1. Welcome Hearth.com Guests and Visitors - Please enjoy our forums!
    Hearth.com GOLD Sponsors who help bring the site content to you:
    Hearthstone Soapstone and Cast-Iron stoves( Wood, Gas or Pellet Stoves and Inserts)
    Caluwe - Passion for Fire and Water ( Pellet and Wood Hydronic and Space Heating)

Mortgage Refinance Appraisal

Post in 'DIY and General non-hearth advice' started by Cross Cut Saw, Mar 24, 2013.

  1. Cross Cut Saw

    Cross Cut Saw Feeling the Heat

    Joined:
    Mar 25, 2012
    Messages:
    399
    Loc:
    The City of Ships, Bath, Maine
    $166 + funding the escrow accounts!

    About $1700 for the property taxes and $400 for the insurance. These are held in escrow by the other lender though and will be refunded about 30 days after the closing.

    The closing and title fees come up to $856, and the Appraisal cost $405 but the lender is giving me a credit of $1095 towards the fees.

    It's a 5/1 ARM (fixed 5 years, adjusts annually after that, which isn't advisable unless you know you're moving) at 2.625%.

    Helpful Sponsor Ads!





  2. Highbeam

    Highbeam Minister of Fire

    Joined:
    Dec 28, 2006
    Messages:
    8,480
    Loc:
    base of Mt. Rainier on the wet side, WA
    An ARM!
    briansol likes this.
  3. basod

    basod Minister of Fire

    Joined:
    Sep 11, 2009
    Messages:
    937
    Loc:
    Mount Cheaha Alabama
    Sounds like a pretty good deal. I don't know if my current lender is intersted a refi like that, to keep my business as I should have the house paid off in a couple years
    When I was running the numbers @ 2.75 I was assuming 2-3k in closing which would still save me a ~2k with my current (self imposed) accelerated payments and set me in the same 2 yrs payoff window.

    Closing for $166??? I am truely amazed:) Good for you
  4. Cross Cut Saw

    Cross Cut Saw Feeling the Heat

    Joined:
    Mar 25, 2012
    Messages:
    399
    Loc:
    The City of Ships, Bath, Maine
    You no like my ARM?!?

    There's no way we're here more than 2 years and I needed to get cash out to pay for the deductible on knee surgery I need. Instead of ANOTHER line of credit I can use this to pay off my credit cards, pay for my insurance deductible, and put about $350 per month into my pocket with the lower mortgage and no credit card bills...
  5. basod

    basod Minister of Fire

    Joined:
    Sep 11, 2009
    Messages:
    937
    Loc:
    Mount Cheaha Alabama
    They get a bad rap because less than financialy intelligent people get into them.
    It's a bigger gamble on the new house purchase - but can be a wise option if you are moving or paying off early
    nate379 likes this.
  6. woodgeek

    woodgeek Minister of Fire

    Joined:
    Jan 27, 2008
    Messages:
    2,291
    Loc:
    SE PA
    Around here the transaction costs on a refi are ~0.8% of the loan size, when the dust settles, either out of your pocket or rolled into the loan. The brokers get more like 5x that amount from the bank as a finders fee. :eek: IOW, they work for the banks....the amount they charge you is to keep you from doing it too much.
  7. Cross Cut Saw

    Cross Cut Saw Feeling the Heat

    Joined:
    Mar 25, 2012
    Messages:
    399
    Loc:
    The City of Ships, Bath, Maine
    With today's rates even the WORST I could do would be comparable to what would have been considered decent to a little high 10 years ago.

    The absolute MOST it can adjust to over the entire 30 years is 7.625 percent, nothing I would want to do but I wouldn't lose my house over it.
  8. Swedishchef

    Swedishchef Minister of Fire

    Joined:
    Jan 17, 2010
    Messages:
    2,210
    Loc:
    Quebec, Canada
    Do you guys not have IRD in the US? IRD = Interest Rate Differentials. It prevents people from backing out of mrotgages continuously. It is a complex calculation based on how much you mortgaged, the rate you have, the discount from the posted rate and the rate you want to get.

    Only closing fees here are lawyer fees..$1000 or so for a mortgage.

