Mortgage Refinancing

[BigPete]

I need to refinance my mortgage because of a terrible APR that I had to accept when I bought this house 5 years ago. It was my first home and I didn't have anything to put down (the VA allows that, but it still hurts your APR no matter your income or credit rating).



So, any advice you all can offer would be appreciated. I plan to find a mortgage broker here in St. Louis and I will most likely stay with a 30 year fixed rate option. I don't like risky deals and I have no idea what my employment outlook is now that the Department of Defense is downsizing and changing so many contracting methods to cut costs. I also don't know how much longer we will be living here. I could stay indefinitely given the right employment but I would be equally happy living back in Chicago, moving to DC or maybe Florida all within the next 5 years.



All I know right now is that I am paying way too much money to my loan shark, ahem Wells Fargo, at 6.5% on about 200K.

 

[winos5]

Difficult time to refinance.



Hope your credit rating is excellent and you have equity in your home. If not you will probalby have problems. Since your ex-military you might consider talking to USAA, if you haven't already.

 

[BigPete]

The only thing I owe on is the house and about 20K left on my truck loan. My last credit report about two months ago showed my in the high 700s.



I figured I would have an easier time with a broker than working directly with a bank based on recent experiences of family members.

 

[winos5]

I've had nothing but good experiences with USAA for banking, mortgages, credit cards, insurance, investments ect.... They are an awesome insurance and financial institution.

 

[whiteevo]

we closed on our refi about 4 months ago. moved from a 30 year fixed to a 15 year fixed, i cant even remember what we got now. significantly better. our monthly payment is a little less than we previously had. cut years of payments out with very little effort. we have been living in our house for 8 years. mind you my wife and i have pretty good jobs and 850+ credit ratings so i'm guessing that helped our cause some.



you owe it to yourself to at least investigate at a few different places.

 

[BlackHawkPaul]

We just refinanced while taking some $$ out to redo our bathroom. I did it while not being able to use Marcy's credit--which is much better than mine. They are going to look at all debts, which includes school loans, car payments, credit cards, etc. I advise you to NOT open up any debt until you are finished with the whole process. Mine was a nightmare over 3 months just to move my interest rate from 5.3 to 5.125, but it consolidated my car payments/mortgage into one payment. I ended up saving over 550 per month. Out overall mortgage payoff did increase slightly, but we bought when the market was very low, so we're still 40K above the water with the value of the home.

 

[BigPete]

How did you guys go about the refi? Broker, banks, or your original mortgage lender?

 

[BlackHawkPaul]

I looked around and ended up working with one of the banks.

 

[whiteevo]

broker that was helping a co-worker of my wife, then got the info to us, etc etc. i'm vague on the process mainly because i just signed paperwork. my wife drove the whole process.

 

[jakobeast]

It is tough to refi nowadays, but not impossible.



I hear David Hochberg on the radio a lot and he seems to know his stuff. Maybe email or call him. We called him once and was very honest with us.



His website ishttp://www.townstone.com/

 

[puckjim]

I refinanced a few months back using Lending Tree.



Everyone was very helpful.



Combined a mortgage and a home equity line into one 15 year loan for about the same monthly payment.



I'm also making payments every other week, so I end up making me extra mortgage payment per year.



As a result, my mortgage will be paid off in twelve.

 

[BigPete]

I am less concerned with having this mortgage and house for the next 30 years and more concerned with lowering the amount I pay every month.

 

[MassHavoc]

Not tryin to be a dick but what company did you get your credit report from? We recently did ours through all three and they were basically on a scale out of 900 or 999. 700s puts you at about a C level on those that I saw. Except for the 4th one we did through the realator which they had their own scale upto 500. We wouldn't have found a place in the 700s. Luckily I was in the 900s on all three and the wife was in 2 of them and a 899 on the third. If you only went to one I would check the other two to see which is the best. Also look for any discrepencies as you can now dispute them online through the tools with just a few clicks. My wife did that for a couple of them and it worked. One was some gas bill and another was some macy's card or something, they removed both red marks from her report.

 

[BigPete]

I have a fraud alert protection plan with some bank accounts and it comes with 'free' quarterly credit reports from the 'big three' agencies. I have no outstanding credit card debts but will occassionally use one and pay it off (I actually had a huge balance until last year when I finally got it all paid down to $0.00 ).



I have a feeling the reason I float between 750 and 800 is because of my debt to income ratio. That is directly exaserbated by the high mortgage. There are no negative marks on my credit reports and I only have 4 credit cards open right now. Two are traditional credit accounts, one is a bank account, and one is for JC Penneys for furniture that we just bought and will be paid off in a month (because the stuff hasn't been delivered yet there is actually no balance on it right now).



I have never been delinquent on any bill and I have had plenty of loans and credit cards now. I can't imagine any bank would believe me to be an unsavory borrower.

 

[MassHavoc]

I read an article about all the weird backend stuff that has to do with your credit rating. I wish I could remember where it was. Stuff about how things you wouldn't believe affect your credit report do. It's things like the number of credit checks ran, but they also said that's way over blown. I wish I could remember where it was, it really pissed me off. Something about how 0 balances can actually hurt you sometimes, and only having one credit card. I think I was looking up stuff on my wifes student loans that we are absolutely getting ass reamed on for some reason.

 

[BigPete]

The FICO method is crazy and the big three use a variation of that. The lender will also use their own method to evaluate one's credit rating. I just hope to fall into the top 'favorable' category so I can get the best rate.



Right now, I need to find a broker near me. I put out a request to my existing mortgage holder, Wells Fargo, to see what rates they would offer me at 15 and 30 year fixed deals.

 

[MassHavoc]

From all the threads I've read here, this one included, and the stuff I've seen online, it would be good for you to at least call USAA.

 

[BigPete]

USAA is advertising some pretty good rates but the best ones make you buy points which I am not really interested in doing. 0.25 points will cost me about $1900 and you have to buy between 1 and 2 full points to make a big difference. (to do the math it would cost me almost 8K to get one full point - no thanks)

 

[winos5]

That up front point is tax deductible along with mortgage interest you pay. Yeah, it's money out of your pocket, but can be a decent tax deduction. We just financed the upfront points, closing costs and fees into the mortgage re-finance, minus the small handling fee they charge up front.



Also if you talk to the USAA mortgage advisor they will paint a clear picture for you on how long it will take you to get out of the red on your re-finance. We refinanced aboot 16 months ago and copmbined a home equity line of credit with it. It took about 6 months of payments to be out of the red, admittedly we make 2 mortgage payments a month though on our 30 year fixed mortgage so it was a biut quicker than it would have been



PS: I think it's funny that at the bottom of the page is link for mortgage re-financing

 

[Pez68]

Be prepared to be told, in a not-so-direct manner, that "you can't afford to pay less than you're paying now". Mortgage refinances are so ridiculously stupid right now. Even with great credit, and good debt to income ratios, you can be denied a refinance to a lower rate. They went from handing out mortgages like candy, to now being so fucking stingy with them, they should be castrated.