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Mortgage Rates (2 Viewers)
- Thread starter MechEng
- Start date
culdeus
Footballguy
Those that managed to sit out this RE cycle renting and stock market cycle lost a generation of wealth. Never have so many people been left behind with no real manner to catch back up.
Ignoratio Elenchi
Footballguy
I’ve now refi’d my mortgage twice in the last year and wanted to check back in here and share my experiences.
Quick background, last year I did a cash-out refi to make some home improvements. I did some rate shopping online and landed at credible.com. Super easy process since everything was online, took about four weeks IIRC from start to finish. The loan was from Rocket/Quicken, but there were no issues from my perspective. I got the rate and the terms I wanted with no hassle. When I mentioned it in the thread a while back @Chadstroma remarked:
Fast forward to about a month ago and I noticed rates had dipped even lower than they were when I refi’d last summer, so I figured why not? and started shopping around online again. This time I landed at better.com, but remembering Chad’s advice I reached out and he quickly put me in touch with a broker in my state.
I shared the loan estimate from Better with and he said he’d be able to beat it. But when I got the loan estimate from him it was actually about $2k higher than what Better had quoted. When I pointed this out, he claimed his price was in fact lower and asked me specifically what was cheaper on the Better estimate. The answer was pretty much everything (and it felt silly to have to answer that question in the first place since he already had a copy of Better’s loan estimate). The only thing that was cheaper on the broker’s estimate was the points (I opted to pay a little for the lowest rate since I have no plans to move and the savings will pay for themselves before the end of next year), but the difference was more than wiped out by what appeared to be about a $3,500 commission (!!).
Went back and forth a little bit but long story short, Better's estimate was always substantially less than the broker. Just closed the middle of last week, was maybe three weeks in total from start to finish.
I have to admit up front I was skeptical that going through a broker would work out much better. But I was intrigued by Chad’s advice and figured it was definitely worth a shot. Not sure if my experience is typical but I have to say from my two times through the process now, these online companies are tough to beat. They make the whole process so easy and both times I've gotten the price I wanted with very little hassle or haggling.
Most importantly though I have to thank Chad - he’s doing amazing work in this thread and I am really appreciative that he very quickly put me in touch with someone as soon as I reached out. I ended up not making a deal with his guy but it definitely was good to get another set of eyes on things and I am truly thankful for that and for all the advice that has been shared in this thread.
Quick background, last year I did a cash-out refi to make some home improvements. I did some rate shopping online and landed at credible.com. Super easy process since everything was online, took about four weeks IIRC from start to finish. The loan was from Rocket/Quicken, but there were no issues from my perspective. I got the rate and the terms I wanted with no hassle. When I mentioned it in the thread a while back @Chadstroma remarked:
Fast forward to about a month ago and I noticed rates had dipped even lower than they were when I refi’d last summer, so I figured why not? and started shopping around online again. This time I landed at better.com, but remembering Chad’s advice I reached out and he quickly put me in touch with a broker in my state.
I shared the loan estimate from Better with and he said he’d be able to beat it. But when I got the loan estimate from him it was actually about $2k higher than what Better had quoted. When I pointed this out, he claimed his price was in fact lower and asked me specifically what was cheaper on the Better estimate. The answer was pretty much everything (and it felt silly to have to answer that question in the first place since he already had a copy of Better’s loan estimate). The only thing that was cheaper on the broker’s estimate was the points (I opted to pay a little for the lowest rate since I have no plans to move and the savings will pay for themselves before the end of next year), but the difference was more than wiped out by what appeared to be about a $3,500 commission (!!).
Went back and forth a little bit but long story short, Better's estimate was always substantially less than the broker. Just closed the middle of last week, was maybe three weeks in total from start to finish.
I have to admit up front I was skeptical that going through a broker would work out much better. But I was intrigued by Chad’s advice and figured it was definitely worth a shot. Not sure if my experience is typical but I have to say from my two times through the process now, these online companies are tough to beat. They make the whole process so easy and both times I've gotten the price I wanted with very little hassle or haggling.
Most importantly though I have to thank Chad - he’s doing amazing work in this thread and I am really appreciative that he very quickly put me in touch with someone as soon as I reached out. I ended up not making a deal with his guy but it definitely was good to get another set of eyes on things and I am truly thankful for that and for all the advice that has been shared in this thread.
