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View Full Version : Refi... I don't think I can... can any experts point me in the right direction?



easytoremember
11-21-2011, 09:52 PM
My mortgage was first with Countrywide closed in May 2007. Bought with 0 down and at 7.375% on a 30 yr fixed.

Since then Countrywide went to Bank of America, now it got sold off to a company called Green Tree Servicing.

I called them and asked and they said to do the research on my own and see if I qualify for something then call them back... I'm pretty busy and am looking for more guidance than that. Any ideas where to start?

awsomeears
11-21-2011, 10:21 PM
My friend does this for a living, if you want his info contact me.....

88Nightmare
11-22-2011, 02:49 PM
my mother just refinanced her house... 30 year fixed at I think 4% apr, through chase.

PureSound15
11-22-2011, 03:05 PM
You'll have to hope that you're one of the few that isn't upside down due to the 0% down in 2007 and what home values are now.

Anyway - if you're not going to be in your home for 15+ years I'd go a 15 year ARM with a 30 year AM for the rate savings.

Wagonbacker9
11-22-2011, 03:07 PM
Its all going to depend on where your financed principal is vs the home value...

wrath
11-22-2011, 03:36 PM
Bust out the calculator and figure it out for yourself as to what you can really do and if it is worth it. My parents refinanced again into a 15 year 3.675% APR loan, no escrow. I can't do a 15 year loan comfortably and I'd never get my money back on a 20 year or 30 year refinance.

You may find out that you're upside down.

easytoremember
11-22-2011, 04:39 PM
I'd bet I am underwater on it. I think my ltv is probably 110 or 115% or so... due to the drop in values. I thought I heard a couple weeks ago that Obama was trying to erase the ltv requirement for streamline refi's, no?

Wagonbacker9
11-22-2011, 05:30 PM
You should be able to get an estimate on your house's value using zillow.com.

my "zestimate" is nearly dead on with where my appriasal came in. Not that you should expect the number to be dead nuts, it should give you a good starting point though. If you're close to the value, have good credit, and pay on time then you should probably be able to find someone willing to do the refi. But I wouldn't count on the first place you try signing off on it.

PB86MCSS
11-22-2011, 08:23 PM
I'd bet I am underwater on it. I think my ltv is probably 110 or 115% or so... due to the drop in values. I thought I heard a couple weeks ago that Obama was trying to erase the ltv requirement for streamline refi's, no?

I heard this as well but nothing since then, not sure if it has any legs. I'd love to see it happen for my own personal reasons, being underwater and not being able to re-fi due to this. IMO it puts the risk on the banks much more again but not the taxpayer (barring another bail out of course). A big benefit from doing it to help the economy from the massive amount of people who can afford to keep their home (and want to) who would in turn save a lot on interest, theoretically put that into the economy again. I know we would and it would help in our plan to look into purchase another home and rent this one out, which was the plan all along.

We tried re-financing twice, appraised value was too low. We don't have much equity and bought in the fall of 2007, upside down for sure. The positive spin is that you can use that low appraisal to try and lower your assessed value and save a little on property taxes. We dropped our assessed value 18k from the lowball appraisal, should save us a few hundred on taxes per year going forward. Appraisals come in all over the place, comps used can be a joke sometimes, usually in this market foreclosures or short sales which kill your value especially if you're in Milwaukee County. It's a roll of the dice whether your appraiser has a clue or not as well as how much equity you have.

Our Zillow price is 30k+ where our appraisal actually came in. Yep, our appraiser was a fucking dipshit. So caution in using that price.

Wagonbacker9
11-22-2011, 10:00 PM
We tried re-financing twice, appraised value was too low. We don't have much equity and bought in the fall of 2007, upside down for sure. The positive spin is that you can use that low appraisal to try and lower your assessed value and save a little on property taxes. We dropped our assessed value 18k from the lowball appraisal, should save us a few hundred on taxes per year going forward. Appraisals come in all over the place, comps used can be a joke sometimes, usually in this market foreclosures or short sales which kill your value especially if you're in Milwaukee County. It's a roll of the dice whether your appraiser has a clue or not as well as how much equity you have.

Our Zillow price is 30k+ where our appraisal actually came in. Yep, our appraiser was a fucking dipshit. So caution in using that price.

Yeah, I should mention that my house had some VERY solid comps on the assessment that were sold within a year, and about half the houses in the neighborhood are still with their original owners, and thus have not had mortgages on them in a very long time. Very stable, and thus much easier to assess.

