U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 10-09-2013, 08:36 AM
 
472 posts, read 397,053 times
Reputation: 186

Advertisements

One of the things I want to get a clarification on is the following:

Loan wo/closing costs as I understand is where borrower doesn't pay any of the closing costs because those are rolled into the loan (thereby balloning your 'owed' amount)

Loan wi/closing costs + credits applied towards closing. In this you are given a credit towards closing which if the credit is as much as the closing means borrower 'technically' isn't paying anything towards closing & loan amount stays the same as the amount you borrowed.

Is my understanding correct?
Reply With Quote Quick reply to this message

 
Old 10-09-2013, 08:52 AM
 
Location: Mount Laurel
4,146 posts, read 8,382,146 times
Reputation: 3409
Quote:
Originally Posted by ThisDamnLife View Post
One of the things I want to get a clarification on is the following:

Loan wo/closing costs as I understand is where borrower doesn't pay any of the closing costs because those are rolled into the loan (thereby balloning your 'owed' amount)

Loan wi/closing costs + credits applied towards closing. In this you are given a credit towards closing which if the credit is as much as the closing means borrower 'technically' isn't paying anything towards closing & loan amount stays the same as the amount you borrowed.

Is my understanding correct?
It's very simple when you are financing or refinancing.

1. What is the loan amount? Amount, Interests rate and terms is what's used to calculate monthly payment.
2. What does it cost to get the loan? Application fee, title insurance, origination fee, appraisal.. other fees
3. Credit or Fees associated with getting the rate.

Put #2 and #3 together and you have the cost of getting the loan. It may require money to be brought to the table at closing the loan. Some people project what the cost is and roll it into the loan amount (increasing #1 if they can).


Just a note, You throw escrow into the mix and it's a whole different issue. Why? Cause bank may want to set up new escrow with 3-6 months reserved. That mean you may have some money in the escrow with the current lender but you won't get those back until you close the current loan. This mean you may need out of pocket money on the new loan.


Loan with or without closing cost is just a summary. You need to look at the breakdown of the loan.

In order to obain a new loan, work needs need to be done and various parties involved in the process and they need to get paid. It's just a matter of how it's being paid. Your county recording office charges for the deed filing so that is paid by you no matter what. That amount may come from you or credit from the lender for taking a higher interests rate. The bottom line is it's your money..
Reply With Quote Quick reply to this message
 
Old 10-09-2013, 09:05 AM
 
Location: Mount Laurel
4,146 posts, read 8,382,146 times
Reputation: 3409
I will use your number as an example based on what the rate is at the bank I use.


Your current rate is 4.625% @30 years.
Loan amount $417K


PENFED current rate is 4.125% 0 Points with 1% origination fee.
If I want to avoid the 1% origination fee, I take an increase of .25% which equates to 4.375%
The assumptions is that you have 740+ FICO and 80% LTV
There are no other credits.


At first glance, you may say.. hey.. I can drop my rate to 4.375% with no cost cause I got rid of the 1% origination fee... but wait.. not so fast.

You need to find out what the others cost are in terms of appraisal, application, title, filing.. etc..

That amount added up is the cost that you will be responsible for.


I am not sure how you are currently shopping for rate but if you are simply looking at what is advertised.. You may not be getting the full picture. You need a GFE.
Reply With Quote Quick reply to this message
 
Old 10-09-2013, 03:25 PM
 
1,263 posts, read 2,645,153 times
Reputation: 1872
Is it an approval problem that you just bought the house a few days ago? I thought most refi lenders wouldn't refinance a purchase mortgage unless it was a few months old. Is that not the case anymore?

I'm pretty sure my old bank wouldn't start a refinance until after the first 2 regularly scheduled payments on the purchase mortgage had been made. It was a small, quirky bank however.
Reply With Quote Quick reply to this message
 
Old 10-09-2013, 07:14 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129
Quote:
Originally Posted by LOL_Whut View Post
Is it an approval problem that you just bought the house a few days ago? I thought most refi lenders wouldn't refinance a purchase mortgage unless it was a few months old. Is that not the case anymore?

