• Page :
  • 1
  • Text Only
Voting History
rated:
In researching some refinance options, I came across some opinions that banks will lower the rate on your existing loan to keep your business and then you can avoid the refi process. It sounds reasonable that they would do it, but real world practices are not always rooted in common sense.

So before I call some random person at the bank, I'm wondering if anyone has done this successfully and how they attacked it. Do banks really care about keeping the business? Obviously it will be YMMV to an extent.

Bank is BB&T, mortgage has been there for a few years on a 30 year note, payments have all been on time, and it isn't a jumbo. Last I checked, credit score was over 800. Loan isn't underwater and I'm not looking to cash anything out. A regular refi should go just fine, I'm just trying to pick the cheapest/quickest option. Based on current rates, I'd be looking for a 1-1.25% reduction.

Also, would this show up on a report as a "modification" with a potentially negative effect?

Member Summary
Most Recent Posts
Hello,
I am planning to refinance with provident.com. Does anyone have experience with them? How long does it take for ... (more)

ramamosn (Apr. 11, 2013 @ 7:07a) |

Bad advice. You can refi with 10% equity and either pay PMI or get lpmi (lender paid mortgage insurance) for a slight r... (more)

tadr (Apr. 11, 2013 @ 8:27a) |

Yes, this is true. I wound up refinancing with Cashcall.com and they were able to give me a good rate at less than 3% eq... (more)

markbyte (Apr. 11, 2013 @ 9:58p) |

  • Also categorized in:

Before the crisis many lenders would do a rate modification , usually for a $500-1000 fee. ING, citi etc.

I know penfed still does them . Ask your bank

While they never did negatively report in the past, Note that yes they sometimes do now report negatively on bureau reports . While this is to be expected with a hardship losn modification, its unnerving Especially the unsolicited ones people are getting packets in the mail

Navy Federal modified my 2nd mortgage for $300, lowering my interest rate from 7 to 4.84% and reamortizing my payments. I have never been late on my payments and my credit scores are 777-790. The rep claimed it would not be reported negatively, but the modification is too recent for me to know if that is true.

I also asked them to modify my first mortgage and they said they would not be able to. Therefore I am refinancing the first.

My approach was to call their mortgage phone number and simply ask them to do it. The first representative I spoke to was confused about the requirements so I called and spoke to someone else.

Is there a certain timeframe where refinancing doesn't make sense? I've had my mortgage for a little over 5 years, and want to refinance since new interest rates are about half of what I currently have. I figure there is some point in the life of a mortgage where it wouldn't make sense to refinance and start your 30-year term over, but only 5-1/2 years in should be OK, right?

An easy way to do it is get a no cost refi. If its even 0.25% cheaper it makes sense .

The loan term
Is extended back to 30 years on a refi , but you can completely reverse that by paying the exact same amount you are currently paying to the mortgage as an extra principal payment

The new loan will be paid off faster than your current loan if you make the exact same payment, due to the Lower interest rate

Or see if you can get a lower rate for a shorter loan term. Some lenders have lengths in 5-year increments, others will let you choose the exact number of years. Check the rates, of course, to make sure you are actually getting a good value.

roxygirlie1021 said:   Is there a certain timeframe where refinancing doesn't make sense? I've had my mortgage for a little over 5 years, and want to refinance since new interest rates are about half of what I currently have. I figure there is some point in the life of a mortgage where it wouldn't make sense to refinance and start your 30-year term over, but only 5-1/2 years in should be OK, right?

I believe many lenders have unadvertised 25 year and even 20 year mortgages which are usually the same rate as a 30. Quicken Loans confirmed this when I asked about it during my refi a few months ago. It would be nice if the 20 year rate was closer to the 15 year rate but it was not, I believe Quicken Loans quoted me the same rate for 30, 25 and 20.

roxygirlie1021 said:   Is there a certain timeframe where refinancing doesn't make sense?As long as you are getting a better rate, no. Lower your rate, extend the contractual term on your loan, and pay it at any (faster) rate that you please.