The Z Machine
Footballguy
This asset appreciation cycle will grow the wealth gap considerably. I'm not advocating for lower asset prices (well OK, more moderate and steady growth would be better) but it's a shame that many will miss out on this and be further behind. Especially if coupled with commodity and retail price inflation without commensurate wage growth, as purchasing power will decrease without asset appreciation.
culdeus
Footballguy
I'm legit at the point where I really just have to get the kids out of the house and I can downshift. I'm surrounded by people that aren't even clear of student loans and have 401k loans behind that. Even a monster pullback in stocks won't hurt me much now.
Yeah things can go completely apocalypse sideways but even a black swan event I might live thru.
It takes all my self control to just not write a check for this mortgage I got and stay liquid in the market.
Chadstroma
Footballguy
Desert_Power
Footballguy
I've been using the same broker here in NC on the last few refis we've done across our home and former rental. If I were to buy a rental in another state, would it be best to find a broker in that state? Can you get a mortgage after buying a place in cash easily?
Chadstroma
Footballguy
If you just bought (or will buy) you can do delayed financing. I believe off the top of my head that you can do that for an investment property as well but not 100% sure.Desert_Power said:
Brokers are licensed by state. Some brokers are licensed in a couple of states. As an example, I am licensed in CA, IL and VA (FL is pending my fingerprints) and my brokerage is in a few more states. That is why I refer to other brokers for FBG's who wanted connections in other states. I have connections with many of the best brokers in the country and can refer to all states and even Puerto Rico. I am happy to connect anyone with a broker or you can use www.findamortgagebroker.com to search. If you want me to give an intro, just shoot me your contact info and the state you were wanting a loan in and I will have them reach out.
Chadstroma
Footballguy
Chadstroma
Footballguy
I think you are getting the bi-weekly payment (which adds another payment a year) mixed up with paying extra principle on a 15 year amortization schedule.
They both are doing the same thing which is paying extra principle to speed up paying off the loan quicker. It is just how you do it. Proponents of the bi-weekly payment make it sound like it is magic but all it is is taking 52 weeks and making 26 half payments which means 13 monthly payments a year. So, each year, you are making one full payment to extra principle. The nice thing is that is "simplifies" the payments. The negative is that not all servicers will accept this and you typically need to sign up into their program if they do accept payments like that.
Otherwise, you can make extra principle payments each month. Either separately or within your normal payment. Just ensure the servicer is appplying the payment to extra principle.
Which is best? It doesn't matter. Whichever fits for you. Paying extra principle gives you more flexibility to pay more or less depending in your desire and financial situation. Other than that, there is no real big difference.
Chadstroma
Footballguy
Dear dude who tells me that he won't to the refinance for anything higher than X amount which is slightly lower than what my best rate at this moment is and I tell you I will monitor and let you know if rates fall to that point. If you then ask me to send a breakdown of the closing costs to which I reply sure, if rates get to the point you will consider the loan, I will happily put in the time and effort of getting that to you but if not I don't have that time to waste right now... you don't get to get mad.
flapgreen
Footballguy
So this deal fell through. Last day to close was today on this. Over the last few weeks, we were actually hoping he didn't come through. Giving the guy back his 25k.
Spoke with a realtor friend and also checked in with OpenDoor on what we could get now. Ended up getting an offer from OpenDoor this afternoon for 55k more than what we were going to sell it to the first guy for and that's after all the fees. Firm offer with no way of them tacking on extra deductions. Totally crazy. Bought our home for 350 2 years ago in Nashville suburb. Sold for 500 today. Walking away with 225 in the bank.
KGB
Footballguy
congrats! I'd make about the same I think if I sold. But, where do you go then to live?
flapgreen
Footballguy
That was easy for us. I got a government job on a military base in Missouri and it's dirt cheap out here, so that wasn't an issue. Otherwise, we obviously would've stayed in that house. Now, when we're ready to buy again in a couple years and get to a location we plan on staying, that's another issue.
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Courtjester
The Town Drunk
We are using them now. Our mortgage company called earlier in the week and asked if we wanted to do an account review and Amerisave was the company that did our review. It took an hour of our time and we are already approved within a day. No appraisal needed We did a refi from a 30 to a 25 two years ago and our house was appraised at 325,000 then. The guy doing our review said our house is worth over 410,000, which to me, is low because the small house next to us just sold for 360,000 and it is a 3 bedroom, two bath unfinished basement. Our house is 5 bedroom, 4 full bath, finished basement.
