Refinance questions

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cheekymonkey_IHB

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I am looking into refinancing because our mortgage is going to an adjustable rate in June. We have a Mortgage officer who did our first loan and have been pleased with him, however people are suggesting we go with the lenders directly. I trust our loan officer, but see from his proposal that total closing costs are $7,750. Does this sound right? He has listed and itemized the breakdown of these charges and it looks like $3,723 goes to him and the balance paid to others (underwriting fees, title charges, 15 days interest etc.). Would we save alot by going to the lender direct? Can they be trusted to divulge all the details of the contract...prepayment penalties etc? My husband and I are concerned that we might not fully understand and read every single line of the contract and miss something.
 
[quote author="cheekymonkey" date=1207806064]I am looking into refinancing because our mortgage is going to an adjustable rate in June. We have a Mortgage officer who did our first loan and have been pleased with him, however people are suggesting we go with the lenders directly. I trust our loan officer, but see from his proposal that total closing costs are $7,750. Does this sound right? He has listed and itemized the breakdown of these charges and it looks like $3,723 goes to him and the balance paid to others (underwriting fees, title charges, 15 days interest etc.). Would we save alot by going to the lender direct? Can they be trusted to divulge all the details of the contract...prepayment penalties etc? My husband and I are concerned that we might not fully understand and read every single line of the contract and miss something.</blockquote>


What kind of loan program and rate cheeky?
 
I have just recieved the good faith contract and he is looking at approx. 5.75%. Once we sign and move forward with the application (if we sign) they will start to shop around for best rate. I am hearing that the short term are no longer that competative and we should go for a 30 year fixed. The only reason I asked for 5 year was I thought that would offer the best interest rate. Our house is worth approx. $650k and our current mortgage is 201k so we have alot of equity and good credit.

Any suggestions?
 
[quote author="cheekymonkey" date=1207812350]I have just recieved the good faith contract and he is looking at approx. 5.75%. Once we sign and move forward with the application (if we sign) they will start to shop around for best rate. I am hearing that the short term are no longer that competative and we should go for a 30 year fixed. The only reason I asked for 5 year was I thought that would offer the best interest rate. Our house is worth approx. $650k and our current mortgage is 201k so we have alot of equity and good credit.

Any suggestions?</blockquote>


<a href="http://www.mtgcapital.com/ratesheet-fixed.html?state=ca&rs=fixed">Use this lender </a>to ballpark market rates and go from there. The numbers you see on this rate sheet include a lender fee of $950 plus the normal third-party costs you are going to get everything. For title, escrow, recording fees, and the like expect to pay $1500 or so.



If you plan on staying in the house for a while, the security of a 30-year is smart. The spread between 30-years and shorter term adjustables is pretty narrow right now. With refinancing on a conforming, a 30-year is a great call today IMO. If your credit is decent, you should be able to get one at 5.625-5.75% with less than a thousand in fees or points.



I just locked up a refi on $375K via Countrywide on a 3-year interest only at 5% with no points and no lender fees. They were very aggressive in terms of matching and beating competitor pricing.
 
<blockquote>Would we save alot by going to the lender direct?</blockquote>


No. A mortgage broker buys wholesale and sells to you retail, just as a direct lender sells to you retail.



The website posted by ipoplaya is on the money re some coupons (interest rates) but way off re other coupons. If you want to buy at "par," tell your prospective loan provider that you want to be quoted at par, then price everyone else at par, too, on the same day--actually, within the same hour.



Here's the cheapest lender on the planet--wholesale and retail.



https://providentfunding.com/
 
[quote author="SoCalGal" date=1207815597]<blockquote>Would we save alot by going to the lender direct?</blockquote>


No. A mortgage broker buys wholesale and sells to you retail, just as a direct lender sells to you retail.



The website posted by ipoplaya is on the money re some coupons (interest rates) but way off re other coupons. If you want to buy at "par," tell your prospective loan provider that you want to be quoted at par, then price everyone else at par, too, on the same day--actually, within the same hour.



Here's the cheapest lender on the planet--wholesale and retail.



https://providentfunding.com/</blockquote>


SCG - Provident is quoting a 5/1 conforming ARM at 6.5% with $995 fee. You think that is the cheapest on the planet? I checked 3-4 other lenders and they were all less than that... All their jumbo rates are over 8% too. That's worse than retail rates from the land banks I think. Did you post the right link?
 
Using cheekymonkey's situation as an example, here's the correct way to request a rate quote. The loan provider needs the following terms, property and borrower parameters to accurately quote a rate.



