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Replies (14)
You will need to get an updated GFE as the rate quoted most likely is no longer in effect. Other than that, my only question is why is at least 2 or 3 months property taxes not included in the reserves required by lender (item 1001)? For FHA loans, property taxes and property insurance must be escrowed. Other than that, and assuming it's an accurate GFE that the lender will stand behind, it looks good.
- Dave Skow, "daveskow"
- Contributions:1106
1) rates have increased a lot since 5/26...so you will need to ask for an update
2) line 1001 is for the prepaid homeowners insurance line ( not the taxes )..these are required
3) processing fee seems high
4) the rate you are receiving is for a " high balance " FHA loan ...here in king county , FHA has two delinations .....loan amts under 417K and loan amounts between 417K and 567,500
5) if property appraises for 540K ( as you mention) your loan to value will be too high for a FHA loan ....for a loan amt in the range this gfe has , value will need to be in the 555K...560K range as ltv on a refi for high balance FHA needs to be 95% or less ( I could be slightly wrong on this )
thanks
2) line 1001 is for the prepaid homeowners insurance line ( not the taxes )..these are required
3) processing fee seems high
4) the rate you are receiving is for a " high balance " FHA loan ...here in king county , FHA has two delinations .....loan amts under 417K and loan amounts between 417K and 567,500
5) if property appraises for 540K ( as you mention) your loan to value will be too high for a FHA loan ....for a loan amt in the range this gfe has , value will need to be in the 555K...560K range as ltv on a refi for high balance FHA needs to be 95% or less ( I could be slightly wrong on this )
thanks
- Clay Branch, "Georgia Loans"
- Contributions:7839
The fees look typical to me and they are dead on marking which fees are calculated into the APR. They are showing 5 months of taxes, which could either be accurate or way off. Like the others suggest, get an updated quote to reflect current rate. When does your tax bill come out each year and do you get 1 bill/year or split billed with 2 payments? Also, if your anniversary date on your homeowners insurance is coming up, will need to add that too. Not sure about the LTV, thought the max was the same for reg or high balance.?
- n4te
- Contributions:10
Thanks for the advice guys. Sorry I took so long to reply. There has been a pretty significant change of plans and I didn't want to post before I had sufficient information.
You guys were right of course, I asked for an updated rate on June 3rd and it had gone up from 5.25 to 5.5. I asked again today and it is at ~5.8. Apparently it is estimated rates will continue to rise.
I had been dealing with Wells Fargo in early May. They were extremely unresponsive (super busy I guess). It seemed as if they were not interested in my refinance, so I went to a different lender and got the GFE I posted above. It turns out that Wells Fargo has locked a rate for me around May 20th, just before rates went up! They didn't freaking tell me until weeks later!
The lock is for 90 days at 4.5%, but that is with 1% origination and 2.58% discount. Annoying, because I didn't ask to pay discount points. They claim to be unable to quote a rate with no discount points until after we get an appraisal. Their "guess" with no discount is a 1% higher interest rate if not more. We are waiting on the appraiser to come look at the house.
...continued....
You guys were right of course, I asked for an updated rate on June 3rd and it had gone up from 5.25 to 5.5. I asked again today and it is at ~5.8. Apparently it is estimated rates will continue to rise.
I had been dealing with Wells Fargo in early May. They were extremely unresponsive (super busy I guess). It seemed as if they were not interested in my refinance, so I went to a different lender and got the GFE I posted above. It turns out that Wells Fargo has locked a rate for me around May 20th, just before rates went up! They didn't freaking tell me until weeks later!
The lock is for 90 days at 4.5%, but that is with 1% origination and 2.58% discount. Annoying, because I didn't ask to pay discount points. They claim to be unable to quote a rate with no discount points until after we get an appraisal. Their "guess" with no discount is a 1% higher interest rate if not more. We are waiting on the appraiser to come look at the house.
...continued....
- n4te
- Contributions:10
The question I have now is, should I pay the discount points? Assuming the house is appraised at 540k, I'll need to pay $13,932. Wells Fargo tells me I'll save $6k/year in payment reduction and $9k/year in interest savings for the first year and another $15k for the second year. If this is right, it seems that it may be worth it to pay the discount, no? I vaguely remember reading that a refinance should break even within a year or so. Is that a good rule of thumb?
I guess it really depends on what comes of the appraisal, so we can know what the rate would be with no discount and just the 1% origination. So far all we have to go on is it would be around 5.5 to 6.0.
If you guys have any advice, it would be greatly appreciated!
I guess it really depends on what comes of the appraisal, so we can know what the rate would be with no discount and just the 1% origination. So far all we have to go on is it would be around 5.5 to 6.0.