Wagonbacker9
11-25-2011, 04:43 PM
http://www.clarkhoward.com/news/clark-howard/homes-real-estate/new-refinance-rules-could-benefit-millions-upside-/nFNdM/

Only good if Fannie or Freddie owns your mortgage though...

PB86MCSS
11-25-2011, 09:13 PM
Thanks for the link...didn't know changes actually occurred. Will have to follow up with our bank soon to see if/when we can take advantage of it.

* After reading some more, it appears if you still are paying PMI, you won't be able to qualify for it. Which we do...great. If someone doesn't have to pay PMI and has that much equity, they probably could of re-financed anyway before due to having that much equity. If this is true, doesn't help nearly as many owners as it could.

Wagonbacker9
11-25-2011, 09:22 PM
I didn't read it over very carefully, but the PMI problem would basically mean that you're ~5 years into your loan, and (had values stayed stable) would have 20% equity. Now, theoretically you could have paid off 20% of your principal and still have 0% equity in your home. This is the group it appears to be targeted at.

So you're right, basically, it only covers people who have a ~5yo mortgage, not people who have ended up upside down in far less time than that.

PB86MCSS
11-25-2011, 09:32 PM
We're just over 4 years into our mortgage currently but only have about 8% equity, we put about 3% down IIRC. "Real" equity, we're upside down probably 20-25k.

Wagonbacker9
11-25-2011, 09:40 PM
Yeah, that hurts. I'm in a 3% down FHA, but thanfully just signed it a couple months ago, so my rate is amazing, and I don't think I could get worse than 0% equity at this point. I guess I'm a little surprised that 4 years in you're only at 8% equity.

Edit: just did the math on my amortization, and its pretty close to that. Damn. LOL

My PMI is projected through 2019.

pOrk
11-25-2011, 10:28 PM
3% down is a risky loan to begin with, they suggest 20% for a reason.

We have 50% equity and have been here almost 3 years, making double payments the entire time is helping tremendously.

Wagonbacker9
11-25-2011, 10:44 PM
3% down is a risky loan to begin with, they suggest 20% for a reason.

We have 50% equity and have been here almost 3 years, making double payments the entire time is helping tremendously.

Risky for who? Barring losing my job, the percentage I put down has no effect on my ability to pay the mortgage. And realistically, I'm paying an extra $150 a month (PMI) to mitigate the risk the bank took on in giving me the low down payment loan. The money it is saving me on rent vs had I had to save up for 20% down is WELL worth it though. I can't wait until the day I'm at 50% equity though, color me jealous. Hopefully Lyns gets a real job soon! haha

PB86MCSS
11-25-2011, 10:46 PM
We would of loved to have more equity but it wasn't an option, neither of us had a combined 30+k laying around in a bank nor deep pockets of mommy & daddy (not saying you did, but I know of some who have, not that I blame them). I don't know of many people who could put down that kind of coin without having equity in another property already (aka first time home-buyers). To get that kind of down payment we would of had to keep renting, probably still yet, in order to buy...which at the time was a foolish notion. Of course, if one could see the future and home prices dropping this much, we would of never bought this place ;). Also couldn't afford double payments, otherwise we would of :) . Additional amount? Sure...the best laid plans don't always go as one would think though.

pOrk
11-26-2011, 10:33 PM
25 years ago it was impossible to get a loan without mommy and daddy signing for you AND 20% down, how did people buy homes back then? My parents gave me a pretty generous house warming gift, 2 weeks of labor helping me install new floors and paint. I had to sell everything to get the down payment, and I stole my house. Just saying though, can't expect a bank to refi on an upside-down house after what happened 4 years ago. Why refi an already risky loan? Its NO RISK to the buyer, all the risk lies on the bank. You get in trouble, you walk away with a bad credit score for a few years. The bank takes a 30k+ loss on the house at a minimum.

wrath
11-27-2011, 07:13 AM
25 years ago it was impossible to get a loan without mommy and daddy signing for you AND 20% down, how did people buy homes back then? My parents gave me a pretty generous house warming gift, 2 weeks of labor helping me install new floors and paint. I had to sell everything to get the down payment, and I stole my house. Just saying though, can't expect a bank to refi on an upside-down house after what happened 4 years ago. Why refi an already risky loan? Its NO RISK to the buyer, all the risk lies on the bank. You get in trouble, you walk away with a bad credit score for a few years. The bank takes a 30k+ loss on the house at a minimum.

