Refinancing Your Mortgage

Ksyrup · 02-18-2004, 01:53 PM

An FYI for the home owners out there...

I refinanced back in October of 2002 with Wells Fargo, going from a 30-year to a 15-year mortgage. Unfortunately, my loan-to-value ratio was such that I still needed to pay the dreaded PMI. Housing prices in our area, as in most areas I suspect, have increased significantly over the past couple of years, and I just heard about a house similar to ours in our neighborhood that sold for about $20K more than our house was appraised at just 1.5 years ago. So, I figured I might be able to get out of my PMI with the increased equity in the house with a new appraisal.

The bad news is, I couldn't do that. Long story, but for my particular loan, I didn't qualify (minimum 2 years absent a home improvement). However, the lady indicated that she had some refinance options she could tell me about if interested. So, I figured what the heck - it doesn't hurt to listen. Turns out they have a no closing costs deal, where they pay the PMI, and I was able to get a 10 year refinance at 4.75%. Substracting the PMI savings, my payment is going up about $180 a month, but I'm cutting 3.5 years off my current mortgage and saving $23K+ over the 10 years in interest. For free! And everything is done by mail/UPS - they send 2 sets of documents in 3-5 business days, we sign and notarize 1 set, and we're done.

Flippin' unbelievable.

The moral of my story is...give your mortgage company a call and see what they have to offer.

rkmsuf · 02-18-2004, 01:56 PM

Had a similar experience but so of a gun they called us and I happened to answer one night.

Couple weeks and one meeting later...done. Big savings at 5%...getting rid of the stupid PMI is key...

MacroGuru · 02-18-2004, 01:58 PM

Is this a locked rate? Is it variable interest? Pretty good deal, just curious about it, the big thing around here right now are the LIBOR Loans, that are variable interest but save you a ton of money, however you do deal with the variable rate.

I haven't made my decision yet, I have property ready for me to build on, just haven't done it yet cause I don't know if I want to live here (Property was a gift).

Ksyrup · 02-18-2004, 02:12 PM

10-year fixed rate. They offered a 7 year ARM and a 15 year fixed, both at 5.25%.

Balldog · 02-18-2004, 02:21 PM

Along the lines of home values increasing recently, I purchased my home brand new 2 years ago for $89,000. Had an appraisal done December 2002 at $104,000 and just had another appraisal done this month at $113,000. Nothing has changed with the house other than installing grass.

Draft Dodger · 02-18-2004, 05:34 PM

Quote:

Originally Posted by Balldog

Along the lines of home values increasing recently, I purchased my home brand new 2 years ago for $89,000. Had an appraisal done December 2002 at $104,000 and just had another appraisal done this month at $113,000. Nothing has changed with the house other than installing grass.

we bought ours in '99 for $97,000.
just had it appraised for our refinance/equity loan at $169,000.

and that's with one LESS room, as we were in the middle of remodeling one room when the appraiser came. Since the room was no longer "finished" (we had just torn down all the walls and flooring) he couldn't include it in the appraisal.

Grid Iron · 02-18-2004, 07:21 PM

Quote:

Originally Posted by Balldog

Nothing has changed with the house other than installing grass.

I hope the "grass" you installed isn't the kind I'm thinking of. If so, it's no surprise your home value has gone up!

cartman · 02-19-2004, 04:57 AM

I'm not quite sure of the different requirements for PMI. When I was looking at places in Cali, the loan guy told me PMI was required for anything less than 20% down. But I just bought a place outside of Austin, Texas, and I got a 100% loan, 0% down, and no PMI. WTF?

I went with the 30 year option, and got locked in at 5.5%. Not too shabby. And the house was a foreclosure. Two years old, only been lived in one year, and I got it for $20K less than it's appraised value. Now I just have to get back to the US so I can move in

GrantDawg · 02-19-2004, 03:40 PM

Quote:

Originally Posted by cartman

I'm not quite sure of the different requirements for PMI. When I was looking at places in Cali, the loan guy told me PMI was required for anything less than 20% down. But I just bought a place outside of Austin, Texas, and I got a 100% loan, 0% down, and no PMI. WTF?