The rep with Amerisave has been on the ball and has communicated with us all day. He said we will close the first week of July, skip two mortgage payments and get a nice escrow refund, which the wife has said I can use for to get a new tv--so total bonus!!!
Chadstroma
Footballguy
Chadstroma
Footballguy
A few points (for clarification purposes)...
Appraisal waivers are determined by Fannie/Freddie (if conventional) and not the lender, so that would be the same regardless of what lender you go to.
He likely looked up the value in a valuation estimator which in this kind of market will be a but behind on value almost always. It is pretty easy to do, specially when the borrower just
when you ask how much the house is worth. Skipping two payments is standard depending on when you close and when you pay your mortgage. For example, if you closed on your loan (signed docs) Monday, the 28th, the loan would fund in July. You would then not make a payment for July, August is skipped and first payment is due Sept. If you closed later in the month, you can do this all the way until the end of the month. However, if the funding of the loan is past the 15th then you would be charged a late fee on the current mortgage, so you can then decide what is more important to you- not paying a late fee or not paying a mortgage payment for a month.
The escrow refund is not extra money. Assuming you are still escrowing with the new loan, you will fund the new escrow account. The balance in the old escrow account is mailed to you once the old loan is paid off. The funding of the new escrow account is usually higher since you are not making one or two months worth of payments into it.
I would advise you to take your Loan Estimate and shop it with a broker. Best case- you end up savings thousands. Worst case- you get the peace of mind that you really do have a great deal with Amerisave. Good luck!
Dragons
Delusions of Grandeur
And DO NOT pay a fee to enter a bi-weekly program. I saw this a few years back, not sure how common it is now.
Dragons
Delusions of Grandeur
We are in the middle of a kitchen renovation. We are expanding the kitchen into our 3 season room (also called a Breezeway in these parts) while converting the 3 season room into living space. We will add about 250 square ft. in total, while renovating and expanding our kitchen.
We also need to add a second floor renovation soon (like next year), to add an additional bedroom and master bathroom.
I have a HELOC to pay for the kitchen renovation. Once it is finished, I am to refi, pay off the HELOC and probably max out to 80% LTV to provide some funding for the next second floor renovation.
Are there any pitfalls I should be aware of?
I assume I'll pay a slightly higher rate for a cash out refi. We refi'd last year to 3.125%, so even with the cash out, it seems like we should be on par or better.
We also need to add a second floor renovation soon (like next year), to add an additional bedroom and master bathroom.
I have a HELOC to pay for the kitchen renovation. Once it is finished, I am to refi, pay off the HELOC and probably max out to 80% LTV to provide some funding for the next second floor renovation.
Are there any pitfalls I should be aware of?
I assume I'll pay a slightly higher rate for a cash out refi. We refi'd last year to 3.125%, so even with the cash out, it seems like we should be on par or better.
STEADYMOBBIN 22
Footballguy
Closed on our Wednesday. Went from 4 flat to 2.875 for 30 years. Dropped our payment by almost $300.
Guy also mentioned that we were paying too much for home owners insurance and after a phone call to my insurance company we went from paying $2400 to 1,200 Annually.
Thanks so much for the referral @Chadstroma
Guy also mentioned that we were paying too much for home owners insurance and after a phone call to my insurance company we went from paying $2400 to 1,200 Annually.
Thanks so much for the referral @Chadstroma
Chadstroma
Footballguy
The amounts of everything we are talking about make a big difference on what you should do or not do.
In general, the larger the numbers we are dealing with (but below Jumbo) then you may want to look to do a cash out... especially if the cash out amount is larger. Essentially it comes down to what rate can you get on a cash out refi, how much will it cost to do that versus how much the rate you will have on the HELOC and how long it will take to pay off (since it is variable and that bad boy will be going up and likely quickly in the not too distant future).
Chadstroma
Footballguy
Yea... I see insurance high with people a lot.
