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Good info, and congrats.Our jumbo went through BofA (same rate too), and if I didn't have a local Private Banker / Relationship Banker working with me, this would have fell through. Sometimes I wonder if companies like BofA, Xerox, etc hire the stupidest people they can in order to frustrate customers and hose us out of $$.
Then, when we didn't close in December, I had to do it again in January. They could have simply asked me for copies of my statements!
I just did a 25k for $99. It is higher than my old one. I had prime minus .25 niow I have prime plus .5. It depends on the amount you want
you'll have to excuse my ignorance, but what are people doing with these heloc's anyway?i've never known anyone personally who did one, i always thought they were a sucker play or something
It's really not a sucker loan. Large loan sizes, usually great rates and limited fees. The great thing about them is its there when you need it and you only pay on what you draw.Most people use them to pay off debt, make a purchase, or just have a line of credit in play if/when they ever need. Back when property values in places like California were soaring and everyone was sitting on a pile of equity the majority of people I dealt with used that equity to take out $100-300K HElOC's which they used to buy second/investment homes.
No reason for you to refinance to do this. Just make payments like it is a 10 year and keep going. To re-fi you will incur costs that you almost certainly will never recover.
This will be hard to pull off in a way that make sense for you. 10 year rates are usually the same as 15 year or usually at best .125% better. As of yesterday I'd say if you hunted the internet you'd do well to find a 10 year 2.75% range, give or take .125%. Dropping half a point in rate on a small loan size is no good to you unless the cost is cheap.I'm not familiar with title fees in Minnesota so I don't know the cost to refinance but due to the smaller loan size it would make it difficult for lenders to offer you a limited or no cost loan. Sure you can roll the fees in and have limited to no out of pocket but the meager rate drop won't be worth sapping your equity.
I know people who open them and take just a small amount but like having the flexibility to have a large amount of cash already approved. I plan on taking one when we redo our kitchen. For the smaller projects we save up and pay cash, but the kitchen will probably cost 40-50k due to structural changes needed. I know I will get at least some of that back right away in the form of increased equity.
Yeah Meno captures my thoughts well here. This actually ties in nicely to the Pay down mortgage thread you have been in Dentist. I have a 8 year 1 month plan. In 8 years and one month I'm going ot have my house paid in full and I'll have a super majority of my daughters Florida Pre paid University plan funded. I don't have any other real debt, own both cars, and I do make standard sized contributions to our 401k's. This is a really nice story and all but as a household we do tend to run cash poor with maybe 3-4 months of expenses on hand. A $25-50K HELOC would give me an extra sense of security if something were to happen and we needed a cash infusion.Plus, and I hate to say this, If there was another market meltdown like 08 I'd try to go to the bank and write a big check ahead of it to build some cash.
good post.by the way i don't think 3-4 mo. is cash poor. it's not cash rich, it's lower than recommended... but cash poor are these peeps that can't write a $500 check without defaulting on their monthly bills because they don't have 2 weeks of an emergency fund.
All you need is to find a lender that lends in the state you are going. Yes. Typically these days they are going to want last two years of tax returns, last couple of paystubs, and last two months of bank/asset statements. More depending on the lender/situation. You should be able to find a rate in the 3's- UNLESS you end up going the route of a FHA or otherwise low down payment type of loan or even jumbo loan, etc- then you will very likely be pushed into the 4's.
here's what wells fargo wanted from me:2 years tax returns (every page)scanned drivers licenseseveral pay stubswritten employment verificationcredit checkappraisalbank statements for the previous few months (digital .pdf form) they want everything digital and in .pdfIQ scorecollege grade cardsbrowser historya few recommendation letters from professional associates, preferably other bankerspic of my junkeffing jerks
Depending on the state rates will vary but finding a rate below prime is a thing of the past. Prime or a bit above it is going to be the best rate you can find and honestly, I do not know of any lenders even doing prime right now. But generally you should be able to find a HELOC without any closing costs that requires you to keep the line open for 2 or 3 years. I would expect closing time to be around 2-4 weeks depending on the lender and situation. For a SFR, I think most lenders will still go to 90% CLTV.
