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March 18, 2009
Refinancing Question
I am thinking about refinancing and would like to know a little bit more about the process.
I will probably go with the same lender.
Here are my questions:
1. Will the closing costs be as high as the ones for purchasing?
2. Do I need a lawyer?
3. Will there be a face-to-face closing or will this be done by mail, fax, and e-mail?
4. What kind of documentation will I need?
5. What kind of funds will I have to have in my bank account?
Many thanks for answers!
Comments
I personally don't know very much about refinancing other than to inform you that there are many different types of refinance loans. I just got approved for a 123 refi which involve no closing cost at all at 4%.
Posted by: Giovanna at March 18, 2009 4:55 PM
Congratulations, Giovana, nice rate! Could you be more specific. What is 123 refi? I just googled and got a million things to chose from.
Posted by: Bessie at March 18, 2009 5:01 PM
Bessie,
Actually I can't tell you very much. I telephoned Wells Fargo which I have a mortgage with and asked about refinancing. They started out quoting several options. It wasn't until after I stated that I refuse to pay any additional closing costs that they offered me what appeared to be their last resort. They referred to it as a quick 123 refinance loan that involves no closing costs. She asked a few questions to see if I prequalify, and I had to have above a certain credit score with was either 620 or 720. I faxed over proof of income and within a week received a package of forms to have notorized, an online appraisal was done
Posted by: Giovanna at March 18, 2009 5:35 PM
Giovanna-It sounds like they modified your loan. Rates are great but they are not 4% especially with no closing costs. Did you have a financial hardship this past year or were you behind on payments?
Posted by: Adam Dahill at March 18, 2009 5:42 PM
Actually I originally called to inquire about the Obama's Stability Plan and was informed that I didn't qualify because I wasn't behind in payments. They said they will put my name on a list and notify me within a few weeks when they become more familiar with the plan and if I qualify for something else. As far as modification I don't remember hearing that mentioned. What's the difference? I continued with a 30 year fixed rate.
Posted by: Giovanna at March 18, 2009 6:04 PM
So did you close? NY is a bank attorney state and an attorney has to be present at the closing to represent the bank.
Are you in a low-moderate income tract? Maybe you are getting a CRA product.
4% with no closing costs sounds too good to be true. Hey, if you can get it more power to you. That's amazing. Is it no bank closing cost? They are covering your title insurance and the attorney fees?
Posted by: Adam Dahill at March 18, 2009 6:24 PM
What is CRA?
Now looking at the Good Faith Estimate of Settlement Charges...Yes, everything is either paid by the Lender or there's no charge.
Posted by: Giovanna at March 18, 2009 6:36 PM
CRA stands for Community Reinvestment Act, it's offered to people who fall within a certain income level and/or live in particular neighborhoods. CRA loans are offered by Sovereign as "Affordable" loans, and by HSBC as "Community Works" loans, I don't know what Wells Fargo calls them. But the CRA rates I'm seeing are all in the 4.625 - 4.5 range, so I'm curious about this low rate too!
Posted by: petunia at March 18, 2009 9:18 PM
Giovanna-Please keep me/us updated on this 4% no fee mortgage because I have never heard of anything like this. It's just not mathematically possible unless they are modifying the loan.
This is a 30yr fixed mortgage not a 10yr or 15yr fixed?
Rate are low but they are not that low.
Posted by: Adam Dahill at March 18, 2009 9:57 PM
Giovana, I followed your lead and called Citibank and was offered a rate of 4.5% with no closing cost except for an application fee of $505. closing in about 60 days. This sounds really great but I will probably sleep on it. I have no late payments, more than 20% equity, 775 credit score. the closing cost (appro.$4000) will be rolled into the new mtg. $200 per month savings on a 100K mtg sounds great.
Posted by: luvbrooklyn at March 19, 2009 2:11 PM
We just closed on a full-blown, traditional refi. Locked in a rate of 4.85 (right before Christmas) Credit checks, home appraisal, face-to-face (to face to face to face) closing, the works. We were advised we didn't need a lawyer, but the bank was taking forever to seal the deal, so we panicked and called John Paige (extremely reasonable). In the end the bank had to waive 4 days extension fees, because it was their fault we closed so late. V. high stress, but worth it in the end.
Posted by: brybrybry at March 20, 2009 11:45 AM
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