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I know, but being just SHY of 20 percent equity means I'd have to pay PMI. which I sure a heck am not going to do.
1) I didn't pay it when I bought the house, so I'm sure as heck not going to do it now...2) it would eat into the benefit and purpose of the refi, 3) I've heard stories about getting the bank to DROP the PMI once you do get to 20 percent. That it doesn't just drop off automatically. Those stories may be anecdotal, but still, the less back and forth with loan folks who may not be able to get their act together the better)
I'm close...on the 20 percent equity, but likely still shy. I'm not going to pay for an appraisal only for it to come out at 18 percent equity.
I'm going to to watch rates and home values....if I see HVs have gone up enough to let me squeeze out that extra equity, I might refi and have closing costs rolled in.
Rates likely aren't going anywhere soon, so I might be able to get the HV up and still get a rate well under 4 percent. A few more mortgage payments even if value doesn't rise much will up my equity.
Yes, I know...I want it all. At least I'm honest about that
The last appraisal guy who came a few years ago turned me off from them.
The house was pristine and everything,
I had prepared a page with a list of improvements, and upgrades, amounts, measurements. (remodeled kitchen granite tops, brazilian cherry hardwood floors, etc)
I walked with him pointing them out. He wasn't in the least interested. I wanted to show him an improvement in the garage (a workbench and sink area) All he asked was 'can you still get a car in it?" "I answered, yes" He said I don't need to see it.
I don't know if it was just coincidence or what...my appraisal came out at exactly what Zillow had. Many people say you can't trust Zillow, don't go by that.
But for all I know this appraisal guy who wasn't interested in any of my improvements ... could have just gone to Zillow and used that number.
So while people say don't go by Zillow it can be low....mighty funny that's what the appraiser came up with.
And Zillow has me at about 18 percent.
Personally, I'm jealous that you got a no cost refi once.
I'm not upside down, and can afford my mortgage, which is conventional, so I don't qualify for a no cost refi. I have contacted several lenders to make sure, and I can refi, but it will be at full cost. I ran the numbers and decided it wasn't worth it, since in addition to the refi costs, I also would have to bring money to the table to stay at the required 20% equity. Last time I ran the numbers, I was going to have to bring about $15k to the table, in total. I don't want to deplete my cash funds that much. If I could get a no cost refi, and take even a percentage point off, I'd be thrilled.
For conventional loans (IIRC), the banks must take off PMI once you hit 78% LTV (basically 22% equity) based on the original amortization schedule (won't come off automatically if you make extra payments). However, you can call in at 80% LTV (I think based on appraisal) and get them to remove it then and there.
However, in your case, is there any way you can find a way to pay down the remaining 1 or 2% to avoid PMI? Temporary family loan that could quickly be repaid from the interest savings? Something else? If my math is correct, it's going to take you a little over 1.5 years at 5% to pay off 2% LTV at your normal monthly amount (and assuming house prices remain the same). That's a long time to chance interest rates staying the same.
Even is you refinanced again now and paid the refi costs, you'll still come out WAY ahead in the long run by doing so. Knocking your current rate of 5.025% down to even 3.50% would be WELL worth it, and you should be able to roll the costs right into the new loan if you can't pay them out of pocket - that's a no-brainer. I've refinanced twice in the last three years and went from 7.125% to 5.375% to 3.99%, and I'm very glad I did. My mortgage will be now be paid off 15 years earlier than it would have under the original loan, at an interest savings of over $80K, which makes the few thousand I paid for the two refi's look like beer money.. I strongly suggest you look into doing this. Good luck with it!
Zillow has my HV at -- 241,000
I owe -- 199.000
Rate -- 5.125
Mortgage, PITI -- 1475.00
I PAY -- 1600.00 every month...for an extra 112.00 to principle
(I do that so if one year I don't feel like paying the escrow adjustment, the payment can adjust upward and I don't have to worry about changing the automatic ETF amount. One less detail to worry about.)
With all my refis I leave the payment the same. Mostly out of convenience, and I'm paying that now so I might as well, and it speeds up the equity even more. If my mortgage PITI went down 200.00 or more, I might lower what I pay to 1,500, but that only frees up 100 a month, not much at all.
I know I should probably refi, and I might.
EVEN IF I pay PMI for a couple of years and pay closing costs, it is still worth it..... just not AS worth it
Partly...I can de an undecided type....partly I'm a worst case scenario type...suppose situations change and before I get to the break even point....anything can happen...I might have to sell, could lose the job (don't foresee it but life can change on a dime). Then I lost more than if I'd just left it alone.
And 5.125 isn't the WORST rate in the world. I was happy to get that.
Like I said the refi commercials are like fingernails on a black board to me....they are what's making me feel so bad.
(I know: so don't listen to them) Again, thanks all.
With the extra PITI payment and a slight appreciation, you could refinance in 6-9 months without MI. With Bernanke opening spigots for another year, the rates will stay low.
I'm 10 years in on a 30 year loan. I was looking at refi'ing to a 15 year in the high 2s (which would have kept my payment almost exactly the same as it is now, while cutting 5 years off). If I could have done it with just bringing closing costs to the table, I would have done it, but I was going to have to almost totally deplete my cash-on-hand funds to do it, which just wasn't worth it. (Market is up substantially now in my area, but there have been no recent solds that would be considered comparable to mine to substantiate a higher price...if some happen and interest rates are still low, I will probably go for it)
Last I understood, although the HARP rates are lower than what you currently have, they are a bit higher than if you did a regular refi with appraisal, etc. For instance you might be able to get a HARP refi at 3.875 or do a regular refi at 3.5% Not sure if this is still the case. Also, I understand HARP refi's take 90 days to close and a regular refi can be done in under 30 days. So that fact would pay for your appraisal fee alone.
Call a couple of good local banks and credit unions and get some info. It's probably better to shop around and change lenders to pay less in closing costs.
I just checked with our lender and they haven't "coded" our loan to qualify yet. Apparently they are backlogged and haven't gotten all of them done. There is also some issue with our origination, we used a broker and they have since gone out of business so no recourse there. Their advice, keep calling back to see if things have changed.
Maybe if these government officials that keep telling people to refinance to stimulate the economy or to buy a house to stimulate the economy would actually TRY to do that and see all the roadblocks they would SEE that there are people like us that are responsible with our $$$ and CAN'T take advantage of these programs
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