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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Refinancing options WWYD
Wells Fargo has a 3-step program that basically lets you refinancing with no closing costs. However, the rate is higher than you would get if you paid closing.
If you had the choice, would you refinance with at NO COST at 5.875%
or paid closing costs of about $12K and get a rate of 5.375%
??
Pros/Cons Please!
Obviously $12K is a lot, and we don't really want to use up funds right now with #2 on the way - but I don't want to make a hasty decision.
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Posted 5/22/09 2:07 PM  |
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Long Island Weddings
Long Island's Largest Bridal Resource | Prudential Douglas Elliman Real Estate |
Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Refinancing options WWYD
Does Wells hold your mortgage? Also, are you in NY?
Message edited 5/22/2009 2:32:57 PM.
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| Posted 5/22/09 2:32 PM |
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Elbee
Zanzibar
Member since 5/05 10767 total posts
Name:
Me
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Re: Refinancing options WWYD
Can you choose the "no cost" AND buy a point. That would give the same interest rate at a fraction of the cost.
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| Posted 5/22/09 2:33 PM |
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yelley
Fortunate
Member since 11/07 3037 total posts
Name:
Danielle
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Re: Refinancing options WWYD
Can you tell us what the difference is between the monthly payments?
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| Posted 5/22/09 2:34 PM |
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MrsH
LIF Adolescent
Member since 3/07 766 total posts
Name:
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Re: Refinancing options WWYD
we are refinancing with wells and the closing costs are no where near 12K, that seems really high for a refi. if thats the closing costs, then i would do the higher rate with no closing costs, or look to another bank maybe??
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| Posted 5/22/09 7:24 PM |
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Re: Refinancing options WWYD
Posted by MrsH
we are refinancing with wells and the closing costs are no where near 12K, that seems really high for a refi. if thats the closing costs, then i would do the higher rate with no closing costs, or look to another bank maybe??
Same with us. That interest rate sounds high too.
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| Posted 5/22/09 8:08 PM |
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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Re: Refinancing options WWYD
Posted by Blu-ize
Does Wells hold your mortgage? Also, are you in NY?
Yes and yes.
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| Posted 5/22/09 8:59 PM |
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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Re: Refinancing options WWYD
Posted by Elbee
Can you choose the "no cost" AND buy a point. That would give the same interest rate at a fraction of the cost.
No, you can't do that with this program.
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| Posted 5/22/09 9:00 PM |
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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Re: Refinancing options WWYD
Posted by MrsH
we are refinancing with wells and the closing costs are no where near 12K, that seems really high for a refi. if thats the closing costs, then i would do the higher rate with no closing costs, or look to another bank maybe??
It's higher b/c we are also pulling $$ out to do a dormer on the house - so we're refinancing for more than we originally financed when we bought.
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| Posted 5/22/09 9:02 PM |
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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Re: Refinancing options WWYD
Posted by yelley77
Can you tell us what the difference is between the monthly payments?
It would be about $220 more a month to do the no closing option (again this is to pull out a big chunk too for a dormer).
If we paid the closing costs, our mortgage would be about $4 less than it is now.
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| Posted 5/22/09 9:03 PM |
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Leeners
:)
Member since 5/05 4898 total posts
Name:
Eileen
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Re: Refinancing options WWYD
As long as the $12k doesn't eat up more than half of your savings I'd go with paying closing costs. You'll basically be getting a dormer for $12k with that option and pay far less in the end for the house b/c of half percent interest. That and $225 a month (the differential, right?) will come in very handy for diapers, et al while you're not working 
ETA: as long as you plan to be in the house for another 4+ years, you'll make the $12k back in the extra savings per month in 4.4 years. Any time you stay after that, you'll be making $.
Message edited 5/22/2009 10:11:45 PM.
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| Posted 5/22/09 10:10 PM |
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cutie
LIF Adult
Member since 2/06 1893 total posts
Name:
Janine
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Re: Refinancing options WWYD
Posted by SweetCaroline
Posted by MrsH
we are refinancing with wells and the closing costs are no where near 12K, that seems really high for a refi. if thats the closing costs, then i would do the higher rate with no closing costs, or look to another bank maybe??
It's higher b/c we are also pulling $$ out to do a dormer on the house - so we're refinancing for more than we originally financed when we bought.
Are you planning on taking out a jumbo loan? That would definitely make the rate higher.
We are looking into using a credit union to refinance (we are also currently with Wells) and their rates for a standard fixed rate are lower. They did mention however that it would be about 3 points for closing costs.
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| Posted 5/22/09 10:35 PM |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: Refinancing options WWYD
Posted by architectnycity
Posted by MrsH
we are refinancing with wells and the closing costs are no where near 12K, that seems really high for a refi. if thats the closing costs, then i would do the higher rate with no closing costs, or look to another bank maybe??
Same with us. That interest rate sounds high too.