Obligatory link to the "Do you pay extra?" thread.

acroBios said:   I believe many lenders have unadvertised 25 year and even 20 year mortgages which are usually the same rate as a 30.Why would anyone take one of these loans?

From what I understand credit unions can do modifcations more easily. I'm with a small local credit union and have changed mine 2 times in the last 3 years. Changing the % the first time and the term and % the second time. It cost $650, no appraisal. I was told I could do one every 6 months if I liked. It's been a little over a year since the last one and I might go one more time on the % if they drop the 15 year down to 2.875%, right now they offer 3% and I'm sitting at 3.375% on a 15 year note. Below is how I dropped mine.

30 year note 6.375% (bought in 2008 right before bottom dropped)>refi'ed to 20 year at 5.125% a year later (2009) (cost $1200, plus appraisal)>did a loan modifcation to drop rate to 4.125% (2010) (cost $650)>did a loan modificationt to drop term to 15 year and rate to 3.375% (2011) (cost $650).

I refinanced with my credit union (NWFCU) in 2009. Original mortgage was also with NWFCU. The process was relatively inexpensive compared to what other lenders were offering, but I still had to go the entire process, including appraisal and title insurance. They waived/credited most of their fees (which were generally low to begin with), so it cost me probably around $600 for everything but it wasn't really any simpler than through a different lender. I also got bonus points to my credit card for the "new" loan, think it was 10,000 points, so ~$100 back from that.

You should also check Cashcall and Bankrate to see what kind of rate you can get on a no-cost refi...

SUCKISSTAPLES said:   An easy way to do it is get a no cost refi. If its even 0.25% cheaper it makes sense .

The loan term
Is extended back to 30 years on a refi , but you can completely reverse that by paying the exact same amount you are currently paying to the mortgage as an extra principal payment

The new loan will be paid off faster than your current loan if you make the exact same payment, due to the Lower interest rate


I tend to believe that this SIS's advice is very sound, particularly if you have a conventional loan.

If you're paying an FHA loan that includes PMI, this discussion points out some of the things that have changed.

I only mentioned this, as I fall into this category, and though the lower interest rates are tempting, the math works a little differently in my case (purchased during the '09 the-sky-is-falling economic downturn, and 20% down wasnt where I wanted to spend my liquid assets)

Go with Provident.com. I have refinanced with Provident few months ago. The best experience!
Today rates are for 30 or 25 years: 3.25%, 0 points
or go with 3.375% and pay close to Zero refinance

Years ago,ING direct modified my loan and lowered the rate from about 6.0 to 4.5. But they won't do it again because my house is currently underwater.Penfed meanwhile won't modify my HELOC for any reason besides actually qualifying for refinance.

BOA refused to lower my rate, so I refi'd with Penfed into their 5/5 ARM. Cut my rate in half.

I've refinanced on my ING 7/1 ARM 3 times in the past 6 years bringing my rate down from somewhere around 6.5% to 3.375%.

I believe the first time or two they charged me a like $700 or $800 and the last time I did it they charged me the equivalent of one month's payment.
Each time it lowered my monthly payments ~$150-200 so it was something like 7-10 months to make up the difference in payment.
I figured as long as I would be staying at least as long to make up the payment it was worth it.

I just checked again and I can go down to 3% - but will take almost a year to recoup (as it will lower my payment only about $75-85) - and I plan on being out by then.

The process was super easy each time - just a phone call - and I have never seen anything about it show up on my credit report.

Oh BTW - every time I did this it also extended the 7 years on the rate (but not the term length of the mortgage). So since I last did it about a year ago I still have another 7 years of the 3.375% before it adjusts.
Technically that may work out for the worse if rates drop really low - but I could always just readjust again (If I actually planned to be here that long).

FW veteran, refiance noob question: Does a refi negatively impact my credit?

My question is this, don't you still have to have 20% down? That's my problem. I bought my house 6 years ago. My first mortgage is with BOA at 6%. My second mortgage is with CitiMortgage for 7.5%. I am not underwater but due to the drop in home prices I only have about 3% equity. I have a high credit rating though. Every ad I see says it's assuming 20% down.

