Should I try to refinance into an arm or IRRRL

brk_01
Contributions:2

I currently am in a 30 yr at %5 (VA loan). I had to refinance about 2+ yrs ago due to divorce. I now have the house up for sale, but I think it may take a while to sell (been on the market for 6 mos, and probably will continue unless I drop the price well below it's value). I've been getting a lot of correspondence for IRRRL's, for rates ~%3.75, some claiming no out of pocket closing costs. First, are those legit offers? 2nd, would it make sense to try to do a 5/1 arm instead? I could lower my payments significantly (currently paying 2 mortgages)... but would I lose anything I save on refinancing costs, especially if it does manage to sell w/in the next 6 mos?

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February 15 - US

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Answers (5)

Best Answer

Gordon Haraway, "1stTimebuySpecialist"
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Since your home is listed for sale you cannot refinance at this point. Your home must be off the market for at lest 6 months before you can refi. Besides the refi is going to cost you money and could take a year5 or more to recoup your cost so it probably doesn"t make sense anyway.

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February 15

Clay Branch, "Georgia Loans"
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brk, just so you know, you can do an Arm on the IRRRL. If you are talking to someone about a 3/1 Arm because you know you will sell way before the loan will start adjusting, also get pricing on a 5/1 since many lenders have better terms on the 5/1. You can get a no closing cost refi on an Arm too, while pricing is not as good today compared to yesterday you should still see a no closing cost loan in the low 3's today. You would not be able to combine the first and 2nd on an IRRRL but if the 2nd is small it wont have much impact anyway. You need to delist the property from the listing service before you apply.

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February 16

Norm D Plume, "America Needs Nixon!"
Contributions:1670

Since your home is listed for sale you cannot refinance at this point. Your home must be off the market for at lest 6 months before you can refi.
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incorrect statements. (best answer???)

For a rate/term refinance, such as an IRRRL, you simply have to take the house off the market, you can then apply the next day.

As Clay said, do a no cost refi, the lender can pay costs including the funding fee. Your loan amount will remain as it is now.

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February 15

Clay Branch, "Georgia Loans"
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Not all lenders require the home to be delisted for 6 months, if you are not getting cash out several lenders only require 1 day off the market. If your loan amount is over $200K and good credit there is no reason to pay closing costs. That is very different from " no out of pocket " which could mean no closing costs or it could mean $5K in closing costs were added into the new loan, those are very different. If you get a no closing cost loan there is no "recapture" period , you start saving from the first payment. Prepaids are different, that will include your new escrow so unless you pay that at closing it will be added into the new loan. Most of that expense, if not all, will be offset when you are reimbursed the existing escrow by your current lender. I think your best answer is way off base.As far as the Arm option goes, you can do it if you want.