I went with the 30 year option, and got locked in at 5.5%. Not too shabby. And the house was a foreclosure. Two years old, only been lived in one year, and I got it for $20K less than it's appraised value. Now I just have to get back to the US so I can move in

Just a novice, but...if you got the house at $20,000 under appraised value, I believe that counts against having PMI (ie. you are basically getting a $20,000 free downpayment).

henry296 · 02-19-2004, 04:39 PM

You don't pay PMI if when the loan to equity is less than 80%. In cartman's case, even though he put nothing down, if he financed 80K and it appraised for 100K, then no PMI. loan to equity is 80/100.

Todd

Marmel · 02-19-2004, 04:48 PM

Some places build the PMI into the rate. I was a loan officer, and my company did.

02-18-2004, 01:56 PM	#2
rkmsuf Head Coach Join Date: Dec 2001	Had a similar experience but so of a gun they called us and I happened to answer one night. Couple weeks and one meeting later...done. Big savings at 5%...getting rid of the stupid PMI is key... __________________ "Don't you have homes?" -- Judge Smales

02-18-2004, 01:58 PM	#3
MacroGuru Coordinator Join Date: May 2003 Location: Utah	Is this a locked rate? Is it variable interest? Pretty good deal, just curious about it, the big thing around here right now are the LIBOR Loans, that are variable interest but save you a ton of money, however you do deal with the variable rate. I haven't made my decision yet, I have property ready for me to build on, just haven't done it yet cause I don't know if I want to live here (Property was a gift). __________________ "forgetting what is in the past, I strive for the future"

02-18-2004, 02:12 PM	#4
Ksyrup This guy has posted so much, his fingers are about to fall off. Join Date: Nov 2000 Location: In Absentia	10-year fixed rate. They offered a 7 year ARM and a 15 year fixed, both at 5.25%. __________________ M's pitcher Miguel Batista: "Now, I feel like I've had everything. I've talked pitching with Sandy Koufax, had Kenny G play for me. Maybe if I could have an interview with God, then I'd be served. I'd be complete."

02-19-2004, 04:57 AM	#8
cartman Death Herald Join Date: Nov 2000 Location: Le stelle la notte sono grandi e luminose nel cuore profondo del Texas	I'm not quite sure of the different requirements for PMI. When I was looking at places in Cali, the loan guy told me PMI was required for anything less than 20% down. But I just bought a place outside of Austin, Texas, and I got a 100% loan, 0% down, and no PMI. WTF? I went with the 30 year option, and got locked in at 5.5%. Not too shabby. And the house was a foreclosure. Two years old, only been lived in one year, and I got it for $20K less than it's appraised value. Now I just have to get back to the US so I can move in __________________ Thinkin' of a master plan 'Cuz ain't nuthin' but sweat inside my hand So I dig into my pocket, all my money is spent So I dig deeper but still comin' up with lint

02-19-2004, 04:39 PM	#10
henry296 College Starter Join Date: Oct 2000 Location: Pittsburgh, PA	You don't pay PMI if when the loan to equity is less than 80%. In cartman's case, even though he put nothing down, if he financed 80K and it appraised for 100K, then no PMI. loan to equity is 80/100. Todd __________________ "It's a great day for hockey" - "Badger" Bob Johnson

02-18-2004, 02:21 PM	#5
Balldog Pro Rookie Join Date: Jan 2002 Location: Macomb, MI	Along the lines of home values increasing recently, I purchased my home brand new 2 years ago for $89,000. Had an appraisal done December 2002 at $104,000 and just had another appraisal done this month at $113,000. Nothing has changed with the house other than installing grass.

02-19-2004, 04:48 PM	#11
Marmel Grizzled Veteran Join Date: Oct 2000 Location: Manchester, CT	Some places build the PMI into the rate. I was a loan officer, and my company did. __________________ 81-78 Cincinnati basketball writer P. Daugherty, "Connor Barwin playing several minutes against Syracuse is like kids with slingshots taking down Caesar's legions."

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