1. Sign-up to become a member, and most of the ads you see will disappear. It only takes 30 seconds to sign up, so join the discussion today!
    Dismiss Notice

Refinancing a home, what is involved?

Discussion in 'After Hours Lounge (Off Topic)' started by Travis Hedger, Dec 13, 2003.

  1. Travis Hedger

    Travis Hedger Supporting Actor

    Joined:
    Mar 24, 1998
    Messages:
    695
    Likes Received:
    0
    Trophy Points:
    0
    After deciding to look at a refi calculator on bankrate.com it turns out at today's interest rates, and even if I go a bit higher, I can save between $100 and $300 a month, depending on if I go 15 or 30 years on my home. My current rate (obtained in Dec of 2000) is 7.875%, Bankrate.com is showing approximately 5.66%, I rounded high at an even 6% to see the savings that would be shown above.

    Here is the issue though, my credit is crap as my wife and I just completed a joint bankruptcy, due to her not working for a very long time, and me being laid off 2 times since June of 2001. I now have a much better paying job than ever, and she started a fulltime job in Nov so we now have a decent income again. Refinancing would be even better as it would be more $$$ in our pockets. Should I wait a bit for my credit to build back up with a single card that we pay off each month with grocery and gas expenses or should we at least see if there are any options.

    This week alone I have gotten 4 letters from different dealerships all wanting me to buy a car. (getting kind of annoying there lol).
     
  2. Scott Merryfield

    Scott Merryfield Executive Producer

    Joined:
    Dec 16, 1998
    Messages:
    12,821
    Likes Received:
    1,371
    Trophy Points:
    9,110
    Location:
    Michigan
    The recent bankruptcy may put you in a high risk loan category, which would then force you to pay a higher interest rate. The only way to know for sure is to meet with a finance company or broker and explain your situation. Many places do not charge anything for an initial meeting.

    We've had very good experience working through Rock Financial on two refinancings early this year. I'm not sure if they have offices in Oklahoma, but if so I would highly recommend them for an initial consult.
     
  3. DaveF

    DaveF Moderator
    Moderator

    Joined:
    Mar 4, 2001
    Messages:
    19,161
    Likes Received:
    1,971
    Trophy Points:
    9,110
    Location:
    Catfisch Cinema
    Real Name:
    Dave
    Don't forget to account for the cost of the re-finance. I understand it costs $1000-$3000 to refinance. So if for example the re-fi costs $2400 and you save $200/mo, it takes 12 months before you really start saving money.
     
  4. Scott Merryfield

    Scott Merryfield Executive Producer

    Joined:
    Dec 16, 1998
    Messages:
    12,821
    Likes Received:
    1,371
    Trophy Points:
    9,110
    Location:
    Michigan
     
  5. Travis Hedger

    Travis Hedger Supporting Actor

    Joined:
    Mar 24, 1998
    Messages:
    695
    Likes Received:
    0
    Trophy Points:
    0
    Thanks for the info, but wouldnt the fact that the house would be collateral be a factor in helping a lower interest rate? It would be a secured loan.
     
  6. Jeff Ulmer

    Jeff Ulmer Producer

    Joined:
    Aug 23, 1998
    Messages:
    5,584
    Likes Received:
    0
    Trophy Points:
    0
    With a savvy broker, your refinance costs should be minimal or nothing - but make sure to find out any hidden costs that may be involved - legal, penalties, appraisals, etc. I would agree the bankruptcy could and probably will hurt you, but you don't know until you ask. There should not be any fees from a broker, as they are paid by the lender.

    If you do refinance, I would recommend the shortest amortisation you can handle. All those extra years add up to tens of thousands of dollars, and a much slower accumulation of equity. You may want to wait until the anniversary date of your present mortgage, so you aren't dinged with an interest penalty frmo your existing lender. Also, many lenders will offer you a no charge blended rate as an option. They want to lend, so just ask what your options are, and the more they think they will lose your business, the better off you are.
     
  7. KurtW

    KurtW Stunt Coordinator

    Joined:
    Nov 13, 2002
    Messages:
    67
    Likes Received:
    0
    Trophy Points:
    0
    Having just finished re-financing (and obtaining a home equity line of credit within about 3 months of each other), I can defiantly concur with the notion of shopping around. A good broker is a decent idea as well, as they seem to specialize in keeping the fees and such low. I'd check with your current morgage company first, see what they'll do for you. That's what I ended up doing, and when I refinanced, half of the costs were null because they already had all the information on file they required.

    Another piece of advice I can give you is read the financials, and pay attention to the interest rate, so that you can lock in on the best rate when it hits. I managed a 4.875% when rates were still at rock bottom, now I see around 6.0% or so when I look. It varies day by day though.

    It's worth the effort to read everything about it you can, and read everything before you sign it just to CYA. The biggest benefit to me was I was able to get rid of my morgage insurance (which is the biggest load of CRAP I've ever encountered, btw) and use the equity in my home to pay off all my credit card bills. And it's tax deductable!

    Good luck.
     
  8. Scott Merryfield

    Scott Merryfield Executive Producer

    Joined:
    Dec 16, 1998
    Messages:
    12,821
    Likes Received:
    1,371
    Trophy Points:
    9,110
    Location:
    Michigan
     
  9. DonRoeber

    DonRoeber Screenwriter

    Joined:
    Feb 11, 2001
    Messages:
    1,849
    Likes Received:
    0
    Trophy Points:
    0
    Funny story. I recently called my mortgage company about refinancing. They were able to offer me a 1% less than what my current rate is, but after all of the charges for refinancing (they wouldn't wave any), it was actually going to cost me more per month for the next 10 years.

    Rediculous. I'm not actively shopping to refinance my home, but if something good comes up, then I'll probably take advantage of it.
     
  10. LDfan

    LDfan Supporting Actor

    Joined:
    Nov 30, 1998
    Messages:
    724
    Likes Received:
    0
    Trophy Points:
    0
    If you have an FHA mortgage you can do a 'streamline' refinance. This allows you to refinance without having to do any credit checks. I think the gov't only allows this to be done once though.

    Jeff
     
  11. Travis Hedger

    Travis Hedger Supporting Actor

    Joined:
    Mar 24, 1998
    Messages:
    695
    Likes Received:
    0
    Trophy Points:
    0
    Im am on my first home and I am in the FHA program. Good stuff to know guys! Thanks!
     

Share This Page