A few tips with insurance. Stay away from captive agents (Allstate agent or State Farm agent, etc) as they can only do one thing- sell you their companies insurance. That is their job. To sell that companies insurance. Check with an Insurance Broker who can sell you the best insurance priced for you. I shopped 10 captive agents and one insurance broker. The broker easily beat them all. Plus, you can shop with him and he can shop for you and still work with the same guy getting the best insurance each year.
Another reason to not use captive agents. They are absolutely useless with claims. They have NO power at all. They are just a sales person. However, an Insurance Broker has some leverage (as backwards as this may seem) because if the broker goes to bat for you they can actually tell the company that they will not send any more business to the insurance company if they don't do more or fix the issue etc.
Definitely shop each year. Every two years at most. Insurance knows that most people don't shop every year so they will creep up the premiums to get more out of you as they expect you to not notice or not be driven to shop them.
When you shop- make sure your shopping apples to apples coverage and not having one insurance guy cut out coverage in order to make the premium better and win the business but screw you over.
Dragons
Delusions of Grandeur
Thanks, the entire refi would be well under jumbo limits (is Jumbo really ~$550k now?). The HELOC is a significant amount (over 25% of my mortgage balance), so would take several years to aggressively pay off. With the recent hot market and whatever extra value we are adding with the renovation, my best guess is that we'll have about 45% equity after an appraisal.
I assume that a new appraisal completely incorporates the new sq. ft. and that they don't go off previous data. Is there a formal way to initiate this or is it built into the refi process? I've refi'd numerous times over the years, but not after making significant changes to any property.
dkp993
Footballguy
Interesting. This isn’t lining up with my current situation. Currently I’m scheduled to close July 27th. September 1 is my first scheduled payment according to my broker. Why would that be?
Chadstroma
Footballguy
Closing is the 27th, then there is a 3 day right of rescission which ends on the 30th. 31st is a Sat so the loan will fund in the 1st.
Chadstroma
Footballguy
There are rehab loans but likely not the route you want to go. Appraisal would be based on before work is done.
I would say worth taking a look at cash out refi based on that info. Feel free to reach out to me and I can connect you to someone licensed in your state to explore the options. Just don't start construction yet.
dkp993
Footballguy
So what does this mean? If I pushed close to 7/28 it would push the payment back a month?
Chadstroma
Footballguy
You actually should fund in August if signing on the 27th so I am not sure what the issue is.
Also, why is closing so far off? Only loans with appraisal issues or this one old couple I have that have no internet/email take that long.
dkp993
Footballguy
The seller asked for a closing date of 7/27, sited “tax purposes”. As this was the 6th house we’d bid on (25 to 30 competitive bids on every property we went after) and lost we were happy to concede if it meant we won the bid.
What do you advise I say to my broker to push that extra month?
dkp993
Footballguy
Chadstroma
Footballguy
Ohhhhhh, purchase.
That is different. On a purchase there is no rescission period. The loan funds on closing date.
You would have to push the closing date into August.
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dkp993
Footballguy
Dragons
Delusions of Grandeur
Do you mean appraisal would be based on before work is done for the rehab loan?
We are actually already 2 weeks into the renovation, so if there's some benefit to getting things lined up ahead of time, I already screwed the pooch.
I do still have the contact info for the guy you gave me in CT last year. I assume your recommendation hasn't changed, but I'll PM you in a month or two when we're closing down the renovation to make sure.
Chadstroma
Footballguy
Rehab loan is after but you really don't want to go that route. You have the equity to do a regular cash out.
With the work you are doing you wouldn't be able to do loan. Once completed, definitely look into doing a refi to pay off the 2nd as well.
Yea, reach out to them when done.
Closing tomorrow on a 30 year at 2.875. Basically getting paid to do it. Appraisal, title fees, transfer taxes, etc was about $2600. Got a lender's credit of $4600. The extra $2000 covers the June interest for my current loan and prepaid interest for July on the new loan. I have to bring cash to close, but that essentially covers the prepaid property taxes which I would have paid anyway. And I get a bunch of escrow back from the current lender. All in all, super happy with this.
I did go through a retail lender, which Chad would frown upon. But the broker I used to refinance last time didn't return my email and so I just said screw it - the rate I was getting was good enough and as discussed above, the loan cost me nothing.
I did go through a retail lender, which Chad would frown upon. But the broker I used to refinance last time didn't return my email and so I just said screw it - the rate I was getting was good enough and as discussed above, the loan cost me nothing.