BenH said:   I've refinanced on my ING 7/1 ARM 3 times in the past 6 years bringing my rate down from somewhere around 6.5% to 3.375%.

I believe the first time or two they charged me a like $700 or $800 and the last time I did it they charged me the equivalent of one month's payment.
Each time it lowered my monthly payments ~$150-200 so it was something like 7-10 months to make up the difference in payment.
I figured as long as I would be staying at least as long to make up the payment it was worth it.

I just checked again and I can go down to 3% - but will take almost a year to recoup (as it will lower my payment only about $75-85) - and I plan on being out by then.

The process was super easy each time - just a phone call - and I have never seen anything about it show up on my credit report.

Oh BTW - every time I did this it also extended the 7 years on the rate (but not the term length of the mortgage). So since I last did it about a year ago I still have another 7 years of the 3.375% before it adjusts.
Technically that may work out for the worse if rates drop really low - but I could always just readjust again (If I actually planned to be here that long).


If you did it a year ago, you have 6 years left .

ING initially charged me $500. The next time it was $750. Then it was a mortgage payment. I went from 6% on 9/1/07 to 5.25% on 6/1/08 to 4.5% on 6/1/09 to 2.75% on 11/1/11. Mine is a 5/1, which therefore means my rate won't adjust until 11/1/16. Also note that during one of the "Rate Renewals" as they call them, they adjusted the index they work off to add a bigger increase to it. During the process they also said I was below the level of acceptable equity, but then later the value of the home went up so no issue.

Now that they are owned by Capital One I expect the uniqueness of their entire business model to change. When I buy again, or need to refi, I will likely look at companies like PenFed.

markbyte said:   My question is this, don't you still have to have 20% down? That's my problem. I bought my house 6 years ago. My first mortgage is with BOA at 6%. My second mortgage is with CitiMortgage for 7.5%. I am not underwater but due to the drop in home prices I only have about 3% equity. I have a high credit rating though. Every ad I see says it's assuming 20% down.

Yes. So you can't refi, you can try for a rate modification.

LAwoodtiger said:   FW veteran, refiance noob question: Does a refi negatively impact my credit?

No. If you do it with the same bank, nothing happens. If you refi with another bank, it pays off your loan and a new one is created.

Everyone has a different approach. choose one best suits you and you feel comfortable.
My loan with WF was at 4.375% which i started 7/2011. Last year i checked and the rates were lower so i tried and no one would give a good reply which i feel comfortable but in the process i learned thier terminology and how they get you.
After i got a few comfortable looking quotes i called my lender WF and asked for first refusal. they kind of did but the guy also said that they are not allowed to work on lower rate but hooked me up with another vendor who would and that they are the secondary channel for them and sell the loans back to WF after they get it.
For the sake of it i will mention i started with Bankrate and lending tree. Also tried offers coming from pageonce and mint.
Lending tree i must say led me to discover home loans. thats who i went with finally. I have FHA 30yr. I asked for FHA and Conventional.
We started with 3.25% FHA and i asked for appraisal for an extra $400. Discover helped me through the process and the appraisal came in favirable and i pressed them for conventional and they offered 3.5% conventional.
Discover had the appraisal rewritten for conventional and i got 3.5% conventional.
I offered to pay some cash upfront equal to one month payment($2200) and finance all other costs into the new loan.
After final paperwork i ended up getting $1300 back from the loan and the final amount increasing by about $10000.
Some of the termininology i learned.
No cost mortgage- i pay all the closing costs that may range from about $8000 to $13000.
fixed cost - you pay some fixed amount like $500 or $1000 and all other costs are absorbed into the new loan.
true zero cost - zero payment - everything is aborbed into the loan. (this is what i was asking for)
i was trying to get the zero payment loan as i would not have any extra $$ lying around to finance the loan an i kept getting a run around with different kind of number and when i ask for the written reply they would either deny it or the number would not match what we discussed.
Long story short WF was willing to do it with a diffrent vendor involved and i finally got it from Discover and they sold it to WF within 15 days of closing.
So i am back with WF at a lower rate. My new loan amount has increased but i also got some Cash Back which i did not ask for and i intent to pay atleast 1 extra payment a year.
Good Luck in your hunting.

