Mortgage Refinancing

We refinanced to go from a 30 yr to 15 yr loan so we could pay it off sooner. What I regret is that we used a broker. They basically do nothing for you and it costs you a % point. Go directly to the mortgage company.

i have been a mortgage broker for 20 years. there were a lot of shady ones back in the day but there are shady people in all businesses. the nice thing about the mortgage industry is that you make the decision whether or not you want to close AND you legally have 3 days to make sure that you made the right decision or you just cancel, so there really is no excuse to take out a *bad* mortgage. NEVER take out a loan, mortgage, car loan, etc that you do not feel comfortable with. So if 15 yr payments are a bit of a stretch then don't do it. Dont take out interest only loans, variable loans, arm loans, don't buy down points, etc. And remember if it sounds to good to be tru then it usually is to good to be true. AND you can shop around to as many places as you want, but don't let them pull your credit report. You should order your own credit report for free & give them the info & ask for some basic numbers based on the info you gave them, so be very honest.

It doesn't sound accurate that your bank will do a 15 yr & not a 30 year, I could see them not wanting to do a 15 yr & encourage you to do a 30 year, it has everything to do with your debt to ratio numbers. so something just doesn't sound right.

Mortgage Brokers are easier to work with because they have access to tons of different lenders whereas a bank is stuck with just their own bank.

Personally I don't think it would be wise to refi if you only need 5-10,000. The costs are going to be high so if you could save the money, that would be in your best interest. And anyone that says they don't have any closing costs is absolutely wrong, they are there but the interest rate is higher to make up for *no closing costs*, the lender, title company, appraiser, have to make money somehow. Hope this helps & feel free to PM me with any questions.

We've refinanced about 4 times and the last time our interest rate was at an all time low.

We NEVER, EVER add to the mortgage, pay closing costs, etc. We do a no cost closing where NO cost is involved and NOTHING is added to the mortgage, we actually paid down the mortgage. We don't do escrow because we are smart enough to know when taxes and insurance is due and we prefer to make interest on the $$ vs the mortgage company.

We went through a mortgage company and have gone through the same one since we built this house in 2000. No issues with the mortgage company for us but we are right on top of them checking everything and making sure we do not get hit with hidden fees.

We are numbers people so we crunch those numbers before we sign anything.

My own remortgage was done under financial duress, so we took ridiculous terms that we thought we'd be able to re-finance out of within a year and it didn't work out well. So consider carefully WHY you want to remortgage.

My parents and many friends have re-fied many times all for good reasons and under good circumstances. Can you get a lower interest rate where the amount that you save will outweigh the costs of the re-fi (closing costs, points) very quickly? That's a good reason. If you take out cash for home improvements, are they things that you NEED to do to maintain your home (a new roof, windows/siding, upgrading your heating or cooling etc.)? If you need to do them, great. If they're vanity things like granite countertops or a spa-style bathroom, make sure you're not throwing your money away on things that you don't really need and won't improve the value of your home.

Regarding debt consolidation, most people who pull out cash to pay off credit cards end up having just as much credit card debt within 5 years. So in many cases, people have LESS equity and MORE debt by doing this. So debt consolidations are great in theory but in practice, most of us don't have the discipline or life circumstances to manage finances in the future differently from how we did in the past. And using your house as collateral for consumer debt is never a great idea.

If you aren't 100% sure you can afford a 15 year note, then DO NOT do this. Figure out how many years you have on your mortgage and see if you can find a company who will give you that many years - you don't want to go for 30 if you only have 23 years left because you've just put yourself into debt for 7 years longer, and no one wants to be looking at a mortgage payment when they are close to retirement.

Be wary of brokers and try to work directly with a small local bank who will not sell your mortgage to someone else.

Just to let you know that this is a possibility-- we tried to refinance our house in November and couldn't get the deal to go through because our house appraised for much lower than we expected and was therefore worth less than the amount we wanted to finance. (We bought it 5 yrs ago. We had new windows put in 2 yrs ago and at that time, it appraised for $25k more than we bought it for. This November it appraised for $25 LESS than we bought it for). So we spent $400 on an appraisal and the deal didn't go through. :-(

I also agree with the folks who said not to go with a 15yr if you're not comfortable with it. You have no idea what life will throw at you in the future, and you don't want to be stuck with a house payment that you can't afford comfortably. Good luck with everything!

We refinanced our house less than a year into it. We did it because the rates dropped. We didn't take any money out and still pay what our old mortgage was. Which is an additional $200 a month. So that helps. BUT...we didn't have to make payments for two months, which killed us on our taxes the next year. We owed for the first time EVER. So I would really think about why you are doing it. And I would NEVER take out any extra money on my home or pay off any bills with it. Then you're paying for 30 years instead of 5 or whatever it was before.

We initally had a fixed loan and refinaned to get cash out. Our second loan was a variable loan (do not get one of those). We were told that we needed to refinance within two years or our house note would increase. We didn't think that would be a problem. When we tried to refinance we were denied because our car loan from GMAC inaccurately reported that we did not make our payment for that month. Very wrong because our car payment was due on the 12 of the month. By the 2nd of the month they had reported it as being late. Completely and obviously false. Based on that our house loan was denied. They tried to DOUBLE our house note. If we didn't get another loan we were just going to let the bank have it if we couldn't sell it. We got the car thing straightened out then it happened again! I was livid. We had to pay 250.00 for the mortgage company to investigate and get that cleared up. Very annoying.

If you do refinance get a fixed loan. If you can, make sure all of your payments with other creditors are reported accurately. Stay away from GMAC!!!!

We eventually were able to get everything settled and refinance for a fixed loan. I'm never refinaning my house again. For us it was a pain in the butt.

