Refi... I don't think I can... can any experts point me in the right direction?

[pOrk]

Joy sure what you're trying to explain to me here besides the obvious? I don't have cable tv for a reason, I have much better things to spend my money on. I know I can't afford a 1500 dollar per month mortgage either

[Wagonbacker9]

Joy sure what you're trying to explain to me here besides the obvious? I don't have cable tv for a reason, I have much better things to spend my money on. I know I can't afford a 1500 dollar per month mortgage either

My mortgage comes in at about $1200, but thats including my homeowners and my taxes paid into escrow, plus the PMI. I'd agree, if I was willing to live without a phone, or any entertainment, I could have probably put together 20% down. Would have been a pretty shitty first decade of my adult life though.

[wrath]

$1500 is what I used to pay in rent in Waukesha and the state gave me a whopping $300 back on my income taxes for paying $18,000 in rent in a year. You have to live somewhere, might as well own a home if you figure you can always have a affordable commute to a job. I don't have data on my phone but my next one will. I don't have cable TV either. My job will pay for a phone but I don't trust them. They won't pay for my Internet though. But anyway, people's housing cost is smaller than what it used to be (as a percentage of disposable income) which is why we can afford things like paid TV, Internet, and cellular phones.

I financed the whole loan because at 4.5% on a 30 year note I'd rather borrow as much as I can now so I can stick it to the banks later when inflation kicks in.

But anyway, call up a few credit unions. Or if you're desperate call Quicken Loans/Rock Financial. If anyone can find a lender that will take you on, it's them.

[pOrk]

My mortgage comes in at about $1200, but thats including my homeowners and my taxes paid into escrow, plus the PMI. I'd agree, if I was willing to live without a phone, or any entertainment, I could have probably put together 20% down. Would have been a pretty shitty first decade of my adult life though.

You ain't dating the right women or keeping the right friends if you're only source of entertainment is cable tv my friend. Just saying. Once you go without cable for awhile you realize it's a huge waste of money and find much better ways to spend your time, you only live once why live it on a couch?

Wrath I completely agree with you, just saying its harder to refi an already rocky loan most banks aren't willing to take those risks anymore.

[88Nightmare]

Cancelling cable TV was one of the best decisions ever. 250 channels and never anything on? Waste of $60/mo. or $720 a year. That's $720 a year I can use to take my girlfriend out to dinner, go out with friends, go to the movies (although that is a rip off too), or just put in the bank.

I need to start looking at houses.

[PB86MCSS]

25 years ago it was impossible to get a loan without mommy and daddy signing for you AND 20% down, how did people buy homes back then? My parents gave me a pretty generous house warming gift, 2 weeks of labor helping me install new floors and paint. I had to sell everything to get the down payment, and I stole my house. Just saying though, can't expect a bank to refi on an upside-down house after what happened 4 years ago. Why refi an already risky loan? Its NO RISK to the buyer, all the risk lies on the bank. You get in trouble, you walk away with a bad credit score for a few years. The bank takes a 30k+ loss on the house at a minimum.

The point of these new changes is that many buyers do just that, walk away. Risk isn't all on the buyer having bad credit for x many years and the bank is just fine. The risk IS also with the bank on foreclosures. They don't get all of their money back and lose the financing/interest. This helps alleviate that, putting some risk on the bank but helping avoid more foreclosures.

[Wagonbacker9]

You ain't dating the right women or keeping the right friends if you're only source of entertainment is cable tv my friend. Just saying. Once you go without cable for awhile you realize it's a huge waste of money and find much better ways to spend your time, you only live once why live it on a couch?

Wrath I completely agree with you, just saying its harder to refi an already rocky loan most banks aren't willing to take those risks anymore.

I was actually speaking generally... ANY form of entertainment...

