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Refinance Good deal or bad?

Currently owe about $219,920.00 @ 5% interest rate.  Current Monthly mortgage is $1,228.00.  Mortgage is 2.5yrs.  It is a detach condo.  I do plan on living there for at least 5 years. I am trying to do a no cost loan, but depend on the appraisal i might have to make up the different cause my loan can't be more than 80% of the home value.  

Here is the Good Faith Estimate:
Your Initial loan amount: $224,000
Interest Rate: 3.625% (Could change since it is not lock) also depend what the appraisal price is
Monthly Payment: $1,021.55
Total Estimated Settlement Charges: $4,941.96

1. Origination charge: $5,365.00
2. Credit or charge (Points) for the specific interest rate chosen: -$4,699.52 @ 3.625%
Total Adjusted Origination Charges: $665.48
3. Required services that we select: Appraisal $475
4. Title services and lender's title insurance: $1,050.00
5. Government recording charges: $175.00
6. Initial deposit for your escrow account: $2,042.56
7. Daily Interest Charges: $22.2466 x 24 = $533.92
Total Charges for All Other Settlement Services: $4,276.48

Thanks in advance for the response.
  • July 14 2012 - Everett
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Answers (16)

Profile picture for user9695456
My house is detach. My credit score is around 780+.  
  • July 16 2012
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There is .75 worse in pricing between SFR and condos.  Sometimes it depends on if the property is detached or attached lender to lender.  2% origination isn't unusual but is on a higher end.  1% being lower end if there is no other broker fees such as processing or administration.  If others are offering above 4% interest, you do have the best deal on hand, however you could find a better deal giving the rate stays the same.  Please contact me if you are intereted. 

As for the renter, lenders will not use the rental income from a roomate for qulification purposes and will be calculated in debt to income ratio.  If your credit is good and DTI is in the range, you shouldn't have any issues with the approval process. 

  • July 16 2012
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There should not be an adjustment for detached condo. Only attached condo result in the adjustment.
  • July 15 2012
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Profile picture for Go Huskers
Your fees will go up .75% of the loan amount for a condo but everything else in the GFE should be the same. There is a pricing adjustment for the condo above 75% LTV. If your property appraises at 75% LTV or less there is no adjustment.

Pricing for the condo at 80% should still be at the rate you quoted with you just bringing the impounds and interest to close. 
  • July 15 2012
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Profile picture for user9695456
Is it true that lender are at a higher risk lending to someone with a detach condo than a single family home or does it not matter?  I got GFE for the single family home when the mortgage broker thought it was a single family home.  Origination charge was $5,304 and credit was $6.160 and everything else was about the same.  Then once the mortgage broker found that it was a detach condo the above GFE is what he give me.  I realize these are just estimate but i heard that GFE doesn't chnage much or not at all comparing to HUD final document.  Worst case i can walk away if I don;t like what I see.
  • July 15 2012
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Profile picture for user9695456
OK thanks.  These are just Good Faith Estimate. It all depend on how much my house is appraise for.  But in the meantime i will go ahead and ask why my origination charge is so high.  
  • July 15 2012
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Profile picture for Go Huskers
" Thank Go Huskers.  I might just pay out of pocket 4k to get my principal to stay the same so i don't have to pay interest on those.  "

You should not have to pay $4K out of pocket to refinance and get that rate. As pointed put, the origination fee may be a bit aggressive and if you found someone who did not charge that much, it would leave more of a credit for you. Don't be fooled into believing that there is not a direct correlation betweeen that credit and the origination that is charged. It may be true that they cannot change that fee, but you could certainly save a few bucks finding someone that had a different compensation plan. At most, you should be closing with funds for your new escrow account and the prepaid interest. You would not want to finance these items anyway since they are not actually closing costs. 

I'd urge you to get a second opinion. 
  • July 15 2012
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Profile picture for user9695456
Thank Go Huskers.  I might just pay out of pocket 4k to get my principal to stay the same so i don't have to pay interest on those.  
  • July 15 2012
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Profile picture for Go Huskers
You are not getting a no cost refi if your balance owed is $219,920 and your new loan amount will be $224,000.

At the rate you were quoted you should be able to refinance that loan amount without raising principal balance.
  • July 15 2012
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Fred does it matter that I get a credit which bring the origination charges to $665? Should I ask y the original charges are so high and y I am getting those credit? Thanks
  • July 15 2012
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Origination is insane.  Get an up front mortgage broker!  Google it.
  • July 15 2012
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I have a roommate that pay me rent every month.  Should i mention that to my Mortgage Broker?  Will it affect anything my refinancing?  Is it good or bad for me?  
  • July 15 2012
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Yes I am working with a mortgage broker that match me with the best lender.  I have gotten more than 3 GFE and this one seems to give me the best rate.  The other would give me no less than 4%.  
  • July 15 2012
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Depends on how you look at no cost loan.  It seems you are paying for third party closing cost and part of lender/broker origination fee.  Best thing to do is get 3 GFEs on same day from different lender and compare.   
  • July 15 2012
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Wouldn't it be worth it to have lower rate for the duration of the 30 years loan rather than taking a higher interest just to lower cost?  Overtime those interest rate will save me more than 2k.  I guess it depend on the interest rate.  I also have an offer for 3.875% i pay half the lender pay half (.567%) As of right now, the only way i would get the 3.625% is if my loan is 75% or less than the appraisal price which i don't think it is.  Thanks for responding. 
  • July 14 2012
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Profile picture for daveskow
3.625% 30 yr fixed  for apprx $2200  is OK ......but if you can take a higher rate for a lesser fee ...consider it  as you plan to be out of there within 5 yrs
  • July 14 2012
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