are there any downsides if you haven’t been in the house that long (less than 2 years), and may sell in a year or so?
I have two coworkers who used a no-closing cost provider, got their interest rate down almost a whole percent lower than what I am at, and best of all during the transaction period, got to miss a whole payment.
Any downsides to this?
[QUOTE=ninerID;315618]are there any downsides if you haven’t been in the house that long (less than 2 years), and may sell in a year or so?
I have two coworkers who used a no-closing cost provider, got their interest rate down almost a whole percent lower than what I am at, and best of all during the transaction period, got to miss a whole payment.
Any downsides to this?[/QUOTE]
Nope, I just did the same thing with my house and I haven’t been in it two years yet. I also used a no closing cost option and lowered my rate. I did pay a quarter point but will make that back up within two months of lower mortgage payments. The only time it wouldn’t work is if you had to pay closing costs/points and then decided to move soon thereafter. You wouldn’t recoup your costs.
I’ve been in the mortgage business for 12 years. There is a downside. #1 You have to have equity to do this. #2 You will be losing a substantial chunk of it by rolling those costs into your loan that you would have been able to put in your pocket when you sell your house. It’s also going to cost you something to sell your house (realtor’s commission) I have seen situations before that the seller (i.e. you) would have to bring money to the closing table just to sell their home. :unhappy:
[QUOTE=1richman;315644]I’ve been in the mortgage business for 12 years. There is a downside. #1 You have to have equity to do this. #2 You will be losing a substantial chunk of it by rolling those costs into your loan.:unhappy:[/QUOTE]
Hence the no closing cost option being the way to go.
if i am just refinancing the orginal loan amount, it shouldn’t hurt my equity, correct?
[QUOTE=ninerID;315647]if i am just refinancing the orginal loan amount, it shouldn’t hurt my equity, correct?[/QUOTE]
Did you put any money in when you got the first mortgage? Has the value of the home decreased? In other words, do you have any equity in the house now? It shouldn’t hurt the equity unless you roll points/other costs into the loan amount or unless the home value has decreased.
if i am just refinancing the orginal loan amount, it shouldn't hurt my equity, correct?
I’m not a mortgage expert by any means but I just did what your doing a few months ago and I don’t see how you won’t hurt your equity by doing a no closing cost refi. If your house went up in value in the last 2 years your LTV will go down but the actual equity you have will go up from your closing costs your rolling into the loan. I’m just wondering what the point is if your said your going to sell the house in the next year.
I'm not a mortgage expert by any means but I just did what your doing a few months ago and I don't see how you won't hurt your equity by doing a no closing cost refi. If your house went up in value in the last 2 years your LTV will go down but the actual equity you have will go up from your closing costs your rolling into the loan. I'm just wondering what the point is if your said your going to sell the house in the next year.Who did you go through? Did they do no closing cost?
Who did you go through? Did they do no closing cost?
I went through Countrywide… :huh: I had them before and they had a pretty good offer at the time, I know they are doing crappy at the moment though. What do you mean by “no closing costs” I didn’t have to pay anything out of pocket but it all got rolled into the loan. I don’t think there is any place that has no closing costs, none of the 3 places I called did anyway.
[QUOTE=EE9er;315660]I went through Countrywide… :huh: I had them before and they had a pretty good offer at the time, I know they are doing crappy at the moment though. What do you mean by “no closing costs” I didn’t have to pay anything out of pocket but it all got rolled into the loan. I don’t think there is any place that has no closing costs, none of the 3 places I called did anyway.[/QUOTE]
If you had to roll the costs into the loan, then it is not a no-closing costs loan. You’re basically paying the fees with your equity, and paying interest on it to boot (lose-lose). Don’t worry, most of these so-called no cost mortgages are just that.
Ever see that balloon commercial that one of the car dealers used to run? Any lending/loans can use that illustration. If you squeeze one end, you just inflate the other. All of these lenders are going to get paid, one way or another.
I went with a credit union on my initial purchase mortgage. My rate is about 1/8th of a point higher than the best rates I saw, and I paid a quarter point fee, along with attorney’s and appraiser’s fees. It was a pretty decent deal, but I absolutely will not refi unless they offer me 3/4’s to 1 full point lower on my rate, and the only thing I have to pay is the appraisal or another quarter point, up front. No roll ups, whatsoever.
And paying PMI is another thing I just won’t do, if there is any way to get out of it. A lot of those options have gone away, so I feel for anyone just getting started on building home equity.
If you had to roll the costs into the loan, then it is not a no-closing costs loan. You're basically paying the fees with your equity, and paying interest on it to boot (lose-lose). Don't worry, most of these so-called no cost mortgages are just that.Ever see that balloon commercial that one of the car dealers used to run? Any lending/loans can use that illustration. If you squeeze one end, you just inflate the other. All of these lenders are going to get paid, one way or another.
I went with a credit union on my initial purchase mortgage. My rate is about 1/8th of a point higher than the best rates I saw, and I paid a quarter point fee, along with attorney’s and appraiser’s fees. It was a pretty decent deal, but I absolutely will not refi unless they offer me 3/4’s to 1 full point lower on my rate, and the only thing I have to pay is the appraisal or another quarter point, up front. No roll ups, whatsoever.
And paying PMI is another thing I just won’t do, if there is any way to get out of it. A lot of those options have gone away, so I feel for anyone just getting started on building home equity.