I would need some more info to run the numbers but a 10 year is running something around 2.25 or so right now. You are getting a lower rate but then obviously you are taking 5 years of paying time off the new loan. Off the top of my head, I would say you might be pretty close to what you are paying now with the extra you put into principle... likely the new loan would be slightly higher in payment though you would save a pretty penny over the loan. As for doing the re-fi at no cost, you should be able to find a loan that will pay the closing through a slightly higher rate or roll it into the new loan for no out of pocket cost to you.
Meno hit on this pretty good. HELOC's may have got a bad rap with the housing boom and eventual financial crisis. A HELOC is a great financial tool and like any tool (financial or not) they can be misused and cause harm. They are a great way to access the equity in a property without going through the cost of a refinance. People will have a great need to do this in future years with rates being locked in on mortgages right now that we very likely will not see for many moons (or ever?) again. The HELOC can be set up for specific needs or as an emergency/just in case way of handeling finances. The ability to use/paydown/reuse like a credit card while getting a low rate and tax benefits make it a preferred way to borrow.
Assuming you are joking about the ones below bank statements, I dont see anything unreasonable.
I've used mine to purchase the rental properties. Not a single conventional mortgage. To get a 15yr mortgage on the properties I buy would cost about 2K (thats 10%-20% of the purchase price) and the rates would be 5-6%. I've saved about 20K in closing costs going this route.Pros:They should be low (or no) cost. All of mine were no cost at 5/3 bank.Rates are low. Mine range from 1.99 - 3.99Only use what you need. I basically keep all of our savings "in" them.Cons:They are variable rate. Be sure to have a plan to pay it off quickly should rates get out of hand.They charge a $50 fee per year.
when your credit score is over 800 and you already have an excellent track record of loan history with the company you're refinancing with all it should take is:updated appraisal
And anyone underwriting mortgage loans these days will ask for the exact same things as well. It will also not change now with the new rules from the CFPB for mortgages to be judged as a qualified mortgage and hold safe harbor status.
Maybe they do and maybe they don't but Dodd-Frank sure as heck don't. Now banks have little choice.
Story for a different post I guess (and it has been one as I recall) but my cash ebbs and flows depending on the time of year. In Feb after some company stock vests and I get my yearly bonus Cash isn't a problem. When I get to late December and we over do Christmas and book a trip the following year I'm lucky if I have enough for a Kit Kat bar. It causes me some stress but when i step back and look at the over all situation I know I'm doing fine. Plus I'm thinking I'm a good investment for a bank if I ever need a short term loan. But again, I 'd like a HELOC so I wouldn't need to go down that road.
)We're lowering our monthly payment over 1k, staying with the same bank....and it's hassle after hassle, it's completely ridiculous.
it's ####### insulting for people that have a great credit scoreI should be used to it by now but I can't believe how difficult the process is to refi.This is our 3rd time refinancing....we're moving from a 15 year at 3.75 to a 30 year at 3.75 to get some cash flexibility(kids more more expensive than i thought
not necssarily norefi.commore along the lines of don't treat me like i'm stealing your money and that you need excessive documentation when i'm borrowing less than i make in 8 mo.There should just be 2 standards of refi'ing. I am all for putting the person through hell if they've ever missed a payment (just one), have a credit score under 750, are borrowing more than 2-3X what they gross in a year, or have other ambiguous financial problems.and then there should be a hassle free, turnkey plan for people who have never missed a payment, have easy to read finances, and are borrowing a highly affordable amount.But.. i get it.. there is really no benefit for the bank to do those refi's... sure they make a little money doing it... but it's like you're signing up to get less money long term... why would you want to make that "easy".
That used to be where non-conforming was supposed to fit in the mix. Then those got squishy also.
Nice and only costing you 2K.30 yr rates backed up a bit last week but 15 yr rates are still holding mid 2% range.