I'm pretty sure my old bank wouldn't start a refinance until after the first 2 regularly scheduled payments on the purchase mortgage had been made. It was a small, quirky bank however.
Some may still lend on it. I saw one that was designed to do it shortly afterward but you had to show where the money came from incase the lender didn't record it, like if you used some kind of hard money lender.
Reply With Quote Quick reply to this message
 
Old 10-22-2013, 02:25 PM
 
472 posts, read 397,053 times
Reputation: 186
So, I'm in the process of choosing the refi rate & lender. I had a question regarding the 'payoff amount'.

I've paid up all interest till end of Nov & my first mortgage payment is due Dec 1st. So, if the new lender asks for a payoff amount before Dec 1st what would be the amount. My understanding is it should be just the amount I borrowed (417k). Correct my understanding if required and also chime in with refi experiences.

Thanks.
Reply With Quote Quick reply to this message
 
Old 10-22-2013, 03:17 PM
 
Location: Mount Laurel
4,146 posts, read 8,382,146 times
Reputation: 3409
Quote:
Originally Posted by ThisDamnLife View Post
So, I'm in the process of choosing the refi rate & lender. I had a question regarding the 'payoff amount'.

I've paid up all interest till end of Nov & my first mortgage payment is due Dec 1st. So, if the new lender asks for a payoff amount before Dec 1st what would be the amount. My understanding is it should be just the amount I borrowed (417k). Correct my understanding if required and also chime in with refi experiences.

Thanks.
Call your current lender and they will tell you what the pay off amount is. If you can access your account online, you can do it there too.

Your statement is "I've paid up all interest till end of Nov & my first mortgage payment is due Dec 1st" is confusing so it's bets to contact your lender to get the exact number.
Reply With Quote Quick reply to this message
 
Old 10-22-2013, 03:36 PM
 
Location: Southern California
4,350 posts, read 4,933,884 times
Reputation: 2129
Quote:
Originally Posted by ThisDamnLife View Post
The 4.25% was wo/closing costs
Your Dec1 payment is interest for Nov. Your payoff is roughly 417k + 1 mortgage payment. In California you can bring that paying into escrow and keep the loan at 417k, I hope that was clear.
Reply With Quote Quick reply to this message
 
Old 10-22-2013, 03:53 PM
 
1,263 posts, read 2,645,153 times
Reputation: 1872
Quote:
Originally Posted by ThisDamnLife View Post
So, I'm in the process of choosing the refi rate & lender. I had a question regarding the 'payoff amount'.

I've paid up all interest till end of Nov & my first mortgage payment is due Dec 1st. So, if the new lender asks for a payoff amount before Dec 1st what would be the amount. My understanding is it should be just the amount I borrowed (417k). Correct my understanding if required and also chime in with refi experiences.

Thanks.
Mortgage payoff statements always include a "per diem". Mortgage interest is charged every day, not only with payment dates.

Your payoff statement will say something like: "$417,056.34 on 12/06/2013 plus/minus $51.92 per diem. This payoff quote is good through 12/11/2013" or something*.

Your new lender will calculate the payoff. Do not make the Dec 1st payment without telling them first, but do make it before you incur a late fee.

* I'm making up the figures and dates as an example.

Last edited by LOL_Whut; 10-22-2013 at 03:56 PM.. Reason: replaced "payments" with "payoff statements" Oops!
Reply With Quote Quick reply to this message
 
Old 10-22-2013, 05:45 PM
 
16,493 posts, read 17,525,712 times
Reputation: 23556
Unless there is some huge advantage to refi'ing and I'm talking some big monthly payment drop you're better off making a $2600 payment to your principal and paying a extra $40 a month on your payment hell make one extra payment a year towards principal. You'll decimate a lot of the banks profit. Especially if you start doing it at the beginning of the loan.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top