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Chadstroma
Footballguy
It isn't impossible to get a good deal elsewhere. In the end, it just matters that you got a good deal. Congrats
Chadstroma
Footballguy
Rates have edged down a bit. If you are one of the several million that haven't taken advantage of the savings offered by a refi... jump on it. Not sure how long this will last. To be honest, I am shocked that we are where we are rate wise this far into 2021.
Chadstroma
Footballguy
Oh yea, it has been crazy... lot's of waiving inspection, financing, appraisal contingency's, etc. On top of the bidding over asking prices.
I heard from a fellow broker of a property that the buyer waived all of those, bid $80K over the $400Kish asking PLUS paying for ALL sellers costs.
For the record, I would never, ever, ever waive an inspection contingency. That is pure insanity to me. Financing, meh, not a big deal if you are well qualified and don't do anything stupid. Appraisal contingency... well, if you are paying over asking/value- what is the point of it anyways? But inspection. NEVER. Hard stop right there.
Before we bought our current home in 2012 we bid on a home built in late 1970's. Needed some updating but overall seemed in good shape. The seller and/or realtor must have been absolute morons. This was the peek of the buyers market. Here is the run down on what happened.... the verbally accepted in the evening. Next day when we are to sign they back out and went with another offer. My realtor dug in... the other offer was 30% down versus our 20% which is why they went with it... BUT theirs was contingent on a sale! What moron does that in that kind of market?! So, sure enough, about a month later, it is back on the market. I put another bid in right away but cut it by $5K. They verbally accepted again. Then came back and asked for something that wasn't a big deal (I don't even remember what it was) and I agreed. Then again for something not a bid deal... again, I agreed. Then they came back and asked to waive the inspection contingency. HELL NO. This was all because they had another bidder. The loan they had was an FHA loan which even the most green realtors should know has an inspection within the appraisal that can not be waived even if you waive the inspection contingency, if it fails and no agreement is made, it would fall under financing contingency anyways. My wife was so upset after this (this is the end of a very long and ridiculous search on homes with contracts signed and fallen through) she said screw it. I happened to see another property we had negotiated on but were too far apart a few months earlier was on the market again... I asked my realtor to put a bid in again as time passed and maybe they were more willing.... and now I am typing this in that properties master bedroom 9 years later. Anyways.... NEVER will I waive an inspection. Never.
dkp993
Footballguy
I’m currently in escrow on a home in SoCal but prior to winning this bid was in 6/7 bidding wars for homes prior. Lost one to a “10k over what ever the top bid is and no inspections, all cash 14day close” offer. It’s ####### nuts out there!
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Chadstroma
Footballguy
dkp993
Footballguy
Charlie Harper
Footballguy
pollardsvision
Footballguy
Finally got around to refinancing the house, but a streamline with my current lender seemed like about the only route to go. I own a restaurant and throughout the last year, every mortgage person I spoke made it clear that lenders were very hesitant about small restaurant owners right now. Plus I'm way behind on P&L's and just not prepared for the financial colonoscopy that would be required.
So, I went to my current lender and asked if they could just do a little better. About 30 minutes on the phone and about 5 emails dropped my rate a full percent and knocked $150 off my mortgage payment.
Not perfect, but a nice low hassle way to get a taste of these rates while they last.
So, I went to my current lender and asked if they could just do a little better. About 30 minutes on the phone and about 5 emails dropped my rate a full percent and knocked $150 off my mortgage payment.
Not perfect, but a nice low hassle way to get a taste of these rates while they last.
Chadstroma
Footballguy
Glad you got better.
Just FYI (not helpful for you now but for others it may be helpful info) FHA, USDA and VA streamline refinancing does not have to be with the current lender. There is no conventional streamline refinance. The min rules for all are set by the the government for the govies (FHA, VA and USDA) and by Fannie and Freddie for conventional. The only thing any lender can do is add MORE rules on to the minimum rules (called overlays). Wholesalers (the lenders brokers use) tend to have much less overlays than other lenders. The only area that lenders make their own rules are portfolio loans and non-QM which are very specifc loans.
Chadstroma
Footballguy
Not much.
If I was selling right now, I would either negotiate lower % than usual or go FSBO. The realtors I know are saying when you get a seller client, it is the easiest and fastest money they have ever made.