What is WF?

Wells Fargo

dcwilbur said:   Wells Fargo

TY

markbyte said:   What is WF?
Wells Fargo

As usual PenFed has very competitive 5/5 arm rates with closing costs paid. This isn't ideal for anyone planning to to stay in their house a minimum of 15 years. It's perfect for anyone that might sell their house in the next 5-10 years. We are currently refinancing from a 30 year rate to this. (Currently 2.75%. We locked in a 2.5% Rate by offering to pay .375% in points, which if I recall correctly pays for itself in less than 36 months. - And if we are still here in 5 years, they can at most raise rate to 4.5%. - This paydown varies significantly almost daily. Today's rate buy down is back to .375% same as when I locked, but it frequently changes between .5% and .75% - Not worth paying down at this rate in my opinion.)


I would suggest a 15 year rate to someone that can afford. (i.e. Could you survive a job loss with these higher payments? We could because we are dual income in a low cost of living area.)



- Roxygirl, Yes SIS is correct that any deduction with no closing costs is a benefit. However, I would suggest assigning percentages to how likely you are to stay there 5, 10, 20, and 30 years. If only a few years seems likely, I would recommend PenFed's 5/5 arm. If you plan to stay 15-30 more years I would suggest a 15 or 30 year competitive rate that you pay closing costs.*

* I realize many FW members are against paying closing costs. However Roxygirl seems like someone that will not be refinancing often. in that case it's probably beneficial to get a better rate.

My bank, JPMorgan Chase has held my mortgage for the last 10 years and just did a refi at absolutely no charge to me from 6% down to 4.25%. I could have gotten lower if I found my own source; however, I then would have been paying at least $2,000 and up for closing costs. Good luck!

bhavin66 said:   


After final paperwork i ended up getting $1300 back from the loan and the final amount increasing by about $10000.
Some of the termininology i learned.
No cost mortgage- i pay all the closing costs that may range from about $8000 to $13000.
fixed cost - you pay some fixed amount like $500 or $1000 and all other costs are absorbed into the new loan.
true zero cost - zero payment - everything is aborbed into the loan. (this is what i was asking for)
i was trying to get the zero payment loan as i would not have any extra $$ lying around to finance the loan an i kept getting a run around with different kind of number and when i ask for the written reply they would either deny it or the number would not match what we discussed.
Long story short WF was willing to do it with a diffrent vendor involved and i finally got it from Discover and they sold it to WF within 15 days of closing.
So i am back with WF at a lower rate. My new loan amount has increased but i also got some Cash Back which i did not ask for and i intent to pay atleast 1 extra payment a year.
Good Luck in your hunting.


No offense but you got royally screwed adding $10000 to your principal amount

Also you are still incorrect on terminology . You did not get a no closing cost loan . You had the closing costs "rolled into" the loan

The obvious disadvantage of this is if you refi frequently, as many people here do , you keep increasing your principal Balance each time

SUCKISSTAPLES said:   bhavin66 said:   


After final paperwork i ended up getting $1300 back from the loan and the final amount increasing by about $10000.
Some of the termininology i learned.
No cost mortgage- i pay all the closing costs that may range from about $8000 to $13000.
fixed cost - you pay some fixed amount like $500 or $1000 and all other costs are absorbed into the new loan.
true zero cost - zero payment - everything is aborbed into the loan. (this is what i was asking for)
i was trying to get the zero payment loan as i would not have any extra $$ lying around to finance the loan an i kept getting a run around with different kind of number and when i ask for the written reply they would either deny it or the number would not match what we discussed.
Long story short WF was willing to do it with a diffrent vendor involved and i finally got it from Discover and they sold it to WF within 15 days of closing.
So i am back with WF at a lower rate. My new loan amount has increased but i also got some Cash Back which i did not ask for and i intent to pay atleast 1 extra payment a year.
Good Luck in your hunting.


