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I have a rental condo with a balance of 201k and 23 years left on a 30 year note. monthly payment (5.875% fixed) is $1525 including escrow and hazard ins. (it is a fannie mae loan)
i have the chance to refinance with the same lender (BofA). Rate will be 4.75%. payment will be $1250 including escrow and hazard.
Closing costs are $3600 (including half a point) so i'll break even in about 14 months....
considering that i'm not going to sell the place anytime soon (I put the value at somewhere around $165k!), this seems like a no brainer....but for some reason, i'm hesitant. not sure why.
Have you shopped around to see if you can do better - especially in those closing costs? If you have, and you can't, I'd say go for it.
But will it appraise high enough to actually get that loan? It doesn't sound like it. . .
no, haven't shopped around, since this is a HARP same lender program. it allows for underwater mortgages to be refinanced without any documentation (not that i would mind the documentation).
it will certainly NOT appraise for the 200k i owe. and i've told them this and they know it. it'll appraise for no more than 160k. but with this program, there is no appraisal. I locked in the rate yesterday.
Quote:
Originally Posted by SmartMoney
How much out of pocket to get the thing rolling?
Go, do not stop. Condos are a pain right now anyway.
True, no brainer. They won't close you fast, but they will hold your lock until you close. They'll transfer escrows and you'll save on recording.
$35 bucks out of pocket....for the credit report.
he said they close on these within 60 days. i wanted it done within 30, but as you said, they seem to be in no hurry.
I have an underwater condo just like you. I refinanced with my original lender at 4.75% - my new loan was for $190K.
I think you should definitely do this. Ask if you can have the bank pay the fees. I refinanced under HARP 2.0 so my only out of pocket costs was $2,500 at most (cant remember but it was less than $3K). I have heard really bad things about Bank of America - I really would be hesitant to go with them again, so shop around to see what other lenders offer you before signing on with them again.
Good luck and congrats! Theres no reason why you should have a loan for more than 5% in this market. I wish I could do better than 4.75% but its an investment property (I had to rent it after getting married because the appraisal value is only around $150K).
PS By the way, why did you bother to lock in the rate? I doubt you would be paying a higher rate w/in the next 60 days. Interest rates are not going up that fast yet. If anything, its been pretty stable since mid January. I would have not paid a dime for a rate lock.
I have an underwater condo just like you. I refinanced with my original lender at 4.75% - my new loan was for $190K.
I think you should definitely do this. Ask if you can have the bank pay the fees. I refinanced under HARP 2.0 so my only out of pocket costs was $2,500 at most (cant remember but it was less than $3K). I have heard really bad things about Bank of America - I really would be hesitant to go with them again, so shop around to see what other lenders offer you before signing on with them again.
Good luck and congrats! Theres no reason why you should have a loan for more than 5% in this market. I wish I could do better than 4.75% but its an investment property (I had to rent it after getting married because the appraisal value is only around $150K).
PS By the way, why did you bother to lock in the rate? I doubt you would be paying a higher rate w/in the next 60 days. Interest rates are not going up that fast yet. If anything, its been pretty stable since mid January. I would have not paid a dime for a rate lock.
i have the ability to lower the point (3/8) and the rate 4.75% once before i close.
honestly, i didn't know i could proceed without locking the rate.....
Crap.
no, haven't shopped around, since this is a HARP same lender program. it allows for underwater mortgages to be refinanced without any documentation (not that i would mind the documentation).
it will certainly NOT appraise for the 200k i owe. and i've told them this and they know it. it'll appraise for no more than 160k. but with this program, there is no appraisal. I locked in the rate yesterday.
$35 bucks out of pocket....for the credit report.
he said they close on these within 60 days. i wanted it done within 30, but as you said, they seem to be in no hurry.
With this additional information, I agree. Run, very very fast, and get this done.
I agree with the others, get it done. But my extra advice would be to continue making the same payment that you currently do. When we refi'd earlier this year, the bank calculated us paying off the loan in 19 years instead of 30 if we kept the current mortgage payment.
Also, did you look to see what a 15 year mortgage would be rate wise and payment wise? You might be closer to your current payment but get it over with many years early.
Market tanked (rates up) yesterday - if you didn't run fast, please call back BofA and confirm rate.
yes, i did lock it in at 4.75%
i'll double check to make sure the guy did it though.
thanks.
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