If you guys have any advice, it would be greatly appreciated!
- n4te
- Contributions:10
Wait a sec, the $6k/year and $9k/year they say I save in payments and interest is the difference between my current loan and the 4.5%, not the difference between paying discount and not doing so! So the break even is waaaay longer. If no discount gets me 5.5%, it would take 42 months. If no discount gets me 6.0% it would take 28 months. I think it should also be factored in that money today is worth more than money tomorrow. So it will take a bit longer than those numbers.
Even though we don't have any plans to move, it is kind of scary to drop basically all our savings into discount points.
Even though we don't have any plans to move, it is kind of scary to drop basically all our savings into discount points.
- n4te
- Contributions:10
Sorry for posting so many times in a row.
Do I have this right?
In 18 months at 5.5% the interest paid will be $46549.
In 18 months at 4.5% the interest paid will be $38009.
$8540 in interest is saved in 18 months.
$330 a month is saved using 4.5% instead of 5.5%.
$5940 in monthly payments is saved in 18 months.
$14480 is saved in 18 months. Would this be considered the break even point? Why don't the online calculators take interest saved into account when computing the break even point?
Do I have this right?
In 18 months at 5.5% the interest paid will be $46549.
In 18 months at 4.5% the interest paid will be $38009.
$8540 in interest is saved in 18 months.
$330 a month is saved using 4.5% instead of 5.5%.
$5940 in monthly payments is saved in 18 months.
$14480 is saved in 18 months. Would this be considered the break even point? Why don't the online calculators take interest saved into account when computing the break even point?
I can promise that the rate on the GFE is not available now. It is best to compare GFE estimates between lenders on the same day. Have them line up same taxes, insurance , title fees and number of days of interest to see clearly who has the best costs. generally speaking the better APR wins.
- n4te
- Contributions:10
Meg, the situation has changed since I started the thread. Please see my latest posts in the thread.
- Bob Steenrod, "rsteenrod"
- Contributions:4
There is no question that you will benefit from a refinance. Structuring it is another matter. With FHA, you will need to get updated number as that quote is too old. I would also stick with even or half percent increments (5, 5.5) as the pricing is better. Lastly you will have to make sure the second mortgage is over a year old, and if it is a line of credit, you haven't taken a draw on it in the last year.
If your current mortgage doesn't have mortgage insurance, you may be eligible for one of the new mortgage plans that allow you to refi without mortgage insurance even if the value is much lower than when you got the loan. If you qualify for that type of a plan, you may be able to eliminate the mortgage insurance that is required on FHA loans.
Good luck. Call if you would like some assistance.
[content removed by moderator for being self promotional]
If your current mortgage doesn't have mortgage insurance, you may be eligible for one of the new mortgage plans that allow you to refi without mortgage insurance even if the value is much lower than when you got the loan. If you qualify for that type of a plan, you may be able to eliminate the mortgage insurance that is required on FHA loans.
Good luck. Call if you would like some assistance.
[content removed by moderator for being self promotional]
- disabled site, "disabledsite"
- Contributions:83
Look at a short refi
- n4te
- Contributions:10
Well, I tried for an FHA through a broker. I paid ~$900 for 2 certified appraisals. They came in at $540k each. The lender noticed that we had finished our garage and asked for permits. I did the work without a permit. The lender then decided to change one of the appraisals to $475k, then denied the refi based on a bad LTV. :(
I owe ~$520k. If a new program allowed for 105% LTV, I would need it to appraise for ~$500k. In the next few months I will have about $20k to $30k. I could pay the loan down to ~$500k, in which case the house could appraise for as low as $475k.
That was a while ago. Now the house will probably appraise for a bit less? It is in Magnolia, in Seattle, WA.
I owe ~$520k. If a new program allowed for 105% LTV, I would need it to appraise for ~$500k. In the next few months I will have about $20k to $30k. I could pay the loan down to ~$500k, in which case the house could appraise for as low as $475k.
That was a while ago. Now the house will probably appraise for a bit less? It is in Magnolia, in Seattle, WA.
- DaveAndersson
- Contributions:268
How about doing some minor renovations and using an FHA 203k loan to finance up to 110% of the improved value of the home. You would need to do just $5k at a minimum of improvements. You may be able to get the permits for the garage and count those improvements. I know a great 203k lender for you to work with. Let me know if you need any assistance and I'll get you headed in the right direction.
refi using FHA, does GFE look good?
http://n4te.com/temp/gfe.pdf
The GFE was done 5/26 so I don't know if we can actually get this rate. Does everything else look in line?
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