ITA!!! I just locked in at 5% w/my current company Bank of America.
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| Posted 5/22/09 10:38 PM |
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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Re: Refinancing options WWYD
Posted by jellybean1420
Same with us. That interest rate sounds high too.
ITA!!! I just locked in at 5% w/my current company Bank of America.
But are you paying closing costs?
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| Posted 5/22/09 10:56 PM |
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Rycois
Blessed with 2blue/2pink
Member since 12/05 13341 total posts
Name:
J
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Re: Refinancing options WWYD
Posted by cutie
Are you planning on taking out a jumbo loan? That would definitely make the rate higher.
We are looking into using a credit union to refinance (we are also currently with Wells) and their rates for a standard fixed rate are lower. They did mention however that it would be about 3 points for closing costs.
Not taking a Jumbo - not sure what that is 
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| Posted 5/22/09 10:57 PM |
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LulaBell
:)
Member since 1/06 3508 total posts
Name:
J
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Re: Refinancing options WWYD
That rate seems high to me also, but we are refinancing and not pulling out any money. We locked in at 4.75, and are paying minimal closing costs (around 5K). Chase is our bank.
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| Posted 5/23/09 6:19 AM |
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Lucky09
2017!
Member since 1/06 7537 total posts
Name:
DW
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Re: Refinancing options WWYD
Posted by Leeners
As long as the $12k doesn't eat up more than half of your savings I'd go with paying closing costs. You'll basically be getting a dormer for $12k with that option and pay far less in the end for the house b/c of half percent interest. That and $225 a month (the differential, right?) will come in very handy for diapers, et al while you're not working
ETA: as long as you plan to be in the house for another 4+ years, you'll make the $12k back in the extra savings per month in 4.4 years. Any time you stay after that, you'll be making $.
Exactly... You need to look at the breakeven point and whether you'll be in the house long enough to see it. Since you are dormering, it sounds like you will be, so I'd say pay the $12k up front and save the $225/month!
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| Posted 5/23/09 7:43 AM |
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Re: Refinancing options WWYD
With Wells they have non-conforming loans which is anything over $417K and what ever the Jumbo amount is. If you loan amount is less than $417K then it is considered a conventionally loan. This is how it was explained to me when I called since I have Wells also. I fall into this category and those were the rates I was getting.
I really want to re-fi to lower our rate (currently 6.375%) but I don't think our house will appraise for what we bought it for 2 years ago (this is what basically has to happened, again what I was told by the loan officer) And to think I felt like we got a deal on the house.
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| Posted 5/23/09 7:56 AM |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: Refinancing options WWYD
Posted by SweetCaroline
Posted by jellybean1420
Same with us. That interest rate sounds high too.
ITA!!! I just locked in at 5% w/my current company Bank of America.
But are you paying closing costs?
Yes, but only 1/4 of what you are paying and we have a bigger loan too, around $400k.
Are you changing mortgage companys? I am not so I do not need a new appraisal, I am not escrowing taxes and insurance, not paying a transfer tax, etc. Therefore my closing costs are very low.
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| Posted 5/23/09 8:17 AM |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: Refinancing options WWYD
Posted by JerseyMamaOf2
I really want to re-fi to lower our rate (currently 6.375%) but I don't think our house will appraise for what we bought it for 2 years ago (this is what basically has to happened, again what I was told by the loan officer) And to think I felt like we got a deal on the house.
Call your mortgage company about the Home Affordable Re-fi program. That's what I did. There is a misconception about the program. YOu have to have a Freddie Mac or Fannie Mae owned loan. It is for homebuyers in good standing with good credit who cannot re-fi the "old" way b/c their home value has dropped, etc. They do not do a new appraisal with this program.
My rate is 5% for the life of the loan (it is the mod program where you rate changes after a few years).
The only thing is under this program you can only roll in $2,500 of your closing costs into your mortgage (in regular re-fi's you can roll them all in but there is usually most cost).
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| Posted 5/23/09 8:21 AM |
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csorisi
My 2 LOVES
Member since 11/05 1984 total posts
Name:
Corinne
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Re: Refinancing options WWYD
Posted by jellybean1420
Posted by JerseyMamaOf2
I really want to re-fi to lower our rate (currently 6.375%) but I don't think our house will appraise for what we bought it for 2 years ago (this is what basically has to happened, again what I was told by the loan officer) And to think I felt like we got a deal on the house.
Call your mortgage company about the Home Affordable Re-fi program. That's what I did. There is a misconception about the program. YOu have to have a Freddie Mac or Fannie Mae owned loan. It is for homebuyers in good standing with good credit who cannot re-fi the "old" way b/c their home value has dropped, etc. They do not do a new appraisal with this program.
My rate is 5% for the life of the loan (it is the mod program where you rate changes after a few years).
The only thing is under this program you can only roll in $2,500 of your closing costs into your mortgage (in regular re-fi's you can roll them all in but there is usually most cost).