    Andrew
  9. basod

    basod Minister of Fire

    Joined:
    Sep 11, 2009
    Messages:
    937
    Loc:
    Mount Cheaha Alabama
    Sounds like a French thing to me;)
    We have Title fees,notary fees (the lawyers) appraisal etc. The banks typically have original fees. Some lenders have one fee and not the other, I usually put them all in a spreadsheet side-side and run the numbers before picking one. Once had a local mortgage broker give me the run around for a $6500 closing cost and a worse rate...everybodys kids need new shoes
  10. Swedishchef

    Swedishchef Minister of Fire

    Joined:
    Jan 17, 2010
    Messages:
    2,210
    Loc:
    Quebec, Canada
    Lol...it's not a fremch thing, it is a Canadian thing, Eh?

    When refinancing (mortgaging a larger amount due to consolidation of debt or other expenses) you simply pay the notary fees. If you break your mortgage before its up, that is when you get into IRD or 3 months interest, whatever is larger.

    I am looking at renewing my mortgage...2.89 fixed for 5 years is what all the big 6 have offered me..sounds a lot less complicated than your ARM...lol
  11. midwestcoast

    midwestcoast Minister of Fire

    Joined:
    Oct 9, 2009
    Messages:
    1,564
    Loc:
    NW Indiana
    That's a heck of a deal right there! We just did a Loan Modification to 3.3% for a 20 year fixed. Total fees were $500. I figured I was saving a bunch on the closing fees & maybe taking a small hit on the rate. Maybe all I saved was the hassle of a full re-fi?
    Anyway we are still saving $ each month, knocked years off the term AND it was the easiest thing I've ever done so we're happy campers!
  12. Swedishchef

    Swedishchef Minister of Fire

    Joined:
    Jan 17, 2010
    Messages:
    2,210
    Loc:
    Quebec, Canada
    That is a great deal for 20 year fixed! 20 years is not popular in Canada...not many people go for more than 5. If they offered me that I would jump on it right away!!!
  13. arngnick

    arngnick Member

    Joined:
    Feb 15, 2013
    Messages:
    242
    Loc:
    Mansfield, PA
    Be nice and try not to stick your foot in your mouth just agree and and don't be pushy. Most are ok...some are a**holes...some have no clue and guess. Get things clean as possible make sure anything unsafe such as a cover off on an eletrical panel is taken care of and you should be fine.
  14. EatenByLimestone

    EatenByLimestone Minister of Fire

    Joined:
    Jul 12, 2006
    Messages:
    4,759
    Loc:
    Schenectady, NY
    I never would have asked a client for comps, but just to let you know, the house viewing is the easy part. I've spent hours in the back office on some properties with difficult layouts or unusual features.

    The appraiser wants to find the houses that are closest to yours that sold the most recently. As I said in a thread above, if he isn't local he might pick a house that appeared to match yours in a lower valued neighborhood. If it is within a mile or two there is a great chance that it would pass an underwriter. Now, if he picked 3 of those you might have undervalued your property.

    What type of loan other than FHA can you not get rid of mortgage insurance? The most I ever heard of a company needing was a new appraisal to prove you had 20% equity in the house. I've been out of the business for a while though.

    As far as expected closing costs, sign up on Lending Tree and you should have 3 quotes the next day or so. Now lending tree has a fee associated with every loan they close and that is a percentage of the loan amount. This should be disclosed in the paperwork though. What fees did the $3900 cover? Was there any escrow involved? Points? Origination fees? Depending on which day you close you will have a different amount of days of interest charged at closing. This isn't the fault of the lender. There are often fees associated with the title company you might have closed at. Different title companies have much different fee schedules and I'm guilty of choosing one in the past that charged a little more, but would quickly get the work done. This way I could get it through the underwriter faster and have you closing in fewer days.

    Matt
  15. basod

    basod Minister of Fire

    Joined:
    Sep 11, 2009
    Messages:
    937
    Loc:
    Mount Cheaha Alabama
    I can't remember all of the closing costs but i didn't pay points, deffinately an origination fee and escrow(would've been paid anyways) appraisal and titile fees, and interest between closing time - It was the best of the offers available from lending tree(along with local bank\brokers). I was in 40% equity area at the time and ran the numbers as if I would have paid the 3900 as extra principle on the original note I think the refi still saved ~24k and 3 years - (numbers are a little fuzzy it's been a few years).
    I will say the Lending tree process was fairly pain free - one direct line to one person handling your note and they come to your house for the dreaded paperwork process.

