Last week my brother told me the company he works for dropped their rates to 3.99. He said its a great time to refi if you can. But the new regs are making it difficult for most people to do. You have to have much more equity in your now and a strong credit score. Probably have to pay up front to get an appraisal. Try to get the lender to pay for the appraisal its non refundable.

Instead of trying to pay off earlier with a shorter loan ( and a high payment). Most people now are opting for a longer loan and low as possible payment. People are starting to realize that they may lose a job , get sick or injured or any number of things causing an income drop and a need for lower payments.

Just got 3.35 at a local credit union. (about 2 months ago) No penalties. Went from a 30 year mortgage to a 15 and increased my payment by $85/mo.

I've used amerisave when I bought my house with a 15 year and then refined after 2 1/2 years to a 10 year. I thought they were a pretty good company. It was pretty easy and you get like five options of what percent interest you want with different closing cost - some even negative-
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edited

e.g., what's the difference between the stated % and apr? is this difference fixed or are some mortgages more skewed than others? Are there certain refi fees I can challenge more than others?

My thought is that to simplify the math, that I should focus only on the monthly payment. To have them include all finance charges, taxes, and insurance. Is there any downside in that?

tia

 

Originally Posted by ripomatic

Wtf...penaltys????

Going rate on 30 year term is about 4.25. Obv. You can buy it down. or 15 year terms at about 4%.

Refinance fees are the kicker...check with your existing lender for exeptions..Wells Fargo is eating all refi cost if your an existing mortgage holder. Some private lenders run great deals at say 4.5% just depends on what your looking to do.

this...bought my place at 4.25 30yr...couldve got 4 at 15yr. this was in sept '10

 

Originally Posted by rebelfd

Link to Wells Fargo waiving closing costs

I am closing tomorrow with Wells Fargo @ 4% 30 yr with 0 closing costs and no appraisal, skip a payment, and even a smallish refund on emergency insurance/what was in the escrow....you have to have had an FHA govt. loan to qualify. Also the mortgage is transferable with sale of house which is huge if in a few years rate's go up....anyone with FHA I would recommend acting now, we hesitated for a while and luckily rates continued to go down, its about as low as its going to get right now....and it doesn't cost $1.

 

Originally Posted by mordan

I am closing tomorrow with Wells Fargo @ 4% 30 yr with 0 closing costs and no appraisal, skip a payment...

If there is one misconception I could clear up for mortgage customers that I hear over and over again it would be this one. You're never skipping a payment. You may not be "mailing" one in, but that money is being collected at closing.

As a result, if you are lowering your interest rate in a refinance, you are technically better off closing as early in the month as possible, because the prepaid interest being collected is at the new lower interest rate, rather than interest being collected toward your higher existing interest rate. Waiting until the end of the month doesn't really save you money.

 

Originally Posted by userid363

If the apr is just the % + fees that should make it easy. Why did I think that loans with the same apr can result in different monthly payments? I want to think it's as easy as you say. I do I do.

The same APR doesn't mean the same interest rate. As Blake explained, it can be a lower rate with higher fees that equals the APR of another loan with higher rate but lower fees. The interest rate is what is used to calculate the payment, the APR is a tool for the consumer to try and compare loans between lenders.

interest on the loan is not a closing cost. so when they take your loan's funding date, let's call it 12/27 for the sake of this conversation, there are two interest calculations:

1. Interest due on your existing loan through the funding date. So if you've made your December payment on the 1st as scheduled, they will collect interest on your existing loan as part of the payoff amount from Dec 1 to Dec 27. 27 days of interest for December included in the payoff amount of your existing loan on top of whatever the existing principle balance is at that time.

2. Interest due on the new loan. The interest on your mortgage is paid monthly in arrears. When you paid your Dec 1 payment, you paid the November interest due. So on the new loan they will collect the prepaid interest due from Dec 28 to Dec 31. 4 days of pre-paid interest due on the new loan at the time of closing. You will see this on your final HUD-1 settlement statement. Then you 'skip' your January payment (nothing is actually due because all the interest that needed to be paid was collected at the closing of the new loan) and your first payment on the new loan is Feb 1. On Feb 1, the interest being paid is the interest for January.

 

Originally Posted by hoosier418

Instead of trying to pay off earlier with a shorter loan ( and a high payment). Most people now are opting for a longer loan and low as possible payment. People are starting to realize that they may lose a job , get sick or injured or any number of things causing an income drop and a need for lower payments.

this is terrible advice. there are far better ways to manage risk.

 

Originally Posted by hoosier418

Most people now are opting for a longer loan and low as possible payment. People are starting to realize that they may lose a job , get sick or injured or any number of things causing an income drop and a need for lower payments.

If by most people you mean stupid people, then yes, most people...

i would recommend going for a "No Closing Cost" loan-----if the APR (annual percentage rate) and the loan rate are the same---then you know you know you have a true no closing cost loan

Do not merge!

Userid:
Not sure what you are confused about the most, but here is a simple explanation that might help.

You borrow money from a lender to buy a house. This is your loan "note"---your payments include Principal and Interest within the payment.

You will also be responsible for paying Property Taxes and Property Insurance for your home. The way that you will pay these expenses for taxes and insurance can be different---and typically come in 2 forms (you pay direct OR escrow payments).

If you choose to pay them yourself, then you will pay the Insurance company directly for your fire insurance policy once a year--and you will pay the tax assessor 2 times per year. You will continue to make monthly payments to the lender for your note for principal and interest.

If you choose to have (or if the bank requires it) your Property Taxes and Insurance "escrowed"----then your monthly mortgage payment will also include 1/12 the amount of the annual Insurance policy and 1/12 the amount of annual property taxes due. If, for example, your annual property taxes = $1,200 ($100 per month if you break it down into monthly) and Insurance = $600 ($50 monthly)---then your monthy payments to the lender would increase by $150 in order to cover the future payment of taxes and insurance when they come due.

When you first establish escrow payments with the bank, yes, you will need to put up extra money. The reason is that the lender will need to have enough money in the escrow account when the taxes and insurance come due (plus some reserves typically). You are always responsible to pay taxes and insurance, but the mechanism for how you pay is different. Some people would rather hold on to their own money and pay when the tax and insurance come due. Others prefer to set up an escrow account and pay monthly for taxes and insurance because it is easier to budget and you don't have to come up with an big payment for these items later.

You may have heard of an expression call "PITI"---it stands for Principal, Interest, Taxes and Insurance. The "PI" represents the principal and interest payments of your loan note. The "TI" represents the Taxes and Insurance.

There are many good lenders---I used to work for Fremont Bank and did a lot of loans long ago--but I don't think that they lend outside of California.

Best of luck---hope that helps

Rizniles

The .250 point charge is only charged if you waive set up of the escrow account. So when they put their GFE together, they had you as setting up an escrow account and priced it accordingly. Once you said that you did not want to have an escrow account, they have re-disclosed that the cost of doing that is .250 points. You will then receive a new GFE re-disclosing the new pricing within 3 business days.

And you are actually locked in with the lender and you made clear that you want to waive the escrows and agreed to the resulting pricing change?