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Hello everyone- I closed on my property in S.C. on Nov. 29, 2008. I have a conventional mortgage with BofA and the rates at that time were 6.5 with no points. We of course want to take advantage of the lower rates but my current mortgae company, BofA is telling me that if i refinance before the one year anniversary, that they will calculate LV of my home on the purchase price and not the true market value. If this is the case then i do not meet the 80/20 rule and will have to pay mortgage insurance. I currently do not pay MIP because we took advantage of BofA no fee plus program.I have no problem paying to refinance but if we have to pay MIP then the savings are not that much..
Can someone please tell me if this is true? Are there lenders out there that will refinance us on my current balance and the true market value of my home?
Hello everyone- I closed on my property in S.C. on Nov. 29, 2008. I have a conventional mortgage with BofA and the rates at that time were 6.5 with no points. We of course want to take advantage of the lower rates but my current mortgae company, BofA is telling me that if i refinance before the one year anniversary, that they will calculate LV of my home on the purchase price and not the true market value. If this is the case then i do not meet the 80/20 rule and will have to pay mortgage insurance. I currently do not pay MIP because we took advantage of BofA no fee plus program.I have no problem paying to refinance but if we have to pay MIP then the savings are not that much..
Can someone please tell me if this is true? Are there lenders out there that will refinance us on my current balance and the true market value of my home?
Thanks!
I would think many other places could refinance you, but do you expect the market value to be higher? Either way, you should contact some other companies, because the rates are very good, and even with PMI you could still be paying less (depending on loan amount).
Our original lender will say anything to keep you in the loan you have -- read all the documents you have and review anything that is WRITTEN about pre-payment and/or minimal time before refi. If there is nothing written then it makes sense to shop for another lender.
Some areas have seen prices move upwards, and if your home is moving in the right direction and rates are favorable you should ALWAYS explore refi with multiple parties, so long as you do not have anything that would prevent you from doing so.
I asked about pre-payment penalties and all that when i applied and they said there were none. I'll read the fine print just to make sure.
What's the best way to shop for a lender to refinance? Brokers are usually the cheapest as far as points and closing costs, right? I guess i need to figure out the rate x the loan and add in the MIP just in case. The lender won't know until after the appraisal if MIP is required.
The last time i refinanced, many, many years ago we used lending tree. I don't know if they even exist anymore
Unless things have changed since I was writing loans, the purcahse price is always used to calculate LTV in the first 12 months, regardless of who the lender is. It helps keep the possibilities of fraud at bay.
Any lender using Fannie Mae underwriting (all the lenders with the good rates) will use the lower of the purchase price or new appraised value within one year of closing your loan.
You may qualify for the recently announced Home Affordable Refinance program, though.
If you qualify (if your loan is currently owned by Fannie or Freddie...which, in all likelyhood it is if you financed last year) you will be able to get a refi up to 105% LTV without paying PMI (if you don't currently pay PMI).
Fwiw, I was told the minimum you need your original mortgage for is 6 mo, not 12, but it varies by lender. I also had to look around for someone to go off tax value/appraised value versus what I paid, since it was less than 12 mo, but lenders are out there - we're talking about lots of interest money, so if you are in good shape, they will deal with you on value. Its worth shopping around, but you need to hit that 6 mo mark from what I know.
We closed in Sept 08 and refinanced closing in Jan 09...so definitely doable.
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