I just completed a HARP re-fi. I got down from 6.125% (closed in May 2008) to 3.6000% on a 30 year fixed re-fi. It took 5 months. My credit score is high 700's, and I'm borrowing 30K more than I make gross per year. I was dumbfounded how my lender handled it. Credit check after credit check, delay after delay, more and more requests for additional documentation. I had my prior mortgage with the same lender, never missed a payment or anything. They claimed they fired the loan agent who handled my file originally. Who will ever know, but it was really frustrating for me personally. I just hope that's not typical for the rest of you guys.it's ####### insulting for people that have a great credit scoreI should be used to it by now but I can't believe how difficult the process is to refi.This is our 3rd time refinancing....we're moving from a 15 year at 3.75 to a 30 year at 3.75 to get some cash flexibility(kids more more expensive than i thought
I dont know about that man. Couple of grand each, more for a jumbo.... a small bank branch that can process 1-2 a day 500ish a year. ($3K * 500) = $1.5M. All you need is one mortgage pro, a bank pro and a admin type, thats about $300K worth of Salaries. Thats not including the kickbacks they get for hiring appraisers and PMI or any of the other odds and ends that go into the process. Plus the bank gets to show the fees in year one, unlike interest income (assuming they hold the note) where they take in profits thought the life of the note.Seems like there is more money in the fees then the interest, esp in today's IR climate.
Streamline FHA here. From (3 years into) a 5/1 4.125 to a 5/1 2.5% (no closing costs). Took over 90 days to close. Stupid stupid ####, like needing me to be on the phone for a conference call to my electric and gas utility to give authorization to verify my monthly payment. Ask me for a ####### statement, dumb####s.If this sounds bad, I can even top it... I needed to do this both in December AND again in January, because some paperwork boondoggle didn't allow us to close in December.ETA - Oh, and in the final days, the license they were using to verify my identity for 90+ days was no longer valid, as it expired on January 17th. I had to send them a copy of the renewal. Not that this was difficult, it's just stupendously ######ed.I just completed a HARP re-fi. I got down from 6.125% (closed in May 2008) to 3.6000% on a 30 year fixed re-fi. It took 5 months. My credit score is high 700's, and I'm borrowing 30K more than I make gross per year. I was dumbfounded how my lender handled it. Credit check after credit check, delay after delay, more and more requests for additional documentation. I had my prior mortgage with the same lender, never missed a payment or anything. They claimed they fired the loan agent who handled my file originally. Who will ever know, but it was really frustrating for me personally. I just hope that's not typical for the rest of you guys.it's ####### insulting for people that have a great credit scoreI should be used to it by now but I can't believe how difficult the process is to refi.This is our 3rd time refinancing....we're moving from a 15 year at 3.75 to a 30 year at 3.75 to get some cash flexibility(kids more more expensive than i thought
Yep, we shared an experience here. Had a conference call with PayPal. I order my contact lenses third party, and my employer evens me up if I get their brand, great benefit. So I use "BillMeLater," since the check arrives 6-8 weeks after you order the lenses. Well, in the eyes of the lender, this constituted a new line of credit. They have me on the "conference call," and as it turns out, they had already confirmed during my initial closing in 2008 that it was the same line of credit, and that $150 was put on it recently as an additional liability. I wish I was wittier on the spot, so I could've asked them when we hung up if we needed to call Starbucks next for the coffee I bought on the way to work in the morning too on my AMEX. I just acted like my annoyed boring self and practically hung up on them. Loan agents asking each other questions with me on the phone, cluster-you know what.Streamline FHA here. From (3 years into) a 5/1 4.125 to a 5/1 2.5% (no closing costs). Took over 90 days to close. Stupid stupid ####, like needing me to be on the phone for a conference call to my electric and gas utility to give authorization to verify my monthly payment. Ask me for a ####### statement, dumb####s.If this sounds bad, I can even top it... I needed to do this both in December AND again in January, because some paperwork boondoggle didn't allow us to close in December.I just completed a HARP re-fi. I got down from 6.125% (closed in May 2008) to 3.6000% on a 30 year fixed re-fi. It took 5 months. My credit score is high 700's, and I'm borrowing 30K more than I make gross per year. I was dumbfounded how my lender handled it. Credit check after credit check, delay after delay, more and more requests for additional documentation. I had my prior mortgage with the same lender, never missed a payment or anything. They claimed they fired the loan agent who handled my file originally. Who will ever know, but it was really frustrating for me personally. I just hope that's not typical for the rest of you guys.it's ####### insulting for people that have a great credit scoreI should be used to it by now but I can't believe how difficult the process is to refi.