25 years ago housing was a much larger portion of people's income whether they rented or owned and housing was always exactly 3 times the average family income with renting typically costing 10% more than buying. People would stay with family until they saved up enough money. Imagine how much money we would all have if we didn't spend $250/month for a family of three on TV and phones?

There is a reason a bank charges interest, it is to pay for that risk. Further, banks require private mortgage insurance which offloads their risk (you are buying the bank private mortgage insurance).

I'm fine with my $1500/month mortgage payment on my FHA loan. Have to live somewhere. I'm less enthused about some of my other bills. My house is worth what I paid for it, but I had to put $20k into it to get there. I'm fine with that. It'd bother me if I had to move to find work but I don't have that problem.

pOrk
11-27-2011, 08:20 AM
Joy sure what you're trying to explain to me here besides the obvious? I don't have cable tv for a reason, I have much better things to spend my money on. I know I can't afford a 1500 dollar per month mortgage either

Wagonbacker9
11-27-2011, 12:19 PM
Joy sure what you're trying to explain to me here besides the obvious? I don't have cable tv for a reason, I have much better things to spend my money on. I know I can't afford a 1500 dollar per month mortgage either

My mortgage comes in at about $1200, but thats including my homeowners and my taxes paid into escrow, plus the PMI. I'd agree, if I was willing to live without a phone, or any entertainment, I could have probably put together 20% down. Would have been a pretty shitty first decade of my adult life though.

wrath
11-27-2011, 08:08 PM
$1500 is what I used to pay in rent in Waukesha and the state gave me a whopping $300 back on my income taxes for paying $18,000 in rent in a year. You have to live somewhere, might as well own a home if you figure you can always have a affordable commute to a job. I don't have data on my phone but my next one will. I don't have cable TV either. My job will pay for a phone but I don't trust them. They won't pay for my Internet though. But anyway, people's housing cost is smaller than what it used to be (as a percentage of disposable income) which is why we can afford things like paid TV, Internet, and cellular phones.

I financed the whole loan because at 4.5% on a 30 year note I'd rather borrow as much as I can now so I can stick it to the banks later when inflation kicks in.

But anyway, call up a few credit unions. Or if you're desperate call Quicken Loans/Rock Financial. If anyone can find a lender that will take you on, it's them.

pOrk
11-28-2011, 10:21 AM
My mortgage comes in at about $1200, but thats including my homeowners and my taxes paid into escrow, plus the PMI. I'd agree, if I was willing to live without a phone, or any entertainment, I could have probably put together 20% down. Would have been a pretty shitty first decade of my adult life though.

You ain't dating the right women or keeping the right friends if you're only source of entertainment is cable tv my friend. Just saying. Once you go without cable for awhile you realize it's a huge waste of money and find much better ways to spend your time, you only live once why live it on a couch?

Wrath I completely agree with you, just saying its harder to refi an already rocky loan most banks aren't willing to take those risks anymore.

88Nightmare
11-28-2011, 10:30 AM
Cancelling cable TV was one of the best decisions ever. 250 channels and never anything on? Waste of $60/mo. or $720 a year. That's $720 a year I can use to take my girlfriend out to dinner, go out with friends, go to the movies (although that is a rip off too), or just put in the bank.

I need to start looking at houses.

PB86MCSS
11-28-2011, 07:55 PM
25 years ago it was impossible to get a loan without mommy and daddy signing for you AND 20% down, how did people buy homes back then? My parents gave me a pretty generous house warming gift, 2 weeks of labor helping me install new floors and paint. I had to sell everything to get the down payment, and I stole my house. Just saying though, can't expect a bank to refi on an upside-down house after what happened 4 years ago. Why refi an already risky loan? Its NO RISK to the buyer, all the risk lies on the bank. You get in trouble, you walk away with a bad credit score for a few years. The bank takes a 30k+ loss on the house at a minimum.

The point of these new changes is that many buyers do just that, walk away. Risk isn't all on the buyer having bad credit for x many years and the bank is just fine. The risk IS also with the bank on foreclosures. They don't get all of their money back and lose the financing/interest. This helps alleviate that, putting some risk on the bank but helping avoid more foreclosures.

Wagonbacker9
11-29-2011, 01:09 AM
You ain't dating the right women or keeping the right friends if you're only source of entertainment is cable tv my friend. Just saying. Once you go without cable for awhile you realize it's a huge waste of money and find much better ways to spend your time, you only live once why live it on a couch?

Wrath I completely agree with you, just saying its harder to refi an already rocky loan most banks aren't willing to take those risks anymore.

