Need to Refinance Mortgage

[jch216]

Could anyone kinda clue me in on refinancing? I have a FHA mortgage right now that isat 7.375% APR. I sure do want to refinance before the rates climb back up. I have no idea where to start looking. How do I know when a company is trying to rip me a new one? I've been to bankrate.com and looked at the rates for my area, but there are well over 50 companies to choose from. What do I need to do?

How do I find out what houses have sold for in my neighborhood recently? It must be on the internet here somewhere.

Seeing as to how I just went through this..I'll give ya a few pointers. Don't go to lending tree.com even tho they say they'll give you a good rate they don't. You can use them for some ideas as I did but most of the places that listed when I did a search were higher than we got.

I'n my area they list house prices in the local paper so thats where i looked for an inital idea for what the house was worth and how much i was going to refi. You'll need to know exactly how much your going to refi. you will have to get an appraisal wich I suggest setting up yourself it can save money in the long term. Closing costs are negotiable as is finance rate. Shop it around. And don't expect to get the lowest rate you see advertised it just doesn't always work that way.

Some tech stuff I can't explain completely You'll need to know if you want to go 0 pts or add points to the loan in order to buy down the rate. Basically when you see loans as an extremly low rate they have .5-1.5 points added wich means the borrower is paying more money or higher mrtg. payment to get a lower rate.

I suggest looking for a loan company thats close to you it will make things a lil easier and to get the best rate you'll more than likely be going with a loan broker that will then sale your loan to a bank or set it up with a bank. Do your research make sure you know who your doing business with if you don't like what your hearing when you talk to them back out and go with another company. Find out what your credit score is and the approx value of your home it gives you more negotiating power when you know the facts.

[Chuckiechan]

If you belong to a credit union I would start there. You probably get a good rate and good service.

[swamp-fox]

Also try to only finance 80% of appraisal to avoid the PMI (Private Mortgage Insurance) which will add $50.00 to $100.00 to your montly payment and is ZERO benefit to you. It insures the mortgage company, not you but yet YOU pay for it. Get a second mortgage if you have too for the remainder of the loan.

If you're lucky, your appraisal will be more than 20% over the loan amount and you won't have to worry about PMI.

Shop around a little. Richemmxx is right you never get the low low advertised rate (unless maybe you're Bill Gates or Alan Greenspan) and don't need to borrow any money.

I just re-fied and got 5.75%

Good luck and watch out for FEE's.

swamp


clarkhoward.com\ , and motleyfool.com are good website's on money matters

[Ed_S]

Couple of things are vital about this. Refinancing will save you long term, but usually costs short term due to the closing costs involved. It takes a couple yrs to recover those costs.
Do some number-crunching to determine if it's worth doing at all, don't let lower rates be the only factor.
What term is the existing loan, and how long remaining?
New loan is what term? Hint - look at 15 yr rates.
Can you pay any closing fees out-of-pocket instead of rolling them into the loan, thus increasing the mortgage amount?
Do you plan to keep the house indefinately?
If your new payment is significantly lower, what will you do with the money?


We refied in '92, lowered our payment drastically, about 4% less. Paid all costs in cash. Continued paying the high figure we were accustomed to, applying the extra to principal. Paid it off in under 9 yrs & saved over 20K interest!
My current payment: -0-

[jch216]

I'm hoping to do one of two things. Either get another 30 year mortgage with a much lower payment (get rid of PMI and have lower intrest rate), or go from a 30 year into a 15 year.

I've had this mortgage for 2 years now. The loan amount was around $98,000. Maybe the value of the house has increased. I've seen a couple homes like mine in this neighborhood listed anywhere from $104,000 to $126,000.

Your mortage is similiar to mine. I pay $518 monthly on a $77,000 mortage taken 2 years ago on a 30 year term. You must be paying around $600 give or take.

As Ed says, look at the overall picture. If you have spare $3,000 to $4,000 and can invest this in closing/appraising, and want to do a smart thing by going to 15 years (but paying a bit more each month) then refinance. Else, leave it.

[mad1]

What company are you currently with. I just did a refinance two months ago. What I did was a "rate reduction". THe company sends two packets of papers, one to keep and one to have signed and notarized and mailed back. This process took me abut 10 minutes and the closing cost were $0.
When searching for a rate always look for a loan with no closing costs, they are there.
I am refinancing again with a no closing cost loan thru a mortgage broker that I used last year. THey just came thru yesterday for the appraisal.

[jch216]

I'm with chase right now, and my monthly payments are about $850 (PMI and property taxes really make my payments big).

EDIT:

Where do I find a "true" no cost refi? I don't want the closing cost rolled back into the loan amount.

as everyone has said you may not one to refi...crunch the numbers to see how much you'll actually be saving. And if you do see check your options with your bank like mad01 has said its always the best option and saves alot of hastle.

But if you do refi like i said do your homework get your credit score not repprt but score its an actual number they go by. Have all the info ready. Wich they will tell you what you need you'll need proof of income for you and your wife or whoever else is on the loan your insurance info. Make a million copies of everything and read closely read anything they send you. We paid out of pocket for our appraisal and they tried to charge us. But it was small mistake but overlooked would have been $300.

since you have your insurance and property taxes impounded you'll more than likely want to keep that...and it makes life easier. As for not having closing rolled into the loan thats optional it just takes more out of pocket in the beggining. I'm assuming you going to want to take cash out??

you may also be able to qualify the loan as a first mortage wich unless you ask about it sometimes they won't tell you or just don't know. And if you do it qualifys you for a lower rate and better terms