So… it sounds like we are saying the same thing. You have to pay for the title and an appraisal, as well as Credit check, prepaid interest, tax service… Like you said I understand some places will just add it to the back of your loan so you’ll never really “see” it, but for anyone to say it’s “no closing costs” is just a lie. I totally agree with you about refi only if you are going to lower your rate by 3/4 or a point, I actually got mine lowered 1.25 so I thought it was worth it… To each his own.
[QUOTE=EE9er;315683]So… it sounds like we are saying the same thing. You have to pay for the title and an appraisal, as well as Credit check, prepaid interest, tax service… Like you said I understand some places will just add it to the back of your loan so you’ll never really “see” it, but for anyone to say it’s “no closing costs” is just a lie. I totally agree with you about refi only if you are going to lower your rate by 3/4 or a point, I actually got mine lowered 1.25 so I thought it was worth it… To each his own.[/QUOTE]
Well yes that’s a totally different than a no closing cost loan. The place I used just charged a 0.25% fee, which I paid at closing, and they paid all the other crap that usually associates with closing. I only lowered my rate by 0.625% but it made a $250/month difference in my monthly payment. That’s $3,000 a year savings that basically cost me around $500. The place I used is called CapCenter and it’s based in Richmond but does business in NC also. The website is [URL=http://www.capcenter.com/capnew2/capreal.asp]CapCenter[/URL] if anyone wants to check them out.
So.... it sounds like we are saying the same thing. You have to pay for the title and an appraisal, as well as Credit check, prepaid interest, tax service..... Like you said I understand some places will just add it to the back of your loan so you'll never really "see" it, but for anyone to say it's "no closing costs" is just a lie. I totally agree with you about refi only if you are going to lower your rate by 3/4 or a point, I actually got mine lowered 1.25 so I thought it was worth it.. To each his own.yeah, you don't "see it" you just pay a higher rate, the guy i am working with was pretty up front about that anyways. I won't be in the house that long, so paying points or closing costs is not beneficial to me.
The value of my house has went up enough that I can refi an 80%+10% loan (+ an additional 10% i put down) into just 1 loan, with no PMI. I currently have a 6.5% interest rate, and a 7.667% rate. If I can get that all in one loan, at around 6% with no closing costs I save about $100 a month.
I don’t see how it really damages the equity. Isn’t equity just Value minus amount owed? If I straight up refi the amount left over, without taking anything out of my equity, i don’t see how that hurts me.
yeah, you don't "see it" you just pay a higher rate, the guy i am working with was pretty up front about that anyways. I won't be in the house that long, so paying points or closing costs is not beneficial to me.The value of my house has went up enough that I can refi an 80%+10% loan (+ an additional 10% i put down) into just 1 loan, with no PMI. I currently have a 6.5% interest rate, and a 7.667% rate. If I can get that all in one loan, at around 6% with no closing costs I save about $100 a month.
I don’t see how it really damages the equity. Isn’t equity just Value minus amount owed? If I straight up refi the amount left over, without taking anything out of my equity, i don’t see how that hurts me.
VA, that looks like a good deal, I didn’t know there were many places that did that. Like I said I’m not a mortgage expert, but it does look like their rates are a little higher than you could get, everyone’s situation is different so it could work for some.
niner, yes sounds good, if you don’t mind paying a higher rate for them to pay the closing costs your equity should stay the same. PMI is really the only reason to worry about equity in my mind, maybe others can comment, but if your getting rid of that with a higher appraisal your good to go.
[QUOTE=EE9er;315696]VA, that looks like a good deal, I didn’t know there were many places that did that. Like I said I’m not a mortgage expert, but it does look like their rates are a little higher than you could get, everyone’s situation is different so it could work for some.
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Yes, the rate may be a tad higher but considering the savings from not having to paid closing costs I went with it. We got another 30 year mortgage but plan to pay it off in approximately 15 years or before the first kid heads off to college.
When you refinance, does your loan period start over. e.g. You have been paying your loan for 2 years on a 30 yr mortgage, which leaves 28 years left. If you refinance does your loan period start over at 30 years or does it stay at 28.
[QUOTE=Hawthorne_49er;315703]When you refinance, does your loan period start over. e.g. You have been paying your loan for 2 years on a 30 yr mortgage, which leaves 28 years left. If you refinance does your loan period start over at 30 years or does it stay at 28.[/QUOTE]
Most of the time yes, as you are getting a “new” 30 year or whatever year mortgage. I guess you could do a 28 year mortgage if you wanted to. What you are talking about sounds more like “recasting” where you just pay a fee to readjust your monthly mortgage payment. Say you want to plop down $30 grand on the principal. Well, that extra principal reduction would lower a mortgage payment but not if you didn’t recast. With recasting your rate stays the same and the bank only charges about $250 - $300 to redo your monthly payment.
I just moved so I got a new Mtg, my only 2 cents is to talk to a few companies and play them off each other. The market for true “qualified” people is a hell of a lot smaller, they NEED your business. Shop your deals and let em beat it.
I just moved so I got a new Mtg, my only 2 cents is to talk to a few companies and play them off each other. The market for[B] true "qualified" people[/B] is a hell of a lot smaller, they NEED your business. Shop your deals and let em beat it.
If I had enough for a down payment I’d be one of those people… damn it.
[QUOTE=CharSFNiners;315723]If I had enough for a down payment I’d be one of those people… damn it.[/QUOTE]
“Credit Worthy” would probably be a better term than “qualified”. You don’t need top be flush to be credit worthy, just responsible and present a high probability of timely repayment.