Originally Posted by SmartMoney
"I pay taxes and insurance independent of the mortgage, and my actual credit score is around 790."
Sorry, I am stuck on this sentence. Scores are more complex than one FICO score. Each bureau has their own scoring model, completely independent of the others. And then, each creditor decides who they will report to with the credit data. What are you referring to as your actual score? There is no such thing as a single score. Do you know your scores from each of the bureaus?
A couple more questions: do you have the canceled $1000 check In your possession? Do you have the canceled checks for the following 3 months? In other words, can you prove your story? And finally, is all other credit clean as a whistle? No other lates or collections? And then, the ever contant question of a portfolio lender, are there compensating factors? If you are throwing money at principal, are there decent reserves somewhere? ie, money in the bank or parked in a 401k (without loans)? Is your LTV lower than needed?
The fact this just happened in August, means the subsequent September, October and November (last month) are your delinquent dates. This is where the value of a portfolio lender shines. In the past year I have personally seen at least a dozen human errors get erased with the credit bureaus. I know that doesn't help you now, all the could of and should ofs, what you should have dones, don't help either. But back to portfolio lending - if, big if, you can prove your story with canceled checks, a portfolio lender would read your letter explaining what happened and review all of your scores and history.....and review comp factors, you could get a rate and term refi.
I do this for a living and pay my mortgage via billpay where I bank. I didn't open a monthly statement (or two, or three), but my billpay went out. I missed an escrow/payment increase. How did I find out? The collections department called. My mortgage had been sold to someone not so savy in mortgage servicing, and if my rate was not where it was, I would refi to get away from them (Stifel). Not because I messed up, but they were nasty to deal with.
Moral of my advice: document, document, document. Whether the rate difference would provide you what we call a net tangible benefit depends is iffy, even if it means getting out of an ARM. I do not think you will miss the boat, just the opposite. I believe we are going to see low rates for years to come.
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