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Looking for a true ZERO cost refinance to keep or lower current rate of 5.125% (fixed)

Currently owe about $120K on $250K (+/-) owner occupied home. Would like a local lender (tri-county metro detroit MI area) or broker. Excellent credit. Balloon due in March of 2010.
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October 09 2009 - Macomb Township
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Best Answer
Try Bank of America - I know they have a true no closing cost loan - I lost a deal to them for this reason... Hope this helps!
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October 13 2009
Take that deal and lock it. The difference is only $65/month but you are also applying the same amount of increase towards principal, starting off, $221 in current payment vs $287 in principal on the 20 year. If someone could beat it ( I doubt it ) it will only be 1/8th lower rate for a complete no closing cost loan.   
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October 13 2009
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Was just quoted 20 year fixed true no cost loan at 5.125% with payments of $800.26

I would prepay the appraisal and get that reimbursed at closing.

This is a broker I've used before, so I know it's legit.

Can anyone beat this?
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October 13 2009
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Current Principal and Interest is about $735 per month. Would like to reduce the term to 23 years or less and keep payment the same without having to pay refinancing loan costs.
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October 13 2009
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Just checked, but Bank of America does not offer no cost loans for refinancing. Thanks anyway.
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October 13 2009
Might have a better shot for that Zero cost refi now with rates being a little lower.
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October 13 2009
What is your current principal and interest payment?
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October 13 2009
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Problem is, I don't know how long I'll be in this home . . .but I'm guessing that I'll move within 7 years, but perhaps not by 5 years. I may even move within the next few years or sooner. Hard to say right now. Looking for work that could move us out of the area.
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October 13 2009
7 year balloons are more rare now and are most likely a bank product, you get the same result with a 7/1 Arm but dont have to payoff after 7 years. If you are going to keep this property longer than that I would recommend a 15, 20, or 30 Yr Fixed. You may not see fixed rates this low again for 20 or 30 years, plus saves you the expense of refinancing again. The 5 year arm rates are attractive but after 5 years you may find rates are at the top of the curve at 8-9% fixed and not worth the risk if holding the property longer.  
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October 13 2009
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Follow up to question:
Would consider another 7 year balloon with fixed rate at a lower interest rate. Someone quoted me a 5 year ARM at 4% with $500 in closing costs.
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October 13 2009
go 15 year fixed, and you can probably get a rate improvement while still covering your costs...
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October 12 2009
Hello Clay-  The escrow waiver was included in my numbers to gmmank-  Again, there is not that much money to work with here but at 5.125%, the YSP is around 2.375% so I can work a bit looser giving some back-

Even if Wells as BoA does not offer no closing costs-  Problem is rates are through the roof-  Not worth it in my opinion if you plan on staying in home more than 4 years-
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October 12 2009
I agree with Erez that 5.125% is realistic for a no point loan. I disagree on the waiving escrow because it is another .250 point added to the closing costs and escrows are prepaids not closing costs. Simply roll the new escrow into the new loan or pay it out of pocket at closing since about 90% of the new escrow will be refunded to you by your current lender after you pay the existing loan off. The loan amt of $120K just does not generate enough premium to pay all closing costs but Wells has done this size loan in '09 at no cc, so you may want to check with them, if you can wait 3 months.
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October 12 2009

You can currently get a 5.125% rate with zero points 30 Year fixed-  The most that could be covered in fees is around $500 from the title end-  (That can be between title policy, title closing fee, etc-) -  Lender fees total around $1700-  Section 800-  Includes everything-  Appraisal, processing, underwriting , etc-.  I would have you waive escrows to mitigate closing costs.

Best that could be done with this loan amount.

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October 12 2009
Why a no cost loan?  Are you planning on moving or selling soon?  I would expect a loan with costs to be the better option in the long run.  If you don't understand why you need to do some research on cost/ benefit analysis for mortgages.  And if you are selling soon maybe you should consider an ARM. 
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October 09 2009
????? What?

A no cost loan means the lender is paying at least $1,800 of your broker and title fees which is one and a half yield spread so any profit income to the broker is yield spread above that which rate is 5.25 or higher today.

A no cost loan means ALL closing costs are paid from premium.  
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October 09 2009
Best to apply and wait for a rate lock that will fit your needs. currently no cost for that loan size is little slim but someone may consider it. you will need to pay your escrows and per diem which will be compentsated by a refund from your current lender of escrow balance and skipping a payment. A no cost loan means the lender is paying at least $1,800 of your broker and title fees which is one and a half yield spread so any profit income to the broker is yield spread above that which rate is 5.25 or higher today.
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October 09 2009
Your loan amount is too small to get a no cc loan at 5.125%. You should be able to get a no origination fee / no lender fee loan at that rate.  
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October 09 2009
 
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