[PB86MCSS]

There are some very recent changes to refinancing that might help some homeowners, particularly if you owe alot more than the home is currently worth. I don't want to get ahead of myself but in talking to our bank (Wells Fargo) this evening, it looks like we will FINALLY be able to re-fi, cutting 2.375 off our rate. Submitting paperwork tomorrow AM and locking in the rate. Our roadblock the first two times was the appraised value being too low for what we owe (bought in 07'). The current program, I believe called HARP2, requires an appraisal still but it doesn't matter if the property is at $1, if you meet other criteria as you normally would need (debt to income, payment history, credit rating, etc) you might now qualify. Just a heads up if it helps anyone else who was in our shoes. Each bank is surely different a little but the changes last week or so might be worth looking into for those who are like us .

[PB86MCSS]

Just an update if anyone read my above post and is in a similar situation to us (underwater but good everything else) we close on our re-fi this Monday, so less than 30 days to close from when we started the process and get a desirable rate (4.625) which will save us $250-280 per month.

[jbiscuit]

4.625 is desirable? Banks were locking rates at 3.975 yesterday! (for 30 fixed)

[PB86MCSS]

How much equity do you need along with credit to debt/income ratio, etc. to get the rate some banks advertise?

We have very good credit and pretty good debt/income ratios but the home being underwater and we have maybe 7% "equity" from what it sold for, I think the advertised rate isn't reality for us, or for many (most?) people.

Compared to 7.0, 4.625 is holy-balls desirable .

[pOrk]

^ Agreed

I am waiting on another paycheck to refi but I have 40% equity in my home with the refi we are going for and we barely qualified for the 3.875 2 months ago. Hoping we can lock it in near there now, currently at 5.25 but want to take care of some school loans.

[jbiscuit]

Of 7.0 to 4.625 will be huge but you could have gotten lower than that even with minor equity in the home. Most refis being written last week that were sub-4% were 20% equity loans and above. So Pork you should be able to get a 3.975 easy. Or better yet, refi to a 15 or 20 at 3.725!

[pOrk]

When I refi it will be a 15 or 20 for sure, just a matter of timing. Wish the paychecks rolled in faster haha

[PB86MCSS]

We locked in the rate a month ago, I think rates went down slightly from then. I don't know all the rates we could of gotten when shopping around to be honest, in talking to Accunet they couldn't do anything for us and even said to work with our current bank was the best bet and with the HARP program, or HARP2 as someone called it, I don't know if we could of gone elsewhere for the same deal. The changes to the HARP program letting someone who owes well over 125% of what the home is worth are the only way we could of done this. Basically, I don't think we had a lot of options.

This was kind of my point in the thread, for those in our situation, this can be done whereas less than a year ago or even months ago, you had zero chance of refinancing.

[bikedad]

DO NOT DO AN ARM! Interest rates will be volatile in the next couple of years.
If you can afford a 15 year fixed you should go that route or at the very least 30 year fixed.
Just had a conversation with an investment adviser about our business. With the amount of paper currently pumped into the system you will lose terribly. Interest rates are destined to go up. They are currently held down to try and jump start the economy but it isn't working. (Businesses have cash but no warm fuzzies to spend it). That means the Fed will have to increase taxes and interest to cover the screw up that's currently in place.
ARM's are a huge gamble right now.

[PB86MCSS]

Good advice although I don't think anyone is talking about doing an ARM. I also agree that rates can only go up, but they have been this low and relatively in the same range for quite some time. Not sure they will go up much unless we have a lot of good signs the economy is improving. Still seems to be mixed signals but generally improving.

Personally we're also really glad to refinance now rather than when we both have our own homes (possibly within a year) and this is a rental property. My understanding is that refinancing in that scenario won't get you anywhere near the best rates.

[PureSound15]

Lots of situations are the right one for an ARM, IMHO.

Of course, if you can swing the 15 am payment, there's nothing wrong with building more equity. The likelihood of your deal being sold a number of times goes up pretty high once you're in a 15 or especially 30 year product.


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