Homeowners Seeking Lower Mortgage Payments Without Foreclosure Assistance ... Red, White, and Blue Press
Homeowners and potential homebuyers have seen various aspects of the housing market that may look either attractive or may have dissuaded them from pursuing options like buying a home or refinancing their current mortgage, as there are conditions that are presently in the housing market that have left some consumers in a position where they feel a great deal of uncertainty is present and may remain in the housing market for some time. Problems like devaluation and current issues related to our national credit rating being downgraded have some homeowners wondering whether home prices will continue to drop and interest rates to begin to increase, but of course there are those who feel that recent events that have occurred in our nation may have a much smaller impact than some have predicted.
Yet, homeowners who are looking for a more affordable mortgage payment do still have some traditional options, but due to the fact that there are fewer buyers in the market, there may be opportunities for homeowners to negotiate a more affordable mortgage if they are facing financial stress and are in need of options like a home loan modification. Understandably, homeowners do still have affordable rates which may be used to refinance for more affordability, there are those who question whether this is right at the time or if they can qualify.
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No closing Cost Loans, Refinance. Orange County, CA. Fred Solomon's mortgage ...
Interest rates are down at least one full percentage point just in the last week. If you are on an adjustable and you are lucky enough to still ...
how much does it cost to refinance in closing costs?
My mortgage currently has my name, my wife's name and my father-in-laws name on it. I would like to know how much should it cost to refinance in oder to get only my father-in-laws name on the mortgage and title. It is an FHA loan with about 6.3% and 167000 outstanding.
does it make a difference if this would not be his primary residence?
Closing costs will vary depending on the location of the property.
Another factor is if any additional money will be put down towards the refinance or will any be taken out. The credit score of your father-in law will also be considered as well as the current value of the home? When i purchased my home closing costs amounted to about $6500.00 on a 107,000 purchase. Hope that helps:)
http://loan.yahoo.com/m/securing9a.html
http://www.countrywide.com/Calculators/calculator.aspx?CalcType=ClosingCostEstimator
I am a mortgage banker in TN & KY
http://mortgages-finance.awardspace.com/
http://best-loans.awardspace.com/homeloans.htm
There are various repayment options that can be chosen by borrowers and lenders mutually. Bi-weekly payments are one of the most popular payment plans among borrowers.Bi-weekly payments let borrowers pay off their mortgage refinance faster. Bi-weekly payments allow borrowers to pay their monthly installments in two parts to be paid twice a month. Instead of paying full amount once a month borrowers pay half of their scheduled monthly mortgage payment every two weeks. An advantage of this option is that borrowers repay an amount equal to thirteen monthly payments by the end of the year, instead of the usual twelve.
How much money do you have to pay for closing cost when you refinance home loan? ?
I would like to refinance my house to get lower rate. My loan is 200,000. I m a first time homeowner, my current rate is 6.5 %. I ve own my home for about a couple of months, my credit is good, not excellent. I would like to know a ball park on paying closing cost. Also is the closing cost money i need to come up with?
2%
unfortunately the national average is 3 1/2 % closing costs
and yes all no closing cost loans are charging a Higher rate to use that yield spread to cover closing costs for you!
Does these no closing cost refinance programs work ?
200,000 loan reduce payments in half, apr 7.5%
The truth is there is no such thing as a no cost, no fee, no points loan...it's a sales tactic that works very well.
In reality, even when you get one of these programs, the mortgage broker or the bank loan officer must get paid somehow, and it's done through a rebate known as Yield Spread Premium.
In the US, mortgage brokers have to disclose this "hidden cost", but banks and direct lenders do not, and some will actually lie to you if you ask them about it, because by law they do not have to disclose it. The same is true for mortgage brokers who act as bankers just long enough to sell the loan.
A better way to deal with this is to pay your origination fees up front, which gives you the lowest APR and monthly payment possible under you specific scenario, because YSP/rebate costs you $100, $200, $300 per month depending on your property value, for the life of your loan, and the greed of the broker/loan officer. Not so bad if you don't plan to be there for a long time and you are being charged no more than 1 point, but wouldn't you like to know what the loan is actually costing you?
These loans with minimum payments can get you in deep trouble if you're not careful...you need to get educated on what a Pay Option Arm, or Hybrid ARM really means to you, and if you make the minimum payment, it always means you will have negative amortization, or simply put, you lose equity every month.