This is our 3rd time refinancing....we're moving from a 15 year at 3.75 to a 30 year at 3.75 to get some cash flexibility(kids more more expensive than i thought
We're lowering our monthly payment over 1k, staying with the same bank....and it's hassle after hassle, it's completely ridiculous.
ETA - Oh, and in the final days, the license they were using to verify my identity for 90+ days was no longer valid, as it expired on January 17th. I had to send them a copy of the renewal. Not that this was difficult, it's just stupendously ######ed.
Nope...not typical. Took 7-8 months for me.'mquinnjr said:I just completed a HARP re-fi. I got down from 6.125% (closed in May 2008) to 3.6000% on a 30 year fixed re-fi. It took 5 months. My credit score is high 700's, and I'm borrowing 30K more than I make gross per year. I was dumbfounded how my lender handled it. Credit check after credit check, delay after delay, more and more requests for additional documentation. I had my prior mortgage with the same lender, never missed a payment or anything. They claimed they fired the loan agent who handled my file originally. Who will ever know, but it was really frustrating for me personally. I just hope that's not typical for the rest of you guys.'Dentist said:it's ####### insulting for people that have a great credit score'lumpy19 said:I should be used to it by now but I can't believe how difficult the process is to refi.This is our 3rd time refinancing....we're moving from a 15 year at 3.75 to a 30 year at 3.75 to get some cash flexibility(kids more more expensive than i thought
It pretty much will never get better now. Thank Dodd-Frank and your Congressman.it's ####### insulting for people that have a great credit scoreI should be used to it by now but I can't believe how difficult the process is to refi.This is our 3rd time refinancing....we're moving from a 15 year at 3.75 to a 30 year at 3.75 to get some cash flexibility(kids more more expensive than i thought
It has nothing to do with how much money they are making or not making. It has to do with two things: 1) The pendulum swung to the other other extreme after years of lax underwriting standards and heavy losses through the Great Recession. 2) Government regulations establishing standards for what is defined as a 'qualified mortgage' and the extra risk involved for doing mortgage loans that do not fall into that category. Because of #2, the pendulum is very unlikely to swing back into a middle ground or happy medium.
Don't think that happens anymore.
I don't think your going to get by with 0 appraisal but if you got your first though a local bank they should be able to pull something together for you. And as far as a major clean up goes your appraiser shouldn't be worried about stuff like that, more so the structural stuff.
Math: your friend
sure, math would help. but the answer I think lies more in how rates will look in a year or 2. Also have to figure out prospects for the home value in 2-3 years too. I am guessing the simple math answer would be the 4.125% with no PMI?
Are you thinking of refinancing in a year or two?At the minimum payment, how far are you from hitting 78% LTV? If it's a 30 year loan, plan on paying PMI for 5 years, even if you hit 78% first.Look at your 3.5% payment, plus ~$200 PMI until you hit 78% compared to 4.125% for the life of each loan. Which has a lower cost? Which is better in the short run? At what point do they break even?In a rough calculation, I estimated your loan value at $200,000. I show the 4.125 to be almost $8k ahead after 5 years. Assuming you can finish with PMI at year 5, 3.5 doesn't break even until a little better than 15 years. How long do you plan to be in the house? No one can predict rates, but do you think they can be as low as they are now in the future? After 30 years, 3.5 is ahead by over $13,000.(note that $200 is your PMI in year 1, it will go down a bit each year as your loan goes down - I didn't factor this into the above calcuations)
Congrats on the free money even with the requisite BS. You earned it.
