Refi: Want To Tell Off Everyone (recommendation, 1%, mortgage, mortgage)
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The first is just a rant. Is there ANY lender out there that doesn't try and rope you in the second you hit their site? Almost all of them have "loan calculators" that, to me, border on bait and switch, and make me bounce off the page and not even want to do business with them.
You enter the numbers. Then hit "calculate", "get quote", or whatever and boom: Before any info is revealed, they ask for name, address, email, etc. I don't want to give all of that out. I made that mistake once and these guys are like vultures. It's gotten so frustrating and annoying that now, I spam THEIR inboxes with names like Elmer Fudd, Bubba Gump, and Up Yours, all accompanied with a dead/invalid email address and the phone number to the BBB.
Can I just shop and get some info from anyone without having to give all that out first? It's not that I'm opposed to giving it out per se. I'm just annoyed at this tactic that, to me, seems desperate if not outright deceptive. And so, leaves a bad taste in my mouth.
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The second part is: does it even make sense for me to refi...assuming I even could, taking into account points, fees, etc. Here are my approximate numbers:
State: CA Type: Refi-Single Family Residence Amount Owed: $190k Est Property Value: $210-$220k Credit: 740-ish Current Interest: 4.875% Type: FHA Property Tax: Approx 2k annually Mortgage Ins: $1200/annually (I bought at end of Q2 '09, so I've heard that this payment has skyrocketed since then; and has been an impediment to me in the past: the 'lower payment' was effectively washed out by a much, much higher insurance payment, meaning that the bottom line was minimal or no change to how much I spend each month)
Total monthly payment: $1400 (includes taxes into impound acct, aforementioned mortgage insurance)
And yeah. I know that first time/FHA buyers tend to be viewed as third class citizens. But in the 5½ years I've been here, have not been even one day delinquent one time. And my FICO reflects that.
Ifs: If you have a 30 year and can refi into a 15 year for a similar payment do it. If you have a 30 year and want to refi into a 30 year and you aren't saving significant money you probably shouldn't refi. If you plan on selling in the next 5 years you probably shouldn't refi.
If you do refi go a to local lender that isn't BoA or WF. Get recommendations from friends/family/real estate agent.
I totally agree with you on your rant part. That is definitely becoming the norm. It's rare these days to find any site that will give you a quote for anything at all without wanting your entire life history first. I refuse to do it also, which makes shopping around more difficult, which I suppose some businesses might consider a plus, but also makes it more difficult for any one company to get my business. I usually do as Brandon said, and start asking everyone I know for recommendations, and then go in in person, instead of using the website. I'm very anti-"make you sign up before giving any information", and my company's real estate website does not do that (though it was an option) because I'm so adamantly against it.
I recently did a refi through a local credit union in my area. They paid for all my closing costs (they did NOT roll them into the new loan like most banks do on "no closing costs" refi). So look into whether any credit unions have that as an option. Note, my credit union required 20% equity to do a refi at all.
Your main problem here, and why I wouldn't be ready to refi yet myself with your numbers is that you haven't reached 20% equity to get rid of that darn PMI. Once you can do that, refi'ing is a no-brainer. Make that go away as fast as you can. But most banks right now are wanting 20 or even 25% equity to do the refi in the first place, let alone to do it without the PMI.
Also, if you are talking about going back to another 30 year loan, bankrate.com is showing the national average today as just over 4%, so you are likely talking about cutting less than a percentage point. If you could get rid of the PMI, I'd say to do it. But unless you can find someone like my credit union who does a true no cost refi, it probably isn't worth it for less than 1% savings and still having the PMI on there.
I recently did a refi through a local credit union in my area. They paid for all my closing costs (they did NOT roll them into the new loan like most banks do on "no closing costs" refi). So look into whether any credit unions have that as an option. Note, my credit union required 20% equity to do a refi at all.
They did NOT pay your closing costs. It's in your interest rate. I guarantee you 100% that if you wanted to pay your own closing costs, you would have gotten a lower rate. Banks/Credit Unions don't do anything for free. It's the new way of paying closing costs without increasing the loan amount so people think it's free, but you're paying for it over the life of your loan.
They did NOT pay your closing costs. It's in your interest rate. I guarantee you 100% that if you wanted to pay your own closing costs, you would have gotten a lower rate.
We had no mortgage, but then decided we wanted to borrow $20K for some landscaping.
Our credit union ate $1600 in fees.
Loan is 3.25% for 5 years.
I looked at rates and no way could have gotten lower at that time.
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