Refi in GA: No lender credit? (Atlanta: sale, rental market, good credit)

[hulio82]

Hi all, I live in TX, but looking to refi my property in GA. Have spoke to a couple of lenders in GA and none offer a no-cost refi or lender credit. Is this simply specific to GA?

I just refi'd my home in Texas and almost every local lender i talked to offered 2k-3k in lender credit.

Am i missing something here? I even have had a couple of GA lenders ask me why they would give a lender credit on a refi.

Any help is appreciated. Thanks in advance.

[BobbyJayATL]

Among other things, I imagine it not being an owner-occupied property is an issue.

Personally I can't really imagine a circumstance where I'd want to take advantage of a lender credit right now; given how low rates are, do you think you'll ever refi again?

[hulio82]

the property is co-owned and the other owner is the primary owner of the property.

Why would you not want to take lender credit? If there is no cost/points - its a win win. Yes - if rates continue to drop more (which i doubt), will definitely refi again.

[BobbyJayATL]

Originally Posted by hulio82

the property is co-owned and the other owner is the primary owner of the property.

Why would you not want to take lender credit? If there is no cost/points - its a win win. Yes - if rates continue to drop more (which i doubt), will definitely refi again.

Okay, then it's an abnormal ownership structure, which is still going to set off red flags for lenders.

As far as cost/points, there's no such thing as a free lunch; of course there's a cost - it's rolled into the principal or the rate. One way or another, you're paying the closing costs.

[hulio82]

Originally Posted by BobbyJayATL

Okay, then it's an abnormal ownership structure, which is still going to set off red flags for lenders.

As far as cost/points, there's no such thing as a free lunch; of course there's a cost - it's rolled into the principal or the rate. One way or another, you're paying the closing costs.

Agreed! the lender is making money some way or the other. I just closed a refi on my property in TX and had to pay 0 out of pocket and my total loan value did not change. No clue how the lender made money, but it turned out to be a good deal for me.

[ATL Golfer]

Originally Posted by BobbyJayATL

Okay, then it's an abnormal ownership structure, which is still going to set off red flags for lenders.

As far as cost/points, there's no such thing as a free lunch; of course there's a cost - it's rolled into the principal or the rate. One way or another, you're paying the closing costs.

Disagree. Many lenders make the their money on the bulk sale of loan portfolios. They will do no fee. They can be the at market rates to accomplish this.

Other lenders will try to make it off of the rate or fees or a combination of all three (loan sale).

I just closed on a 30 yr JUMBO at 2.875%. The lender credit took care of all fees except $1400 of underwriting and something else. This may make me never want to move. (They also tried to collect a rate lock extension fee and charged one at closing. I paid it at closing, wrote their CEO, and had a refund check in the mail the following week).

[BobbyJayATL]

Originally Posted by ATL Golfer

Disagree. Many lenders make the their money on the bulk sale of loan portfolios. They will do no fee. They can be the at market rates to accomplish this.

Other lenders will try to make it off of the rate or fees or a combination of all three (loan sale).

I just closed on a 30 yr JUMBO at 2.875%. The lender credit took care of all fees except $1400 of underwriting and something else. This may make me never want to move. (They also tried to collect a rate lock extension fee and charged one at closing. I paid it at closing, wrote their CEO, and had a refund check in the mail the following week).

If someone thinks he/she is getting the best rate/terms available in the market without having to pay any fees, he/she is not shopping around enough.

PS - As to your specific situation, I'd suggest you consider renting it out in the future; I've done that with two houses that I got what I thought at the time were amazing rates on (they're both under 4.25 - and to the topic of this thread, as non-owner occupied right now, despite great credit, I can't really beat the rates with refi's unfortunately).

They're pretty significantly cash flow positive, in a great rental market even now (not in Atlanta), and if you've got good credit it shouldn't take you a significant amount of time to pull together whatever cash you need to buy your next house.

[arjay57]

What is a lender credit?

[hulio82]

Lender credits work the same way as points, but in reverse. You pay a higher interest rate and the lender gives you money to offset your closing costs. When you receive lender credits, you pay less upfront, but you pay more over time with the higher interest rate.

Lender credits are calculated the same way as points, and may appear on lenders’ worksheets as negative points. For example, a lender credit of $1,000 on a $100,000 loan might be described as negative one point (because $1,000 is one percent of $100,000).

https://www.consumerfinance.gov/ask-...y-work-en-136/

[arjay57]

Originally Posted by hulio82

Lender credits work the same way as points, but in reverse. You pay a higher interest rate and the lender gives you money to offset your closing costs. When you receive lender credits, you pay less upfront, but you pay more over time with the higher interest rate.

Lender credits are calculated the same way as points, and may appear on lenders’ worksheets as negative points. For example, a lender credit of $1,000 on a $100,000 loan might be described as negative one point (because $1,000 is one percent of $100,000).

https://www.consumerfinance.gov/ask-...y-work-en-136/

Thanks for the enlightenment!