Refinance question: Should I deal directly with bank or my broker? (loan, escrow)

[North_Raleigh_Guy]

I bought my first house back in 2006. Worked with a great local mortgage broker. Did a 10% down 80/10 thirty year fixed at 6.5% on the 80%.

I am starting to think about a refi in light of these low rates I am hearing about. I know there are many factors that will play into exactly what rate I will qualify for, but I am more curious about who I should deal with. Would it work in my favor to deal directly with the bank holding my mortgage (Chase) or could I fare better dealing with my broker again? I don't know what costs are involved in a refi and am looking for the best option.

Any tips would be appreciated.

Thanks!

[chet everett]

I recommend contacting a few of both, getting a feel for how responsive they both in terms of rates and the actual 'work' of doing your loan.

With all the cuts I would hate to stuck with some lender that has too little staff to actual move in a timely fashion...

[renriq02]

Deal with both..and shop around just in case.

You may find a better deal somewhere else.

BTW Refinance costs are about the same as purchase costs.
If you spent 3-4% to buy the house then you'll be spending the same to refinance.

[helppls]

Originally Posted by renriq02

If you spent 3-4% to buy the house then you'll be spending the same to refinance.

Is this true? We're buying a house and have been told to expect 3.5-4% of loan amount for closing costs. I just asked my broker if we were to refinance in 6 months (assuming there is a big rate change,) he quoted me a cost that is closer to 1% of the loan amount...

[scuba steve]

I have to ask... on 6.5% is it even worthwhile to refinance? I think for the cost involved would eat up any savings here.

[renriq02]

Depends on the size of the loan, and the city/state you live, and the escrows.

200k loan amount
Lender fees 1-2% = 2000-4000
Attorney fees 1200
Escrows 1200 (property taxes/hazard insurance 6months)

2400 in 3rd party fees
2000-4000 for lender fees
That's 4400-6400 in fees which would be 2-3% percent

That is an ideal situation. Some states charge taxes which can be another 1% on top of the loan...and depending on how much escrows are pulled.

Originally Posted by helppls

Is this true? We're buying a house and have been told to expect 3.5-4% of loan amount for closing costs. I just asked my broker if we were to refinance in 6 months (assuming there is a big rate change,) he quoted me a cost that is closer to 1% of the loan amount...

[renriq02]

Depends on the rates/costs you get.
It will also depend on your loan amount.

Originally Posted by scuba steve

I have to ask... on 6.5% is it even worthwhile to refinance? I think for the cost involved would eat up any savings here.

[chet everett]

I don't think I am just special, or my lenders too old fashioned but I can't think of the last time I had to do lender escrow. I do tend to have a lot of equity in the place, and I suspect that helps.

I think I would balk at anything more than about 1% of the loan amount, but I have a lot of years on me....

[renriq02]

There are a few ways a lender can make money

1. Charge in the front
2. Charge in the back
3. both

Charge in the front are fees that paid at closing aka closing costs
Charge in the back are when the lender receives the rate for 5%, and sell it to a borrower for 5.125% or higher.

They can do both.

Originally Posted by chet everett

I don't think I am just special, or my lenders too old fashioned but I can't think of the last time I had to do lender escrow. I do tend to have a lot of equity in the place, and I suspect that helps.

I think I would balk at anything more than about 1% of the loan amount, but I have a lot of years on me....

[helppls]

t

Originally Posted by renriq02

Depends on the size of the loan, and the city/state you live, and the escrows.

200k loan amount
Lender fees 1-2% = 2000-4000
Attorney fees 1200
Escrows 1200 (property taxes/hazard insurance 6months)

2400 in 3rd party fees
2000-4000 for lender fees
That's 4400-6400 in fees which would be 2-3% percent

That is an ideal situation. Some states charge taxes which can be another 1% on top of the loan...and depending on how much escrows are pulled.

Hmmm, this is why I can't imagine how we can go from 3.5-4% closing cost now to 1% refinancing 6 months from now... This is for NYC, 550k loan amount, I'm wrestling with paying 1 point for 4.625% or taking 5% with 0 points. The breakeven calculators seems to say we will breakeven in 3 years time, so if we are staying longer than 3 yrs we should pay for the point, right? .. I just hate taking a rate with points right now, especially if the rates might fall within the next 30days...

One thought is that we take the bestest rate and never ever think about refinancing...

The other is that we definitely leave the re-financing option open and use that 1pt money towards refinancing but I'm really skeptical of being able to refinance with 1pt costs within 6 months. I see people on here saying you shouldn't pay more than $600 for refinancing... how is that possible???