I was actually speaking generally... ANY form of entertainment...

PB86MCSS
02-13-2012, 10:39 PM
There are some very recent changes to refinancing that might help some homeowners, particularly if you owe alot more than the home is currently worth. I don't want to get ahead of myself but in talking to our bank (Wells Fargo) this evening, it looks like we will FINALLY be able to re-fi, cutting 2.375 off our rate. Submitting paperwork tomorrow AM and locking in the rate. Our roadblock the first two times was the appraised value being too low for what we owe (bought in 07'). The current program, I believe called HARP2, requires an appraisal still but it doesn't matter if the property is at $1, if you meet other criteria as you normally would need (debt to income, payment history, credit rating, etc) you might now qualify. Just a heads up if it helps anyone else who was in our shoes. Each bank is surely different a little but the changes last week or so might be worth looking into for those who are like us :D .

PB86MCSS
03-10-2012, 09:25 AM
Just an update if anyone read my above post and is in a similar situation to us (underwater but good everything else) we close on our re-fi this Monday, so less than 30 days to close from when we started the process and get a desirable rate (4.625) which will save us $250-280 per month.

jbiscuit
03-10-2012, 09:27 AM
4.625 is desirable? Banks were locking rates at 3.975 yesterday! (for 30 fixed)

PB86MCSS
03-10-2012, 07:40 PM
How much equity do you need along with credit to debt/income ratio, etc. to get the rate some banks advertise? ;)

We have very good credit and pretty good debt/income ratios but the home being underwater and we have maybe 7% "equity" from what it sold for, I think the advertised rate isn't reality for us, or for many (most?) people.

Compared to 7.0, 4.625 is holy-balls desirable :) .

pOrk
03-10-2012, 09:03 PM
^ Agreed

I am waiting on another paycheck to refi but I have 40% equity in my home with the refi we are going for and we barely qualified for the 3.875 2 months ago. Hoping we can lock it in near there now, currently at 5.25 but want to take care of some school loans.

jbiscuit
03-11-2012, 01:35 PM
Of 7.0 to 4.625 will be huge but you could have gotten lower than that even with minor equity in the home. Most refis being written last week that were sub-4% were 20% equity loans and above. So Pork you should be able to get a 3.975 easy. Or better yet, refi to a 15 or 20 at 3.725!

pOrk
03-11-2012, 07:24 PM
When I refi it will be a 15 or 20 for sure, just a matter of timing. Wish the paychecks rolled in faster haha :)

PB86MCSS
03-11-2012, 08:25 PM
We locked in the rate a month ago, I think rates went down slightly from then. I don't know all the rates we could of gotten when shopping around to be honest, in talking to Accunet they couldn't do anything for us and even said to work with our current bank was the best bet and with the HARP program, or HARP2 as someone called it, I don't know if we could of gone elsewhere for the same deal. The changes to the HARP program letting someone who owes well over 125% of what the home is worth are the only way we could of done this. Basically, I don't think we had a lot of options.

This was kind of my point in the thread, for those in our situation, this can be done whereas less than a year ago or even months ago, you had zero chance of refinancing.

bikedad
03-12-2012, 12:59 PM
DO NOT DO AN ARM! Interest rates will be volatile in the next couple of years.
If you can afford a 15 year fixed you should go that route or at the very least 30 year fixed.
Just had a conversation with an investment adviser about our business. With the amount of paper currently pumped into the system you will lose terribly. Interest rates are destined to go up. They are currently held down to try and jump start the economy but it isn't working. (Businesses have cash but no warm fuzzies to spend it). That means the Fed will have to increase taxes and interest to cover the screw up that's currently in place.
ARM's are a huge gamble right now.

PB86MCSS
03-12-2012, 10:24 PM
Good advice although I don't think anyone is talking about doing an ARM. I also agree that rates can only go up, but they have been this low and relatively in the same range for quite some time. Not sure they will go up much unless we have a lot of good signs the economy is improving. Still seems to be mixed signals but generally improving.

Personally we're also really glad to refinance now rather than when we both have our own homes (possibly within a year) and this is a rental property. My understanding is that refinancing in that scenario won't get you anywhere near the best rates.

PureSound15
03-12-2012, 10:51 PM
Lots of situations are the right one for an ARM, IMHO.

Of course, if you can swing the 15 am payment, there's nothing wrong with building more equity. The likelihood of your deal being sold a number of times goes up pretty high once you're in a 15 or especially 30 year product.


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