They don't get an appraisal but they do use a program that tells you what they can say your house is worth. In my case their system said my house was worth $385,000 when I know it can sell for more then that plus my mortgage is for more then that. If you bought in the height of the market you most likely cannot benefit from the program. I have tried to do it a few times. Bank of America said I could qualify under the program but only if I bought 4 POINTS and paid them $18,000 in closing costs (that was without paying mortgage tax or escrows) which made no sense to me so I am sticking with my higher rate for now.
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| Posted 5/23/09 9:53 AM |
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Kelly9904
Mommy to 2 amazing little boys
Member since 5/05 9306 total posts
Name:
Kelly
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Re: Refinancing options WWYD
Posted by MrsMadness
That rate seems high to me also, but we are refinancing and not pulling out any money. We locked in at 4.75, and are paying minimal closing costs (around 5K). Chase is our bank.
I agree the rate seems high, we just did a refi with the credit union and our rate is 4.875%
Our closing costs were low because we did not take more out than the balance of our existing loan. But either way I would shop around your rate and closing costs.
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| Posted 5/23/09 4:47 PM |
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Mommy2Boys
My Boys!!!!
Member since 6/06 14437 total posts
Name:
C
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Re: Refinancing options WWYD
Posted by csorisi
Posted by jellybean1420
Posted by JerseyMamaOf2
I really want to re-fi to lower our rate (currently 6.375%) but I don't think our house will appraise for what we bought it for 2 years ago (this is what basically has to happened, again what I was told by the loan officer) And to think I felt like we got a deal on the house.
Call your mortgage company about the Home Affordable Re-fi program. That's what I did. There is a misconception about the program. YOu have to have a Freddie Mac or Fannie Mae owned loan. It is for homebuyers in good standing with good credit who cannot re-fi the "old" way b/c their home value has dropped, etc. They do not do a new appraisal with this program.
My rate is 5% for the life of the loan (it is the mod program where you rate changes after a few years).
The only thing is under this program you can only roll in $2,500 of your closing costs into your mortgage (in regular re-fi's you can roll them all in but there is usually most cost).
They don't get an appraisal but they do use a program that tells you what they can say your house is worth. In my case their system said my house was worth $385,000 when I know it can sell for more then that plus my mortgage is for more then that. If you bought in the height of the market you most likely cannot benefit from the program. I have tried to do it a few times. Bank of America said I could qualify under the program but only if I bought 4 POINTS and paid them $18,000 in closing costs (that was without paying mortgage tax or escrows) which made no sense to me so I am sticking with my higher rate for now.
I bought my house in 2006, I guess you can say at the height of the market. Regardless if they use a program based on home sales in my area or have someone come out to do an actual appraisal, the value of my house has gone down. Even the Town of Hempstead (or I think all of Nassau County) did home reassessments for tax purposes and according to them my house is now worth almost $200k less than what I paid for it 3 yrs. ago. I live in Merrick by the way.
It doesnt really matter what the town or mortgage company tells you your house is worth (and alot of mortgage company figures are affected by home foreclosures and short sales). I can still try and sell my house for what I think it's worth. And if I want to sell my house, I would probably have to wait at least 4 or 5 yrs. before I would even break even the prices have gone down so much.
ETA: Rather than calling the 800 #, I would go to a local B of A office and speak to someone. The info. they told you sounds ridiculous...buying 4 points  Whenever I call the 800# I got someone in another state who doesnt have a clue about the market in our area.
Message edited 5/23/2009 5:19:24 PM.
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| Posted 5/23/09 5:08 PM |
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Lucky09
2017!
Member since 1/06 7537 total posts
Name:
DW
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Re: Refinancing options WWYD
Posted by jellybean1420
Posted by JerseyMamaOf2
I really want to re-fi to lower our rate (currently 6.375%) but I don't think our house will appraise for what we bought it for 2 years ago (this is what basically has to happened, again what I was told by the loan officer) And to think I felt like we got a deal on the house.
Call your mortgage company about the Home Affordable Re-fi program. That's what I did. There is a misconception about the program. YOu have to have a Freddie Mac or Fannie Mae owned loan. It is for homebuyers in good standing with good credit who cannot re-fi the "old" way b/c their home value has dropped, etc. They do not do a new appraisal with this program.
My rate is 5% for the life of the loan (it is the mod program where you rate changes after a few years).
The only thing is under this program you can only roll in $2,500 of your closing costs into your mortgage (in regular re-fi's you can roll them all in but there is usually most cost).
Yes - I am doing the same exact thing with my Re-Fi... through GMAC though. We locked in at 4.875 and our closing costs will be approximately $6300. (We are buying points and rolling the $2500 into the loan so we only have to go to closing with $3800).
Message edited 5/23/2009 5:50:30 PM.
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| Posted 5/23/09 5:47 PM |
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