We are trying to refinance useing a morgage broker. He called today to set a closing date, when I asked for the rate he said let me call you back. He did said they wanted to give us 7.5 but he said float it we wanted under 7 and that he would call back monday. Never mind the closing date we would have to reschudele. We are anxious to get this done without being cheated. We lost our home in a fire last year at an inoppertune time(as if ther'd be a good one)in our credit report(medical bills). Anyhow we are currently financed at 10%. We were cheated left and right last year people can be callous, they don't care if your kids have a roof or not! Anyhow is he trying honestly to get us a good rate, or to break us down and hit us with 10%. We would have been happy to take 7.5 and settle next week. Thank you - Sherrie

-- Sherrie R. Clifton (BryrPatch35@aol.com), November 21, 2001

Answers

Is ther anything that say you CAN'T lock it in at 7.5%? 1/2 point is alot though...

-- Laura (LauraLeekis@home.com), November 21, 2001.

Well I guess what i'm saying is is there really a 7.5 offer or next week will it be 8%, and a threat of you better take it or it'll be higher. Though I am sure we made it clear we won't sign on any higher than 8%

-- Sherrie R. Clifton (BryrPatch35@aol.com), November 21, 2001.

This has all been such a nightmare we wern't worried about having shaky credit we had no choice due to medical problems at the time but we didn't need any loans and thought we'd clear it up soon enough. Which it is clean now, but we never expected a fire and having to get a new home on our ground with less than disirable credit. Try very hard to never get bad credit, you don't know when you may need it.

-- Sherrie R. Clifton (BryrPatch35@aol.com), November 21, 2001.

Hi Sherrie

I refinanced my mortgage last July. I went from 11% to 8 1/2%. My original mortgage rate was so high because in '96 when I bought my house my debt ratio was high. Due to my heart attack in '97, I was forced to declare bankruptcy.

I found a mortgage broker on line and we did everything by email and telephone (I never met him face to face!!) he arranged for the closing attorney who just happened to be the attorney who closed on the mortgage when I bought the house. He arranged for the inspection of the house, also.

Be aware that EVERYTHING should be in writing. When you start working with a mortgage broker, they are supposed to write a contract with the mortgage rate fixed (the term is "locked in") for 30 days and then you have the closing. During that time he CANNOT change the mortgage rate. Everything must be done within those 30 days

Do you know what your debt ratio is? Did you declare bankruptcy? or were you just late on some bills? All these questions are what will be looked at. Have you had him pull your credit report and did you go over it with a fine-tooth comb? All these things are factors as well as things like the age and condition of the home, property (land) value, how much equity you have and how much you still owe. Other things to take into consideration when refinancing -- how long do you plan on being in the home, what your income is and possibly the question of health of the person who will be the mortgage holder.

Please let me know if you have specific qeustions -- I can pull out my paperwork and help you as best I can.

MissJudi

-- MissJudi (jselig@clemson.edu), November 21, 2001.

Sherrie, A web site that might be helpful in understanding all the costs/fees and rates variability is bankrate.com. They have a bunch of very useful stuff there as well as a "daily ticker" of rates. (go to the mortgage section on the right hand side). They are not lenders/brokers, just analyists. T.

-- Tony G. (TonyG@ghost.com), November 21, 2001.

Was there some reason you had to go through a broker rather than your local bank or credit union (where they know you)? The brokers can be good at getting you loans you might not qualify for at all otherwise, but you will pay for the privilege, because they have to get their commissions too.

-- GT (nospam@nospam.com), November 21, 2001.

Sherrie,

Refinancing =friend, mortgage broker=often not.

Have you tried your bank?

Your question is of course very general and there may be circumstances that have an effect on your situation. Mortgage brokers are not all bad, but they must be paid, often a lot; and there is no place to get the money except from you the borrower. Points are nothing more than an added payment in the beginning of the loan that causes the note to have a higher yeild. In other words the lender gets more money, in a lump and you the borrower must pay that lump sum amount. Sometimes this can be added to the note (financed) but it is still your cost. Often you will encounter other hidden, or not so hidden costs when refinancing. Things like a new appraisal, and repairs required by the lender. It will often be necessary to get a new or updated insurance policy on the property, and often the lender will require M.I.P. That means monthly insurance premium, that is an add on to your monthly payment over and above principal and interest.

Now all that said refinancing may be a good idea, shop around fro the best deal.

Another option might be to prepay your existing note, by making extra payments from time to time. There is (usually) no cost to do this, and it may not be just what you need to do right now...Good luck.

ED COPP (Ed Copp Realty, McArthur, Ohio)

-- Ed Copp (OH) (edcopp@yahoo.com), November 21, 2001.

am in the process now,, got a call today,, rates JUMPED today,, from 5 3/8 to 7 3/4,, IM at 7 3/8 now,, so,,IM on old, hopefully I dont loose my deposit

-- stan (sopal@net-port.com), November 21, 2001.

My advice would be not to worry about rescheduling a closing date. It's not like you have to move. If you're currently at 10% and are only going down to 7.5% it may or may not be a good idea anyhow, depending on your costs to do so including but not necessarily limited to discount points and loan origination fees. It's not uncommon at all for mortgage brokers who specialize in loans to people with bruised or damaged credit to charge dramatically higher discount points and origination fees. Be careful of these things as you'll have to live with them for a long, long time.

If you would like some specific advice please IM me privately and I'll run your specific numbers and give you some results that will enable you to decide what is best for you. I hope this helps.

-- Gary in Indiana (gk6854@aol.com), November 22, 2001.