1. Purpose of loan

2. Occupancy

3. Type of property

4. Current principal balance

5. Estimated fair market value

6. Mid FICO score of primary wage-earner

7. Document type

8. Fully amortized or interest only

9. Type of refinance: rate-and-term or cash-out

10. Impound account waiver (Y/N)

11. Prepay penalty (Y/N)

12. Location of property

13. Period of lock

14. Par = no discount points to the lender (to lower the rate); no rebate from the lender (to pay closing costs)

15. APR is supposed to be based on this figure but never accurately is



"I'd like to give you all the risk factors necessary to quote a rate. Ready to write? I'd like to (1) refinance my (2) owner occupied (3) single family residence; (4) on which I owe $210,000. (5) I estimate the fair market value to be $650,000. (6) My mid FICO score is ___. (7) I'm a W-2 employee and I can fully document my income and assets. This will be a (8) fully amortizing (9) rate-and-term refinance and (10) I'll pay my property taxes and hazard insurance when due. (11) I don't want a prepay penalty. My house is located in (12) the state of ___, county of ___. I'd like you to quote a (13) 30 day lock (14) at par. Finally, (15) please express all other Section 800 fees as a dollar amount and tell me how much you wish to earn for originating my loan."



Here're some excellent calculators to help you compare/contrast.



http://www.mtgprofessor.com/calculatorsOriginalMenu.htm
 
Whew! ipoplaya, you're right. They don't do so well on a retail basis. Erase...erase...erase. Their wholesale rates are always good...if one can stand to deal with them, that is.
 
http://www.octfcu.org/re_refi_fix/30fixpurchase.asp



30-Year Fixed (Conforming)

(Maximum Loan: $417,000)

Rate Points APR Est. Pymt./$1,000

6.125 -1.000 6.12% $6.08

6.000 -0.500 6.04% $6.00

5.875 0.000 5.97% $5.92

5.750 0.500 5.89% $5.84

5.625 1.000 5.81% $5.76

5.500 1.500 5.72% $5.68

5.375 2.250 5.67% $5.60





I know someone that is refinancing there for a 15 year fixed (rate was 5%). Estimated closing costs on 100k balance was around 2,200.
 
I am already locked but I think that I got a pretty good rate - 6.5% for a jumbo loan zero points - but I did have to put 25% down. I am going to close in two weeks so I do not want to mess around.



However, I am told that mortgage rates have been going lower. Does anyone know what type of rate can i get now for a 25% down jumbo loan? I have 800 type fico scores.
 
[quote author="cheekymonkey" date=1207806064]I am looking into refinancing because our mortgage is going to an adjustable rate in June. We have a Mortgage officer who did our first loan and have been pleased with him, however people are suggesting we go with the lenders directly. I trust our loan officer, but see from his proposal that total closing costs are $7,750. Does this sound right? He has listed and itemized the breakdown of these charges and it looks like $3,723 goes to him and the balance paid to others (underwriting fees, title charges, 15 days interest etc.). Would we save alot by going to the lender direct? Can they be trusted to divulge all the details of the contract...prepayment penalties etc? My husband and I are concerned that we might not fully understand and read every single line of the contract and miss something.</blockquote>


The fees do seem rather high on this mortgage. Mortgage brokers are generally the most knowledgeable about the current loan programs available in the market. Unfortunately, mortgage brokers are not always incentivized to put you in the loan that is best for you. Their incentives are to put you in the loan that makes them the most money. If you do not trust your mortgage broker, don't use them. Shop around. When you think you have found the loan you want, call around to a few banks and see if they can make a better deal. You won't need to go through the full underwriting process to know if they can do better.



I am relieved to see you are going with a 30-year fixed. Don't get talked into an adjustable or an interest-only. If interest rates go up, which is likely, you will pay more later. Also, don't roll any other debt into the loan. Paying for a car over 30 years makes no sense, and paying for a vacation over that period even less so. I wouldn't worry too much about prepayment penalties. They are only a problem if you plan to refinance again. Since you are already locking in a very low rate, it is unlikely you will refinance again.
 
Don't be so quick to trust the Big Bank/Direct Lender to give you the best deal. Get quotes for rate and closing costs from a broker and a direct lender and compare them.



Aside from the Good Faith Estimate ask for the Truth in Lending Statement. This will show your long term total of all your payments.
 
I posted this on another thread, but I'll post it again.



Penfed.org has the best deal out there. 30 year fixed jumbo for 6% with no closing costs except title insurance and a couple small fees. I recently refinanced a jumbo 750K loan with them and paid $900 total. The only issue with them is that they are a little slow.
 
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