you move, you have to repay it, not sure about refinancing).

Also, why do people not use a broker? My understanding is that it costs you nothing and they can find you the best rate. Any truth?

 

[leftcoastdeac]

I bought mine around the same time at 5%, was told that going to 4.25 was not worth it unless I was going to stay there all 30 years. 4 might be a different story. What do others think about this?

Another point is that I got the "Obama money" - $8,000 for first time homeowner buying a house. You have to live there for 3 years as primary residence. My question is, am I allowed to refinance in those 3 years or will I have to repay it? (I know if you move, you have to repay it, not sure about refinancing).

Also, why do people not use a broker? My understanding is that it costs you nothing and they can find you the best rate. Any truth?

My financial adviser recommends using a broker for that reason - they can shop rates for you.

That said, my wife and I ran into a situation where the broker we selected did not want to move forward with looking for financing based on a questionnaire we returned to her. The areas of contention were investor concentration in the neighborhood (due to several units being owned as investment properties) and the overall HOA delinquency in our neighborhood. The broker told us that she would not be able to secure financing for us and ended the relationship. Keep in mind, my wife and I live in the house and have never been late nor missed a payment to the HOA.

Out of curiosity we called the bank that currently holds the loan and they were willing to refinance the property.

I guess the point of sharing this story is that if you're not getting anywhere with the broker, don't give up hope - find a new broker or work on shopping interest rates on your own.

 

[OGBDeacon07]

I bought mine around the same time at 5%, was told that going to 4.25 was not worth it unless I was going to stay there all 30 years. 4 might be a different story. What do others think about this?

Another point is that I got the "Obama money" - $8,000 for first time homeowner buying a house. You have to live there for 3 years as primary residence. My question is, am I allowed to refinance in those 3 years or will I have to repay it? (I know if you move, you have to repay it, not sure about refinancing).

Also, why do people not use a broker? My understanding is that it costs you nothing and they can find you the best rate. Any truth?

Why would you have to repay the Obama money if you refinanced? That makes no sense if it's still your primary residence.

I also got the first homebuyer's tax credit in July 2009 and my mortgage is at 5.375%. All my docs are in for a refi at 4.375% and no points. Closing date coming up in a few weeks as soon as the underwriter gets finished.

 

[deac04]

Why would you have to repay the Obama money if you refinanced? That makes no sense if it's still your primary residence.

I also got the first homebuyer's tax credit in July 2009 and my mortgage is at 5.375%. All my docs are in for a refi at 4.375% and no points. Closing date coming up in a few weeks as soon as the underwriter gets finished.

I was hoping I wouldn't but I just wanted to make sure. Better to ask before than find out after. Just like herpes.

 

[OGBDeacon07]

I was hoping I wouldn't but I just wanted to make sure. Better to ask before than find out after. Just like herpes.

Heh. Only difference is nobody is gonna tell you they have herpes.

 

[Deacon92]

Underwater

Until I find a bank willing to refi knowing that the properites (yes, two) are underwater, I'm hosed... I'll still pay the full amount of the outstanding loan. I don't want to walk away, but man would a lower rate help.

And yes, I know I'll have better luck trying to catch the dam leprechaun and making him give me his pot of gold.

 

[94Deac]

With the new regulations, lenders cannot pick-and-choose which appraisers to send to which jobs; they're required to randomly assign appraisals now.

However, there are at least two ways you can TRY to up your appraisal value in order to qualify.

If you've got the means, do a home improvement project. How much depends on the value-gap you have to bridge. Also, you can ask your lender how much cash you could bring to the table in order to qualify for a re-fi. Some will not do this but many will allow you to buy up your equity in order to meet their requirements to re-fi.

 

[DCDeac]

If you've got the means, do a home improvement project. How much depends on the value-gap you have to bridge. Also, you can ask your lender how much cash you could bring to the table in order to qualify for a re-fi. Some will not do this but many will allow you to buy up your equity in order to meet their requirements to re-fi.

Huh? Since when are you not allowed to put your own money into a refi? I've never heard of that... Heck, you can put money down to get to 20% or even go past 20% if you have a target monthly number in mind.

As for the appraiser, be up front with them. Tell them the number you need to make the deal go through and follow the process. Now that they're randomized, often they don't know the area as well as you do, and often you can suggest comps they might have missed that point to your number.

Granted, your number has to be reasonable, but there is wiggle room. The comps just need to be legit. The days of comping a 3 bedroom home with hardwood floors and lofted ceilings and crystal chandeliers to a 3 bedroom home with stucko and linoleum are long gone.

 

[94Deac]

I should clarify: I meant that you have to be clear about the source of the money. Some lenders are wary due to IRS rules governing the source of funds involved in real estate transactions, especially now.

As for the appraiser, I'd be skeptical of any appraiser that could be swayed by a nudge in the ribs. Perhaps 5 years ago, but not now, even if it was in my favor.

 

[captruss24]

Banks choosing an appraiser is not a totally random process. We have an internal department that handles the bids, and 99/100 they give us local appraisers. Depending on the size of the transaction I can pick and choose between A, B, or C based on cost and turnaround time. I've never heard of a case where the homeowner has to provide comps for an appraiser.

Any home construction requests out there? We just got approved for a jumbo construction w/ 100% financing for 4.875%.

 

[DCDeac]

Banks choosing an appraiser is not a totally random process. We have an internal department that handles the bids, and 99/100 they give us local appraisers. Depending on the size of the transaction I can pick and choose between A, B, or C based on cost and turnaround time. I've never heard of a case where the homeowner has to provide comps for an appraiser.

Any home construction requests out there? We just got approved for a jumbo construction w/ 100% financing for 4.875%.

An appraiser would never require it, but it can work out much better for you if you provide comps as the owner during a refi.

Case in point - my house is technically a two bedroom, but the entire basement was refinished and serves as a third bedroom with full bath. Because so many townhouses from the early 1900's in my area were built in the same style, this makes it far more rare. At first my appraiser just pulled in a couple random 2 bedroom comps and I was going to get screwed. I talked to her about it and researched to find a couple recent sales of 2 bedroom houses that either had a converted basement or matched my square footage, and it added at least $50k to the appraisal.

My point is, having run through the gamut about a dozen times now, it is always better to be up front with an appraiser and to be involved in the process.

As my appraiser explained it, the biggest difference now is that the lender has zero direct contact with the appraiser, and the payment goes through them and they get a smaller cut. In fact it screwed me, because the service request had the wrong phone number for me, and after the hand-off she had no way of contacting me or the lender. She had to look me up.

Very different from when I bought the house - the lender had an appraiser that was "his guy" and the number came back exactly how we needed it to after 5 minutes of work. Just like my loan approval came back after sending a single paystub. So fucked up.