Sherrie,

We bought a place in March of 2000 - since that time (as you know) rates have fallen. (Be aware they are on there way back up.) We went through a morgage broker at the time and we had no problems. (Be aware they are going to sell your morgage and you don't know who to. I do not consider this to be a bad thing because you have to make payments to someone.)

Last week I went and refinanced. We got two points lower then the original loan. This is huge savings. We will close at the end of the month.

Getting a loan is like shopping for a car. Check around and you can find a better deal. www.wellsfargo.com has a site to show what the current interest rates are and what payments will be. (I believe you can even start the loan process over the net depending on the type of loan and your location.)

We do not have a lot of money so we put the finance charges in the loan - we may have to come up with less then $200. Instead of getting a lower payment we went with less years. We went from a 30 year loan to a 15 year loan. We will pay a little more but we cut the time in half.

Again I would say shop around - talk to the bank you are now with - talk to other banks - talk to the morgage broker - see who is offering the best deal and lock in. Let the bank and the broker you are shopping around. (They should want your business and will try to get it.) Get a fixed rate loan - lock in and save money.

-- Tom S. (trdsshepard@yahoo.com), November 22, 2001.

Sherrie,

I am the owner of a broker company and I think if you are dealing with the right people, we are a good way of getting a loan. But the emphasis is on working with the right person, just like any other business. Right now, I wouldn't be happy with 7.5%. Rates are still under 7% and they went down yesterday. You can fax me a copy of the Good Faith Estimate if you want and I can take a look at it and show you where the "junk fees" are. We buy interest rates at "x" and sell them at "y". That is where we make our money. We try to "earn" a point per loan on the rate, which I think is fair. If you are paying more than that, you should check with someone else. As far as dealing with a bank or credit union, I have called several to compare and can always do better than they can do. If he can't give you a firm rate, then I think you should check somewhere else. Keep paying your mortgage payment and you won't be forced to accept a bad loan. Too many times, clients will start the process, then get behind on their mortgage and be forced to take what ever is offered. I'm in Indiana and would be glad to offer my assistance if you are in this state. I would also look at you paperwork if you live outside the state to let you know if you are getting a decent deal.

Mike

-- Mike Parish (mparish48@msn.com), November 22, 2001.

One nice thing about dealing with local (and other banks who think this way) credit unions is that you can get a loan that will NOT sell its servicing (the address you send the money to). It can be a real hassle dealing with a loan that changes hands every 6 months. Payments don't get credited on time, or misdirected because you don't get the notification of the new payment address. Also, if you keep it with the bank you have accounts with, you're not stuck with take it or leave it dates (usually 1st or 5th), you can transfer money from your account on the last day of your grace period (usually the 16th). You might even find one that will shave off a small (like .25%) percent if you have direct withdrawal from your account set up. Always try where you have a banking relationship already before you go to strangers.

Some mortgage companies deliberately hold on to your payment so that they can "say" it was late and charge you late fees. Happens all the time. You don't want to have to spend money to send it certified or express mail every month. Don't be so desperate you'll go with any company.

I would respectfully disagree with Mike, it is your credit record that mainly determines what good deal you will or won't get wherever you apply, not the broker or bank per se. There are lots of places willing to loan money. If the credit report is not good, you won't get as good a deal as someone with better credit, and that's the way it is.

I get the impression from the original post that there was not replacement coverage on the house that was lost? Because if there were, your appraisal for loan purposes would have been higher with a new house.

-- GT (nospam@nospam.com), November 22, 2001.

GT,

If it is soley your credit which determines your interest rate, then why do so many people have different rates, providing they close on the same day?

To an extent, it is your credit record that determines your interest rate, but at the same time, 10 people with 10 identical credit scores, working with 10 different companies will probably end up with several different interest rates. If your credit score is about 640, you qualify for the conforming interest rate market, providing debt ratios are in line.

It is the person behind the desk who truly determines what rate you get, or more accurately, what rate he/she can sell you. I frequently compare my products to banks, credit unions, other brokers etc. The majority of the time, banks and credit unions cannot compete. They do tend to hold onto the loans more, but they also must make a profit. I had a friend the other day who called his credit union and was offered 7 1/8th. My offer was 6.5% for the same loan. It pays to shop around and be informed.

I would be weary of anyone who couldn't give you a firm answer to your questions pertaining to rate and closing costs. I have been in this business for years on both the retail and wholesale side and nothing anymore would surprise me. Yes, there are some crooks out there, as with any business, and I certainly would shop around as with any major purchase.

Mike

-- Mike in Indiana (mparish48@msn.com), November 22, 2001.

We just refinanced our house, expecting the checks next week. We went through Netbank (www.netbank.com). They were having an awesome deal - no points, $10 closing costs (I kid you not!), no appraisal, and interest rates as low as 5.25%. Only catch is it's only for a 5-10-or 15 year term.

We had an adjustible rate which was at over 9.5%...and a 30 year term. We refinanced, took out additional money to finish my husband's 40x50' garage and our payment went up about $4/month and we cut 8 years off our loan and saved thousands in interest. Best part is if the rates dip again, we aren't out but $10 for the closing costs and $2 for the notary, so we don't have to wait a certain amount of time to recoup our closing costs.

Last time I checked, NetBank's rate for HEL (home equity loan) was up to 7.75%, but you may want to check out other internet banks. If you don't have a few thousand dollars for closing costs and want to refinance, this could be a great deal for you. =-)

-- Shannan (JanuaryGem2@aol.com), November 23, 2001.