I'm posting this for my sister. I told her this board gave me some great advice, so I would throw her situation out there, hoping someone had some answers or could offer her some guidance. Here goes: Her current rate is 8.8% with Bank of America. She wants to refinance, but does not have the money to do so. Her husband was laid off 3 months ago and is currently collecting unemployment, so money is very tight. They have been in their home since 1984 and refinanced sometime back in the early 90's. She's had a couple recent late payments on her credit cards of 30 days, but her mortgage has never been late. Their Fico scores are in the mid 600's. She isn't sure if this helps or not. Any ideas or suggestions, would be greatly appreciated. Thought I'd ask here before she goes on a wild goose chase.
"NO OUT OF POCKET" RE-FI It costs a "HIGHER" interest rate, BUT SO WHAT!!! Even if it is 6%...she is better off...(EVEN 7%)...if it is >7%...CAUTION ADVISED They are advertising 4%-5% where I live...
Thanks for the response! Is there a specific lender she should seek out for this type of "No out of pocket" refinancing, or should she just search around? I agree 6 or even 7% is way better than 8.8%.
Re: Re: Refinancing Options--No money Look in her local paper in the REAL ESTATE sections...some others are in the paper in just about every section...
Re: Re: Refinancing Options--No money This board is a great place to ask this question: http://www.creditboards.com/phpBB2/viewforum.php?f=9
Re: Re: Refinancing Options--No money Try the Fleet 20 year home equity loan. I did this to refinance my own home. There are absolutely no costs for this. Many lenders will tell you there are no out of pockets costs. What they are doing is adding the costs to the amount you are financing. This is NOT how the 20 year home equity loan through Fleet works. With this program, there are literally no fees. There is a penalty fee of $250 if you pay off the loan in less than a year (like that's really gonna happen) I financed 80% LTV and choose to have my payments debited from a Fleet account (this gives you .25% off the rate), so my rate was 5.99 for 20 years. I know you can refinance in a traditional route for a lower percentage, but then you will have closing costs (even if you don't pay them, they could be added to the financed amount). This was the right choice for me. btw - Fleet only pulled TU for me to approve me. I am in NY.
Since they have been in the home so long and probably have a lot of equity, they can do a cash-out refinance and pay off their other debt. In this way, they're very likely to pass debt-to-income even though they just have her income. It's probably a good idea anyway, if she's been late of a few credit cards lately, it's may be because money is tight with his unemployment, and this will reduce the stress. Closing costs can be financed into the loan, she doesn't need to pay anything out of pocket. Contrary to what George says, this does not get you a higher rate. It's normal for a lender to require a deposit, but when money is tight with my customers, I work with them on that. I bet plenty of other lenders will too. If her mortgage right now is a government backed loan, FHA or VA, she can also look into getting a streamline or an IRRRL. These loans are great in that you can lower your rate without verifying credit and income, without getting a new appraisal, and the underwriting is waived. What you sister really needs to do is talk with a lender who will go over her options with her, and help her pick the right one. Free advice on a message board only goes so far. Refinancing with a HELOC...it's the right choice for some people, but one important thing to remember is that those loans are adjustable.
Re: Re: Refinancing Options--No money WRONG!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! A home equity loan is a fixed payment installment loan and the Fleet loan is a 20 year loan. You are thinking of a home equity line of credit. That is something completely different. btw - With this Fleet loan, there are NO fees at all, no deposit , no application fee, etxc.
Re: Re: Re: Refinancing Options--No money Lol! That got you excited, did it? I was. It's what most people refer to when they say home equity loan, but there are fixed options available as well. I'm glad you found one that fits your needs. At the same time, you used a second mortgage product to cover a first mortgage need. This is a great option for the creative financier when they want to offer savings on a small loan amount, but for the more standard loan amounts, the savings on rate more than makes up for the costs of doing the traditional mortgage loan. It's great that you're satisfied with the deal you got, but it's not the best option for most people.
Re: Re: Refinancing Options--No money Contrary to what George says, this does not get you a higher rate. I'm not saying like 2.00% it could be 0.50% or even 0.25%...but they "USUALLY" get a higher rate when you pay NO FEES OF ANY KIND...SO I WAS TOLD...(I GUESS I COULD HAVE BEEN LIED TO)...
Re: Re: Re: Refinancing Options--No money Well, let me rephrase that. You havn't been lied to, we're just talking apples and oranges here. In refinancing, most people choose to finance the costs of the loan into the new mortgage. There are fees, title, appraisal, underwriting, etc, but these costs are just added to the loan amount so the customer doesn't pay anything out of pocket to get the new loan. This doesn't change the rate, that's the same as it would be if the customer had paid these fees out of pocket. A "no cost" refinance is different. Here the lender pays the costs of doing the loan, so they're not added to the loan amount. To cover this, the lender charges a higher rate, the lender gets more money for that loan from the investor, and uses the difference to pay the costs that are usually passed on to the customer. No cost refinances are usually best for people who could benefit from a lower rate, but don't think they will have that mortgage long enough to recover the costs in rate savings alone. Someone who thinks they may sell soon or who feels rates may fall even lower (and they will be refinancing again) often chooses this type of loan.
