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Profile picture for FaithHarp

Streamline Refinance: HELP

I am in the process of finalizing the terms of a streamline refinance. I will be going from a 7.2% interest rate to 4.875% with $822 out of pocket costs. Is this interest rate still too high? I was expecting it to be lower and I wasn't expecting to pay so much out of pocket. I owe 74,500 on a 79,900 loan with good credit. Thanks for your help.
  • January 24 2014 - Atlanta
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Answers (11)

Faith;  I think that your rate is a good one based on your loan amount.  Many of the responses to your question posted here are good ones.  the things to remember here are that your rate is based upon: Loan type (FHA, VA, Conventional) it sounds like this is a conventional loan.  We then move to the questions of: 1.) What is your credit score? This plays a huge part in determining rate -- you can't just look on the internet and see a blanket number like 4% and assume that this is the rate for all loans.  (Remember the French Model commercial?) Loan amount also plays a part in determining rate as does the amount that your home/ mortgage is under-water.  All in all I think that you have a very good rate and under market closing costs.

  • January 26 2014
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Is this for FHA or VA? If for FHA or VA, the rate is high. If you have found a lender that will complete a conventional loan streamline, then the rate is fair with current market 30 year term rates. The out of pocket cost shouldn't be necessary, however, I don't know all the details. For the loan size, $822 out of pocket seems on the high side. You will skip a payment so you will get some of your money back if you like to look at it that way. However, I don't consider skipping a payment or two a benefit. There's still interest being paid for.

  • January 26 2014
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Profile picture for XanderTeam
I think you are getting a good deal.  There are lots of factors that go into pricing a streamline refinance beyond the typical credit score and loan amount considerations.  To have a relatively low loan amount and to only have to bring ~$800 to the table, I think its a very good deal.

  • January 25 2014
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Your rate is fine. You are getting a lender credit back at closing to offset costs. Otherwise, you would be coming to closing with more money. Part of the costs are associated with insurance and taxes so you will get back a difference from current lender for your current escrow (taxes and insurace). You have no reason for concern.
  • January 25 2014
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National average for a conventional mortgage 30 year fixed is 4.625 so it is not that high..
  • January 24 2014
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Depends on the lender . Streamline refi's are usually portfolio loans which means the lender themselves holds the mortgage and does not sell it off to a larger bank like a Chase , Well's etc. They are usually set rates since they do not change daily like the normal rate sheets. We have three options for pricing on the streamline products best option is 4.75 for example. On that small of a loan amount the defference in monthly payment between 4.875 and 4.75 is going to be maybe $5 a month? I understand people want to rate shop and get crazy with gettign thelowest rate but when you actually see the A/B comparison in monthly payment difference it is very very small. You are getting a huge drop in rate as is now so I would stay were you are. It is not worth starting over in my opinion.

Good Luck!
  • January 24 2014
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Seems high to me.  Get a quote from Clay who posted below. 
  • January 24 2014
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Assuming this is an FHA no appraisal streamline, it is not out of line. Closing Costs and Prepaids can not be rolled into the loan amount to get to -0- due at Closing, your Lender credit ( for the 4.875 rate ) is offsetting the Closing Costs and maybe part of the prepaids. While $822 may be around $75 more than your full payment, it is close and the cash to close takes the place of the next payment you would have to make if not refinancing. Once you receive an escrow refund you will come out ahead from a cash flow standpoint. Is your estimated savings per month aprx $100 for this offer? Couple of things to consider, if your home will appraise for $78,500 or more then look at doing a Conforming loan since you have good credit, you will save more than the streamline can offer. If you do not have at least 5% equity or are upside down, then the streamline is the only option. FYI, If the original purchase price was less than $83,000 then the monthly mortgage insurance ( aprx $83/mo ) on the new loan will stay on for 30 years. 
  • January 24 2014
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Profile picture for JustinLeffew
Without knowing the full terms of the loan, it's hard to say. Are you paying any points? How much are they charging you for origination? How much will your loan balance be going up? A 4.875% with no points on a DU Refi or LP Open Access loan (HARP) is pretty good. If you are doing an FHA streamline or VA IRRRL, maybe shop around a bit. 
  • January 24 2014
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Profile picture for shapiroamg
Contact Clay:
http://www.zillow.com/profile/Georgia-Loans/

He is GA based and would be a good person to check on local rates.
  • January 24 2014
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Profile picture for GMerino

Your saying that you do have a good credit score, I would say that is a high rate! 

  • January 24 2014
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