In the past 16 years, I've refinanced. I've taken out a home equity loan. Then I combined the 2 (original mortgage and home equity) and took out an additional $25,000.

Absolutely no regrets. All were sound financial decisions which were best for us at the time.

The last transaction (about 6 years ago) we used a mortgage broker. I liked using a broker because there are more options available. (we could choose, 15yr, 20 yr, 30 yr, - did we want to pay points or not). I actually had them draw up 6 contracts so I could decide which option was best for me. It did not cost me any more to use a broker than going directly to a bank. A mortage broker will get you a loan with a financial instituation (usually it's a lending company , not a bank), but over 50% of the time, within a few months, your mortgage will be sold. So you never know who your mortgage company will be. IMO, it doesn't really matter. The same is true if you go with a bank, your mortgage also may be sold.

I like to know what you've heard bad about mortgage companies. The truth is many years ago there were many bad things happening in the mortgage industry. People were taking out loans and mortgages that in all reality they would never be able to pay back, even if we didn't have the recession. People just made really bad financial decisions and the banks, mortgage lenders, and mortgage brokers all encouraged them to do. Lesson:
Read and fully understand that you are signing.

In our case of the most recently refinance, it was a difficult process because the mortgage broker was not listening to what I wanted and needed and was trying to treat me like just another customer that he could just push through. When he came back with numbers of what my payments would be, I kept saying this doesn't make sense, he thought I would like to take out more $$ than I told him and he was also giving me a 30 yr when I wanted a 15yr. Since 99% of customers were refinancing to lower their payments he thought that's what I wanted. I wanted to increase my payments. All 6 (3 for hubby,3 for me) ranged between 750 and 800, so I knew we could qualify with no problems. When he wanted an explanation as to why a credit card payment was late 2 years ago, I told him none of your #$%* business. I had that option.

Sorry to be so long winded. The point is to know what you want and need and to look at all your options. Some things to consider... Are you able to make your current mortgage payment with out any problems? Would paying an additional $50 a month be difficult? What is the current value of your home, what % of equity do you have in your home? If you take out a 30yr, how old will you be when it's paid off? Look at the whole picture.

Consolidation of debt... Has it's advantages and disadvantages. Alot depends on your personal situation. Advantage, if your paying 15% or more in interest on a credit card and refinance into a mortgage at 5%, it could be a big savings, especially since you can claim the interest as a tax deductions (rumors are this will be phasing out over time). On the other side, you may be paying it off over a longer period of time therefore after 30 years, when you add it all up, you actually paid a lot more. Crunch the numbers and see what works best for you. Also keep in mind, what can you afford.

In your case, if you could aford it, it would be really be a good idea to get your basement taken care of. I would definetly look into refinancing. Start with finding out what your current interest rate is, the balance of your loan, your currently monthly payment and what it consists of (principal & interest, taxes, insurance, and possible PMI), and the approximate current value of your home (just check out the current asking prices for housing selling in your area).

Good luck.

We just refinanced our house for the 2nd time since we bought our house 5 years ago. We refi'd through our bank (DH works there and that is who we originally financed our house through). We didn't get any cash out but could have since the house appraised for more than we were wanting. Just expect that they will have to do an appraisal both inside and out before your approved. We ended up going with a 20 yr instead of a 30 yr and it only increased our payment by about $50/mo. Good Luck!!!!

We did refinanced just like TF. We don't have any credit card debt, and chose to refinance because of lower interest rates and wanting to pay off our house earlier. We didn't pay any up-front costs, our payment went down (but we still pay more to pay off home quickly), and we shaved off a couple of years on our loan. We're very happy that we did it.

I have refi'd 2 times - both done with/thru the current mortgage holder at the time (was WaMu - I had no problems w/them). I did it because it dropped my interest by an average of 2 points each time - and I went from a 30-yr to a 15-yr note (and got that annoying PMI OFF the darn thing that the PNC didn't take off when they should have). Chase bought my WaMu account - hopefully they'll be good, too, until it's all paid off!

Can you pay extra principal directly on your mortgage? (can w/this account - could when WaMu had it - and always do a little extra!) If you can do this, it might be just as close as a refi for you as the extra principal payment will come straight off the mortgage balance.

we refinanced our home in 2001...we took the money out and bought my van for cash and other home improvements...we paid off our debt (only to get it up again and then said ENOUGH!!)

We paid off the 2nd in 5 years....by refinancing the house again and combining them back together....

My only regret? that now we still owe more than we bought the house for. We have been VERY fortunate that our housing market hasn't crashed real bad...we have our share...but we bought our home for $176K and now we owe $280K...however, the same houses in our neighborhood have sold for $555K...so I'm still good.

EDIT:

We are a cash only family now. Have been since 2006.
We do NOT have a IO nor would I EVER recommend getting an I/O loan.
I do NOT recommend a ARM - as when it comes time to get the balloon payment - you might not have it...and then you are screwed...

I would go through a credit union or a bank and not use a broker for it. I would avoid Bank Of America like the plague.

If you are talking about a mortgage broker a good number of them are awful. Actually I have nothing good to say about the big ones. I went through homested after my divorce because the asshat trashed our credit just to get back at me. They sold it to countrywide and then B of A. The worst part was all the "fees" they took.

See thanks to good old Clinton and HOPEA they can take up to 7% of the mortgage balance in fees. This includes fees so if you add the fees to the balance I refinanced take 7% you get my fees. When you are talking about a 143,000 mortgage it drove it up to 163,000 when they also added in points. I consulted an attorney, all legal. They didn't tell me, I read it on the closing papers. The pushed off the close to one day before my court date knowing I need cash out to pay my attorney. Lovely bunch!

I do know private mortgage brokers that are very legit!