    Heres what i can find on the new FHA rules
    http://themortgagereports.com/12183...insurance-premiums-new-mip-cancelation-policy
    FHA MIP May Not Be Canceled After 5 Years, 78% LTV

    Returning to its pre-2001 policy, the FHA will no longer cancel FHA MIP once an insured mortgage reaches 78% loan-to-value (LTV). Instead, FHA mortgage insurance will last for the loan's full lifetime (which can be up to 30 years). The agency is making this change because roughly 12 percent of all FHA default claims occur on loans for which homeowners no longer pay MIP; and because home values are known to rise and fall. By collecting FHA MIP for the full 30 years of a loan, the agency can minimize future loss and more quickly recapitalize its reserve fund.
  16. jharkin

    jharkin Minister of Fire

    Joined:
    Oct 21, 2009
    Messages:
    3,132
    Loc:
    Holliston, MA USA
    Sounds like what we call a prepayment penalty here. Some loans have them, some/most do not. I've never had one.
  17. jharkin

    jharkin Minister of Fire

    Joined:
    Oct 21, 2009
    Messages:
    3,132
    Loc:
    Holliston, MA USA
    Back to bad appraisals... When we refi last year the appraiser chose one comp that had a 1/10 acre lot size... My lot is 1/2 acre. And he put zero $ for lot size value adjustment noting 'both lots offer similar utility'


    Whaaaaaat???!

    This comp is down the street. The 'lot' is basically a patch of dead grass their car is parked on.


    But the appraisal came in $30k higher than I expected so I didn't fight it ;)
  18. EatenByLimestone

    EatenByLimestone Minister of Fire

    Joined:
    Jul 12, 2006
    Messages:
    4,759
    Loc:
    Schenectady, NY
    Since land is worth something I believe it should be accounted for, but the bank I appraised for did not take it into account. I know when I was house shopping I looked at a few houses without any land to speak of and passed them up. Some were absolutely beautiful and probably well worth what they were asking for it. You can't stack wood or have a kid play in something smaller than a flower garden.

    Matt
  19. jharkin

    jharkin Minister of Fire

    Joined:
    Oct 21, 2009
    Messages:
    3,132
    Loc:
    Holliston, MA USA
    Oh absolutely I agree. The tax assessment values my land worth more than the building. But like I said otherwise the appraiser came in high, probably higher than I could actually sell for and high enough to lock in a no PMI loan so I didn't complain :)
  20. gzecc

    gzecc Minister of Fire

    Joined:
    Sep 24, 2008
    Messages:
    3,634
    Loc:
    NNJ
    Now thats funny!
    Swedishchef likes this.
  21. Swedishchef

    Swedishchef Minister of Fire

    Joined:
    Jan 17, 2010
    Messages:
    2,210
    Loc:
    Quebec, Canada
    That is what I am talking about. Prepayment penalty. BUt we certainly don't have all those other fees when getting a mortgage other than notary/lawyer fees to make it official...

    A
  22. Cross Cut Saw

    Cross Cut Saw Feeling the Heat

    Joined:
    Mar 25, 2012
    Messages:
    399
    Loc:
    The City of Ships, Bath, Maine
    In the state of Maine it's illegal to charge an early payment fee or penalty for any type of loan...
  23. nate379

    nate379 Guest

    When I did my refi about a year ago I actually MADE money on doing it. 3.25% fro 5%. After it was over I had made enough to cover a month of payments and $400ish into escrow which I got back after I had an overage when taxes got paid.
    Cross Cut Saw likes this.
  24. basod

    basod Minister of Fire

    Joined:
    Sep 11, 2009
    Messages:
    937
    Loc:
    Mount Cheaha Alabama
    So I got the numbers from my current mortgage holder -2800 closing and 385 appraisal.
    Didn't bother shopping any further as the 3k I'd save in interest is offset by just paying 3200 on my current principle

    This rate modification deal apparently adversely affects your credit - this may be total BS coming straight from the lender.
    You have to prove some hardship etc, and I'm sure the deal is sweetened on their end if your cashing out equity - they're making up closing costs on the interest over the loan life.
    Not knocking anyone's decision life sometimes puts you in a situation of picking the lesser of two evils
  25. woodgeek

    woodgeek Minister of Fire

    Joined:
    Jan 27, 2008
    Messages:
    2,291
    Loc:
    SE PA
    Not clear what you are talking about. You would only save $3k over the life of the loan?? The transaction cost (less escrow, etc) should be less than 1% of the home value. Even a quarter point reduction in interest would pay (pre tax) in 4 years or less. After tax, call it 5 or 6 years. Are they only offering you a 1/8% or something?

    I did two refis, both knocking more than a point off, and netting me around 20% of the value of my house, after taxes, over the life of the loan.

    Was this app with your existing lender?? Sounds fishy to me.

Share This Page