marie76444 asked:
My husband and I are trying to refinance our home. We have been here for a year now. Right now we have ARM rate at 11.4%. My lender called me today and said they can get us a fixed rate at 7.5% with all the closing cost “rolled over” into the loan. And all we have to pay at closing is $76.00. She said our house payments would go from 786.13 to 846.00/month. Or they could go down just a bit not a tremendous amount. Is this good? We have no idea about any of this stuff. I know we can swing the extra if our house payments did go up! She said she would over night the paperwork to us we sign and copy a few things and then we can get it rolling. Does this mean its a gareentee that we are gonna be able to refinance? Thanks in advance!!
Leslie
My husband and I are trying to refinance our home. We have been here for a year now. Right now we have ARM rate at 11.4%. My lender called me today and said they can get us a fixed rate at 7.5% with all the closing cost “rolled over” into the loan. And all we have to pay at closing is $76.00. She said our house payments would go from 786.13 to 846.00/month. Or they could go down just a bit not a tremendous amount. Is this good? We have no idea about any of this stuff. I know we can swing the extra if our house payments did go up! She said she would over night the paperwork to us we sign and copy a few things and then we can get it rolling. Does this mean its a gareentee that we are gonna be able to refinance? Thanks in advance!!
Leslie
Amy
As your loan officer if you have been put through “underwriting” yet. The underwriters have the absolute final word on your approval.
The 7.4% fixed rate seems a bit high, unless your credit has a few blemishes or if your debt to income ratio is a bit high.
Debt to Income ratio means the amount of money you owe on everything when compared to your total income. That gives them a percentage and if you are below 36%, then you are OK. You can check out this debt to income ratio calculator here:
Also other calculators here:
The reason your payments are going to be higher may be because you may have been in an interest only ARM and refinancing to a fixed means you will also be paying towards the principal.
One word of caution: Do not strip all of the equity out of your home. If something happens, and you need to sell your home unexpectedly, you need to have a little equity to make sure you can sell it for what you owe on it or maybe even a little less. With today’s market, you need to stay ahead of the price drops if you can.
Comment by Hatlady — May 27, 2010 @ 10:46 am
David
she is not doing you a favor, but earning from your mistakes…it sounds like a rip off!
from 11.4 to 7.5 should reduce your payment! I found my lender with Lending Tree. …it’s like the ad says, lenders do compete for your business…do not agree on first deal…listen to them all and as you learn, you will begin to ask up front for the interest rate and what it will cost you to complete the deal. You want a fixed loan!!!!
Comment by justagorilla — May 27, 2010 @ 11:20 pm
Erik
Either some facts are missing or something is very fishy here. Lower interest rates should equal lower payments, unless you are shortening the length of the loan or getting cash from your home’s equity. Are you taking a 30 year loan and refinancing for 15 years? Are you cashing out some equity and not telling us?
If the term of the loan is similar, and your aren’t getting any cash out, what exactly is the benefit to you to refinace? You’ll be paying more every month. How much are the closing costs?
Comment by Laissez-Faire Guy — May 31, 2010 @ 10:42 am
Jose
7.5 is fine if you have some credit problems on your report but check with the underwritters for the final say.
Comment by THE DEAL MAKER — June 1, 2010 @ 11:27 am
Kevin
It sounds like you are in the very early stages of the loan process. Ask your lender as many questions as you want until you are clear on the benefit they are providing you. Also ask them to explain the refinance process to you step by step and ask what the anticipated close of escrow date wil be(the date they expect you to sign the final documents with a notary) I am a mortgage lender and I can tell you nothing is guaranteed until you have a final approval from the lenders underwriting department which is the last step in the loan process. Are they raising your loan amount for cashout, etc? If not ask your lender why your payment is staying the same or possibly going up when they are supposedly lowering your rate by 4% which would equate to a much lower payment providing the term (30yr,40yr,etc.) is not changing. Hope this helps.
PS ask them what is the amount of those “rolled over” fees?
Comment by HYATT J — June 1, 2010 @ 11:21 pm
Ron
Get a 2nd opinion.
Anyone you speak to about a loan needs to provide you a Good Faith Estimate. The you can compare the apples to apples.
7.5 is high right now and rates are expected to dip again with stock market woes. There are never any guarantees. She is just a loan officer who will pass off your file to the underwriter who will evaluate your value, income etc…
Rate wise….you could probably do better.
OBA™
Comment by Open Book Advisors™ — June 3, 2010 @ 8:59 pm
Ruben
wow what a mess you are in .be careful.get help from mom and dad. this is a big mess that could hurt you more than help you. you need a fixed loan. don’t forget hubby has the loans that will also be taken into consideration when lenders go to give you credit. ask lots of questions.
Comment by bootsers — June 4, 2010 @ 9:42 am
Juan
sounds pretty good….but the rates are around 6.875% for a 30yr fixed….possibly lower if you have a large loan amount.
Might as well roll in the costs…and get the lower rate
Comment by Carolinahomerates.com — June 6, 2010 @ 4:36 pm