No offense but you got royally screwed adding $10000 to your principal amount

Also you are still incorrect on terminology . You did not get a no closing cost loan . You had the closing costs "rolled into" the loan

The obvious disadvantage of this is if you refi frequently, as many people here do , you keep increasing your principal Balance each time


Not necessarily. It depends on what his loan amount is.
My monthly interest on my primary residence is $4,854 @ 3.625%. Prior to this rate, I was @ 6.625% 7/1ARM. It would only take about 3months for him to pay back the initial 10k

EDIT: Just read his OP. FHA loan so yes he did get roally screwed with that 10k.

Thanks for the responses folks. Going to call BB&T on monday. Found out my MIL did it successfully with Chase. So we'll see.

The NWFCU info was interesting, since that is my main bank.

How did you phone call go OP?

Because of your thread i did the same with Wells Fargo and asked them if i qualified for a no cost refi. This would bring my rate down from 4% to 3.75% at a cost savings of $40/month. I did not go forward because i cannot guarantee that my loan will be <80% of the home's value.

My position is that i owe 200k currently and about 9 months into my mortgage. My place got appraised for 240k when i first started the loan and similar units are selling for >250k on the market. There are very few units being sold in my area also, zip code 20024; 622sqft.
The reason i did not go forward with the refi is that PMI was paid upfront when i put 10% down. Given my situation, would it be wise to go forward and risk paying pmi if I pay down my Apr to 3.25%?

roxygirlie1021 said:   Is there a certain timeframe where refinancing doesn't make sense? I've had my mortgage for a little over 5 years, and want to refinance since new interest rates are about half of what I currently have. I figure there is some point in the life of a mortgage where it wouldn't make sense to refinance and start your 30-year term over, but only 5-1/2 years in should be OK, right?

If it has been 5 years since your current mortgage was signed, then going to a 20 year will lower the payoff by five years with about the same payment.

If you go with a 15 year loan, you will pay a little more, but lower you payoff by 10 years.

Sorry, forgot to update. BB&T wouldn't budge on it. Acted like they were doing a favor offering a standard refi that cost more than our other option.

Hello,
I am planning to refinance with provident.com. Does anyone have experience with them? How long does it take for closing?

Thanks.

EradicateSpam said:   markbyte said:   My question is this, don't you still have to have 20% down? That's my problem. I bought my house 6 years ago. My first mortgage is with BOA at 6%. My second mortgage is with CitiMortgage for 7.5%. I am not underwater but due to the drop in home prices I only have about 3% equity. I have a high credit rating though. Every ad I see says it's assuming 20% down.

Yes. So you can't refi, you can try for a rate modification.


Bad advice. You can refi with 10% equity and either pay PMI or get lpmi (lender paid mortgage insurance) for a slight rate increase. I recently refinanced out of a 3% down FHA loan with PMI to a conventional loan with 10% equity and lpmi after some renovations. Between PMI and the reduced rate we are saving $800/month

tadr said:   EradicateSpam said:   markbyte said:   My question is this, don't you still have to have 20% down? That's my problem. I bought my house 6 years ago. My first mortgage is with BOA at 6%. My second mortgage is with CitiMortgage for 7.5%. I am not underwater but due to the drop in home prices I only have about 3% equity. I have a high credit rating though. Every ad I see says it's assuming 20% down.

Yes. So you can't refi, you can try for a rate modification.


Bad advice. You can refi with 10% equity and either pay PMI or get lpmi (lender paid mortgage insurance) for a slight rate increase. I recently refinanced out of a 3% down FHA loan with PMI to a conventional loan with 10% equity and lpmi after some renovations. Between PMI and the reduced rate we are saving $800/month


Yes, this is true. I wound up refinancing with Cashcall.com and they were able to give me a good rate at less than 3% equity. I'm doing a 15 yr mortgage with lender-paid pmi, and zero closing costs, for 3.5% interest.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014