Work with a reputable lender in your local market, and ask them to disclose "ALL" costs associated with their loan offer to you...especially that hidden back end fee. If you are paying more than par for the loan, you are paying YSP.
My suggestion is always to have some down payment...at least 10%, but preferably 20%, but if you don't, don't buy a house with 100% financing in a troubled market, only in a fast appreciating market...and that's not where we are currently. You could be in big trouble if you combine 100% financing wth negative amortization in a flat to down market.
Be careful out there.
Robert Noakes
Real Estate Investment Consultant
Sr. Mortgage Planner
415.652.8112
robert@noakes.com
Other lenders may extend the tenor (length/duration) of the loan. Sometimes, you end up paying much more when you consider the all-in economics. Some may also give low APRs for the first few years and the rates increase after a fixed period.
Will WAMU really refinance your home with no closing cost or is that a lie?
I'm a loan officer and lately I've heard that Washington Mutual will do your home loan with no closing cost and the will use your old appraisal. Is this true or are there closing cost when it's all said and done?
they will use the old appraisal if it's a rate/term refi or if DU waives it.....streamline Refi
anyone can do NO CLOSING COSTS...if the going rate is 6.125% with closing costs....they will charge 6.75% no closing costs. they raise the rates by at least 0.5%
nothing in life is for free
You can read the whole story at the supplied URL.
http://www.iht.com/articles/ap/2007/11/01/business/NA-FIN-US-Subprime-Mortgages-Scandal.php?WT.mc_id=rssap_business
Nothing is free, ask questions, use a broker. Everything has to be disclosed with a broker.
Great Western gave me my first mortgage on a house when I was in college over 40 years ago. I decided to buy a house and rent out bedrooms to my fellow students rather than pay rent.
It was one of the best decisions that I have made in my life.
Great Western gave me a mortgage when no other lender would. I worked my way through college and was self employed most of the time.
No lender and no REALTOR even wanted to talk to me. But Great Western did.
I bought that house directly from the seller who was selling the house without a REALTOR.
That house was the best investment that I ever made in my life.
I paid $15,000 for that house back in 1967
I recently had that house appraised at $860,000.
I see one of the responders posted an issue of inflated appraisals.
I agree that is a problem with all lenders, not just Washington Mutual.
The way that I see it, it is your job as a purchaser to protect your interests.
One way that I do that is that I hire my own appraiser when I am purchasing a property. I make the sale contingent on my apprasal, not the lender's appraisal.
I also hire a real estate attorney who writes the language that makes that work. The language of the standard real estate contracts is not sufficient to make that work. You need a good real estate attorney to write that language for you and more importantly enforce that language in the event of a dispute.
Invariably my appraiser is lower than the lender's appraiser.
I give the seller two choices. That is the seller may either reduce his selling price to the value determined by my appraiser or I withdraw my offer and buy another property.
The seller is to agree to sign instructions to the title company directing the title company to return my deposit to me. If the seller fails to sign those instructions, and some sellers do, then I have my atorney notify the seller that he can be fined for unreasonably refusing to direct the title company to return my deposit to me and also under the terms of my contract the seller will be liable to pay my attorny fees as well if he fails to sighn documents directing the title company to return my deposit.
I have never had a seller continue to refuse to sign after he was contacted by my attorney and my attorney has explained the terms of the contract including the special language that my attorney added to the standard contract.
Essentially my experience with Washington Mutual is that they are one of the most honest lenders out there, however I do agree that they should increase the quality of their appraisers.
However I also think that you should do like me and hire your own appraiser to protect your interests. Then the issue of the lender's appraiser becomes irrelevant.
Nurses don't work for free.
Firemen don't work for free.
The guy on the phone at Wamu does not work for free.
He also doesnt have to be licensed as he works for a corporation.....he probably doesnt want to be called a loan officer...he's likely referred to as Production Staff.
If they can get you to go with a higher rate and a bigger loan........they will get paid more. As long as they produce they get a small base pay and commission based on total loan amount volume in the month.
Read up on whats going on with WaMu.
http://www.bloomberg.com/apps/news?pid=20601206&sid=aFSwsh_NlJYk&refer=realestate
What is considered a closing cost in a mortgage refinance?
