Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
if I refinance, does that mean, the lender is going based
off the current market value of my home, NOT the value when we first
purchased it? in other words, it's almost like rebuying this home
again...what I mean is...I got the place say for 270K from a short
sale...and say when they hire a appraiser and they appraise it for
300K NOW, I'm borrowing my NEW loan off of this 300 K, NOT the 270K,
am I right? It's like I'm buying a 300K home now and it's no longer a 270K home. it would defeat the whole purpose of getting a short sale
years ago as they are lending me loan based on 'today''s market
value.
if this is the case, then it would make no sense to refi for our case
maybe, even if the i rate is lower, as we went by the cheaper short sale price years ago?..please help me with this.
the refinancing lender always asks for current home value and if the appiasing value comes out 10K lower or higher, she said it'll then affect our locked i rate. I asked why, she said it'll affect the loan I borrow, but then I thought we are just continuing borrow the same amount of loan we are currently borrowing BEFORE the refinance. we are just getting a lower rate to refinance that same amount of loan?
if anyone can help. if i got the property at 270 for a short sale, but want to refinance today due to the lower rate, I might not benefit as much as the lender goes by the value of the home at the time I refinance and not the short sale price I purchased correct? then it defeats the purpose of getting a short sale years ago as I got it at a cheaper deal?
my main concern is if I refinance today, it's almost as I'm getting a loan from the today's home value right? kind of like getting my home all over with today's value rather than the short sale value we got years ago?? thanks for your help.
if anyone can help. if i got the property at 270 for a short sale, but want to refinance today due to the lower rate, I might not benefit as much as the lender goes by the value of the home at the time I refinance and not the short sale price I purchased correct? then it defeats the purpose of getting a short sale years ago as I got it at a cheaper deal?
my main concern is if I refinance today, it's almost as I'm getting a loan from the today's home value right? kind of like getting my home all over with today's value rather than the short sale value we got years ago?? thanks for your help.
I really dont understand your post? or your question? what does the increased value of your home have to do with any rate of a mortgage? please explain. Just because you purchased a home for less than it was worth, doesnt mean its fair market value was the purchase price, you understand that right?
The lender will likely require an appraisal. From what you say, you expect the property to appraise for significantly more than you paid. If it appraises for more than you currently owe, you should be in good shape, all else being equal. If you do not like the value the appraiser assigns, you may want to get a second opinion. Bad appraisals are part of the reason the lending business is in such bad shape, and you want to look at yours closely to see what comparable properties are being used. In some markets, there are so few sales that it is hard for appraisers to find good comparables.
The interest rate may depend on other factors, especially the term of the loan --- 10 years, 15 years, 30 years? --- and your overall financial status. People with good credit histories get rewarded with lower rates.
I am not a real estate or banking professional, just someone who has bought and sold a few homes. There are others here who will have more info for you. You are off to a good start by doing your research.
I am perplexed that they would tell you that the value of the property would affect the interest rate in the price range that you are describing. I don't understand why a variation of 10K either way would affect the interest rate. Usually I just tell them I want to borrow the amount I want, and they quote an interest rate. Are you changing lenders or staying with the one that currently has the loan? I am in a small city and do most of my banking with one institution. They know me, I've been a customer for a long time, loans are always paid on time, and I get good rates.
hueimo, I think you are under the impression the bank is going to force you to go get a loan for whatever your appraised value is - but that is not the case.
When you said:
Quote:
but then I thought we are just continuing borrow the same amount of loan we are currently borrowing BEFORE the refinance. we are just getting a lower rate to refinance that same amount of loan?
You are correct in what you thought - you are just continuing to borrow the same amount of money but at a lower interest rate. There are closing costs involved on a mortgage refinance, just like there is on a purchase. If you have enough equity (the difference between what you owe, and what your home will appraise for) then you can choose to finance those closing costs into the new mortgage amount, or you can choose to pay them out of pocket.
Your home also has to appraise for a certain amount depending on how much you are borrowing, and the loan program/type you are attempting to refinance into. If you owe $270k and your home only appraises for $260k, then there is going to be a lot less options, if any at all, for you to refinance, unless you want to bring in a lot of money at closing to pay down your mortgage amount. If you owe $270k and your home appraises for $300k, then you should have many options to refinance.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