Re: Re: Refinancing Options--No mon Dear Other, I am interesed in the 20 year refi mortgage you received from FLEET. Can you give me more specific details? How much did you borrow? how much are you payments? Did you use any of the new loan to pay off CC debt. Did you have to have an appraisal,etc? Currently our mortgage is 6.9% with BofA. we took it in Febuary of 02 /15 years payment 382.24 - payment does not include tax and insurance which are now about $112 per month. Our CC debts today total 19,400 - all debt is currently on zero offers, but how long these rates will last... will it be until we get all paid off? Would I be crazy to even consider trading non secured debt for secured? Our home is probably market value of 90-100's and is approaching 30 years old. We are needing some updates, roof, carpet/floors, central air/heat but to strapped to do any major updates. ~Cherie , looking forward to your response and any others
I don't know if BofA offers this but ask them to "streamline" refinance her current mortgage. I am doing that thru Chase now (my current lender) and I'm going from 8.875 to 5.5%! There are NO credit checks either. They ask my income and debts, I told them and they sent it for approval and I was approved. If she has good credit with her current lender she might want to talk with them first. Like the guy at Chase told me he wanted to help me out all he could as if not I'd most likely go somewhere else! And, my closing costs (about 1K) are being added into the mortgage and all I need to come up with is the appraisal fee (350.00). I told him I didn't have that right now and he said he'd order the appraisal anyways and add it into the closing. So, my advice is to ask. The worse they could say is "NO" and if they refinance her she'll save alot of MONEY....I'll be saving 150/mo plus cutting off 2 yrs from my term (currently 25 yrs loan but paid into it 3 yrs already so we have 22 left). We're refinancing into a 20 yr note too.
Re: Re: Refinancing Options--No money Wow I have a HELOC (Home equity line of credit) and it's variable. I would never refinance into a variable rate YIKES
Re: Re: Re: Refinancing Options--No mon There was no "appraisal" required. They do have a company they use to determine the market value of your house. They initially came back with a low value for my house ($112k). I was then able to dispute the value by submitting CMA to them. I used www.housevalues.com to request a CMA. When I received it, I faxed it in. They modified the value they would use to ($130k) which is still lower than what my house is worth. I financed 105k with the home equity loan. It's a 20 year term at 5.99% with payments around $750. They do not escrow anything, so you are responsible for paying you insurance and taxes on your own. I also opened a home equity LOC at the same time with a limit of 25k. I can't remember the rate for sure, but it is either 6.24 or 6.49. There is a $50 annual fee. But I don't have a balance on that account. As far as trading un-secured debt for debt secured by your house, that is a very personal decision. If you do it, you need to know that you will be disciplined enough to not rack up the credit card debt again. You also need to realize that if you stretch your payments over 10-20 years, you will end up paying more interest in the long run. Also, you need to be secure in your job situation. If you have credit card debt and lose your job, it is not as bad as having your debt secured by your house and not being able to pay it. There are many variables and you need to decide what is right for you.
Re: Re: Re: Re: Refinancing Options--No money Are you saying that 105k is a small amount and is not a standard loan amount? I don't consider it a small loan amount and I don't think most people would. It is 80% ltv based on Fleet's value of my house. In fact, Fleet markets it specifically for mortgage refinancing and requires a minimum amount of $75,000 for the loan. I never said this was the best product for everyone, however, it is the best product for anyone that does not want ANY fees. In fact I spent alot of time looking for one with no fees, and this was the only one I could find. There are many that can add the closing costs to the amount financed, but even with these, there are certain fees that cannot be rolled in such as an application fee, credit report fee, fees to setup escrow, etc. Where I live, these fees are still 1-2 thousand on top of the other closing costs that would be added to the financed amount. Since I am planning on moving in a couple of years, I did not want any fees. For someone who is really tight on money and cannot pay even application fees, the Fleet loan may be the way to go. Additionally, since they do not pull a tri-merge report, it is also good for people who have a good TU report desipte having problems with EQ and EX. At least here in NY they only pulled TU. I never said the Fleet loan was the answer for everyone, but it could be the answer for a lot of people. I was merely presenting it as an option.
Re: Re: Re: Re: Re: Refinancing Options--No money Well then it's not a second mortgage product after all. Kudos for finding a deal that fits your needs so well!