2% to 4 % of loan...the only out of pocket might be the appraisal fee and an assignment cost, if you're using a broker. Could be higher if you are buying points. get a "good faith estimate" before doing anything.
origination fee
title insurance fee
underwriters fee
processing fee
fee from your closing company
also you have to remember they will more than likely be setting up a new escrow account for you, so that will show up on your fee's as well (years worth of taxes and half a years worth of insurance usually)
if you need any more help let me know.
Normally how much would it cost me for the closing cost when i refinance?
Closing Costs (or the cost of refinancing)
First, I'd like to debunk the notion of "No Closing Costs", heavily advertised by national marketers and banks. Have you ever heard the expression "There's no such thing as a Free Lunch?". All things in this world have costs to produce, and if you know anything about the companies that produce things, you'll agree that they do their darndest not to pay for them themselves. The cost of originating or refinancing a mortgage average anywhere from 2% to 5% of the balance of the loan, depending largely on geographic location, property type, value of the property, amount of the loan, and of course credit score. Many banks try to foster a notion that they somehow "care" about their customers so they will somehow magically absorb these costs, telling you that they make their money back over the years as you pay interest on the loan, but as a matter of fact the overwhelming majority of mortgages in the USA are sold from one bank to another bank, a servicer or even to Wall Street investors within the first few years of origination. This is so the lender can get more money to write more loans. They don't have them long enough to make back the costs of closing. For a breakdown of closing costs and how they are paid for (even in "Zero Closing Costs" promotions) have a look at the source http://refinanceone.net/wordpress/2007/03/24/should-i-refinance-closing-costs-part-2/
Once you've reviewed the typical closing costs associated with a mortgage, it's time to consider how to pay for them. In a nutshell, costs can be paid in cash at closing, rolled into the loan so there's no out of pocket cost, or paid for by accepting a higher rate than you would qualify for otherwise. More information is available at the same source: http://refinanceone.net/wordpress/2007/03/24/should-i-refinance-closing-costs-part-2/
Cost-Benefit Analysis
Finally, we can turn to the benefits of refinancing and weigh them against the costs.
Once you've decided what your goals are, the reasons you wish to refinance, then it's time to weigh them against the costs. Many borrowers try to compare closing costs alone, however as we know that closing costs can be packaged in many different ways, this is generally ineffective. Because most people who refinance are doing so to lower their total monthly payments, either by changing the type of loan or paying off debts, and in many cases trying to convert their adjustable rate mortgages to a fixed rate mortgage, a more holistic approach is to compare monthly payments across your total monthly spending, with the closing costs rolled in to either the balance of the loan or into a higher rate. To see examples, see source : http://refinanceone.net/wordpress/2007/03/24/should-i-refinance-costbenefit-part-3/
Conclusion:
All loans costs money to originate and refinance, even if it's not always clear how you may be paying for them. Most of the time it's better to roll your closing costs into your loan, so that there is no out of pocket expense to you and the rate doesn't have to be increased. Always remember to see if the loan achieves your goals first, and don't put too much stock in the Good Faith Estimates you receive while shopping around, because people, whether broker or bank, are more than willing to lie to you to beat out their competition initially, so they can lock you into a process which you cannot easily reverse. My recommendation is to speak with as many people as you can, but evaluate them on the basis of trust. You may find that the person who gives you the highest quote may be the only one telling you the truth. This is not a simple subject to discuss, and while we have tried to treat the subject thoroughly, a consultation with a refinancing specialist would be the best way to get answers specific to your situation.
These no cost loans are not "too good to be true" and you should not be wary of them. In the short run it actually makes far more sense to let the lending institution compensate the broker and pay slightly more $$$ each month on your monthly payment. Compare total costs to the slightly increased monthly cost of the loan if you were to take the no cost loan and find a break even point where costs equal what you've payed extra monthly over the long run. If you plan on staying in the house longer than this break even point then pay the origination up front. If you do not see yourself staying in the property longer than this break even point, take the increased rate and have the lender compensate the brokers.
If you have any other questions feel free to drop me a line.
Daniel Algieri
Loan Specialist
(888) 202-2015 x 1491
dalgieri@pacifina.com
What's the deal with "no closing cost" refinancing?
