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I want to refinance getting a mortgage for substantially less then the current loan amount. I have the money and want to just pay it at the closing.
What are the requirements besides showing the funds are available?
One told me that all funds must be in a cash account ten days in advance, and one even said the funds must be in an escrow account.
Since I am simply looking for a new loan on a property I own I don't understand why I would have to do anything but wire the funds to close... I really don't want to sell investments or rearrange accounts far in advance.
Yes, it's a refi, but you still have to qualify just as you would if you were buying the home for the first time. Depending on your loan type (VA, FHA, etc.) there may be a few steps and/or expenses you are able to skip, but that will be few and far between. Plus, each lender has certain requirements/stipulations. The bottom line is this will save you money in the long run, so it will involve a little finesse, patience and effort. Hang in there, smile, and think of all the money you'll save... It will be worth it!
Yes, I have been jumping through all the hoops and paying for all the requirements... what I am having trouble with is tying up my money early to re-buy my own home. Many refi without putting up any new money and here I am being asked to tie up my funds for no reason. I guess I could have paid down the loan first and then looked for a new loan but thought this would be easier.
Bottom line... is there a industry wide standard on funding a refi in advance?
There could be hangups or delays on selling your investments and getting the money. The bank wants proof you have those funds now or waiting in escrow at the closing company. And they may even need you to prove where those funds came from.
You are the one asking them for money, so its their game, their rules.
The big imposition that might be new to you is Sourcing your own funds. These days, we have to document monies used at closing, and for simple asset accounts, meaning we documentarily track them until you are insane.
The mortgage industry has gone through what appears to be nonsensical changes over the past fifty years. Years ago it was straight forward... you showed assets, income, credit references, and the property. Then ten years ago it seemed they wanted little or no information. Now when I clearly have the resources to afford the property I am forced to jump through stupid hoops.
I am resigned to the fact that I will have to fund this in a way I dislike but will do it to close a deal with today's low interest rates. (If it wasn't for some tax implications I would just pay off the mortgage).
Well dont keep paying mortgage interest in order to write it off your taxes. It doesn't make sense to pay $2 in interest to a bank in order to save $1 in payments to uncle sam. I hope its another reason besides mortgage interest deduction.
The only reason the mortgage interest deduction is if you itemize in the first place. Then it becomes about making more in investments from that cash rather than paying off the mortgage.
I am resigned to the fact that I will have to fund this in a way I dislike but will do it to close a deal with today's low interest rates. (If it wasn't for some tax implications I would just pay off the mortgage).
Quote:
Originally Posted by 399083453
Well dont keep paying mortgage interest in order to write it off your taxes. It doesn't make sense to pay $2 in interest to a bank in order to save $1 in payments to uncle sam. I hope its another reason besides mortgage interest deduction.
What 399083453 said. There needs to be a second half to your reasoning (e.g., something along the lines of making better returns in the market, or current cash-flow or reserves issues, etc.), otherwise the logic makes no sense. "I need to throw away $X in interest so I can earn $X/4 back from deductions."
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