Is this for real, or just another scam? Does your credit rating enter into the picture on whether or not you qualify?
It is a scam, or rather, a marketing ploy. No one works for free and there are hard costs to outside vendors that always have to be paid. In order to avoid the borrower paying these charges the lender charges the borrower a higher than par rate and pays the costs (and their loan fee) with the Service Release premium that the lender pays for delivering the loan at a higher rate.
If you read the very small print you will see the statement that specifies that borrowers who elect to pay the 3rd party fees may receive a lower interest rate as well as the one that says that some fees on the "no cost" refi may be charged up front but refunded to the borrower at closing.
The object of the ad is to make the phone ring, which I am certain it does, but I'd be interested is finding out how many callers actually end up choosing the "no cost" refi at a higher rate and how many the lender is able to convert to a standard refi at the lower rate available.
Credit rating is always involved in purchasing a home or refinancing. In todays world of the "credit crunch" I would bet it is becoming increasingly difficult to obtain and "no closing cost" loan.
Example, You do a refinance and owe 200K on your home, you pay a point and closing costs of around $2200 and get a rate of about 6.375%
OR
You pay no points and no costs and your rate is 6.875% and the person makes 3.5% points in the back end from the lender he uses the money to pay the closing costs , and keep the remainder as his/her commision, NOTHING is free and they always make money, If you are working with a good mortgage professional, they should explain this to you, and also show you the options so you can decide which is best for you
Easy way to determine this:
Take the difference in payments (the 'no closing cost' option has a higher payment) and multiply by the number of months you plan on being in the mortgage. If that number is equal or greater to your closing costs then it's a better deal to pay the points.
Just check around if the rates are the about the same go the one with the best program for you.
Could it be possible not to pay for a closing cost when i refinance?
Since some of the costs of refinancing are paid to outside vendors like appraisers, title insurance companies, etc., and not just the lender, the bare answer to your question is no.
Most borrowers include the costs of refinancing in their new loan amount so that they pay nothing out of pocket.
You can elect to pay no loan fee but expect to get a higher interest rate if you choose that option. That is because the investor will pay the lender to deliver a loan at a higher rate so that is how the lender will be paid for their time and expertise. Look at it this way; do you work for free? Neither does your lender. You are paying for a service.
Are there always closing costs when you Refinance a mortgage?
I'd like to know when it makes sense to refinance a 1st mortgage? What interest rate difference is worthwhile? And if you refi with same bank, can you negotiate the closing costs? Maybe say you will take your mortgage elsewhere?
There are always costs associated with a mortgage, whether it be a refi or a new purchase. These costs are sometimes negotiable (depends on the lender). You can also have the closing costs rolled into the amount of the mortgage, or you can choose to take a slightly higher interest rate in return for lower costs (essentially "paying points").
Just shop around... call at least 4 or 5 lenders and look online. Talk to them and see what they can do for you... it never hurts to ask if there's anyway to lower the closing costs.
Do you have to pay any closing costs when you refinance your home?
I've been in my home for about a year, and with the fed cutting interest rates I've been thinking about trying to consolidate my two loans into one low interest mortgage. I've got 25% through Chase at 8.75% and the remaining 75% through Wells Fargo at 6.25%. I'm thinking about refinancing, but am wondering if I'd have to pay closing costs again. Does anybody know about the process involved? Thanks.
Yes, you have to pay closing costs REGARDLESS of what they tell you.
You'll either pay it in a rate hit, out-of-pocket, or they will roll it into the mortgage...but it will be there.
You will get a Good Faith Estimate and a TIL, just like you did with your original loan that will spell out the terms.
Here is the rule of thumb:
1. Make sure that you are beating your interest rate by a minimum of 1%.
3. Check for a prepayment penalty first.
3. Make sure that your monthly savings outpace the closing costs to 'recoop' in no more than 36 months, or it's not worth it.
For example, if your combined monthly payment is $1,000 per month, and your NEW mortgage payment will be $850 per month, and let's say your total closing costs are $3,000...you take the $3,000 and divide by the $150 per month savings...the figure that pops up on your calculator should be 36 or less.
Make sure you are also, planning on being in the home for longer than the number of months that pops up on the calculator...or else you have refinanced for nothing, and it's just money flushed down the toilet.