Refi Question - Can We Do Better Elsewhere ?
My husband and I are looking to refinace our jumbo loan on our 2 family, which is currently at 6.25%. Our credit union informed that while my credit was pretty good, my husband had a credit score below 700 which would not allow us to get the best interest rate for fixed term loans. They…
My husband and I are looking to refinace our jumbo loan on our 2 family, which is currently at 6.25%.
Our credit union informed that while my credit was pretty good, my husband had a credit score below 700 which would not allow us to get the best interest rate for fixed term loans. They said that they must take the middle of his 3 credit scores to determine the interest rate. However the credit union said that only 2 of the agencies had reported a score and thus they were obligated to take the lower of the 2, which was Experian at 684.
My husband had recently received his scores and was surprised that they were so low and re-ran them on the same day that the credit union pulled the credit info. Each of the 3 agencies reported to him as follows: 650 Transunion, 711 Experian, 719 Equifax. Therefore I thought we would not have a problem getting a good rate as his middle score was 711. I assumed this was a misunderstanding, especially regarding the 27 point difference than what was reported to my husband by experian. A few days later my husband re-ran his score and it was even higher. Also he had scores from all 3 agencies whereas our bank only had scores for 2. Never mind that transunion does not even have a record of our mortgage on his transunion report – even though he wrote them 2 years ago about this.
The shocker came today when we were told by the credit union and by the credit bureau and that for mortgage applications the credit agency calculates the credit scores differently and that this results in a credit score that can be up to 40-60 points lower than the credit score calculated for other purposes and that is reported to individuals via online credit score providers. Thus the credit score that one would receive through an online credit service would not be the same as the one computed for a mortgage . Does this sound correct ?
Also does it seem correct that Transunion would report a credit score to an online credit agency, but would not report the score to the credit bureau that the Credit Union/our bank deals with ?
It seems like this is set up to make it very difficult to get the best interest rate for a refi. …..
The credit union is thus offering us a 10 year fixed rate jumbo mortgage for 10 years at 5 % followed by 20 year adjustable at whatever rate is effective in 10 years. We would be allowed to refinance for 150 USD in 10 years (though we know interest rates will be hirer surely by then) . However we originally asked for a 25 year fixed term mortgage. However due to the “bad†credit described above the credit union can give us only 5.375% for a 25 year fixed (instead of 5.15% at the best credit rate).
Thus the bank is suggesting we do the 10 yr fixed followed by the 20 year adjustable….
Is the above standard and we just go for the refi with the credit union with the 10 year fixed followed by the 20 year adjustable ?
Should we look somewhere else ?
Hi,
High Balance loans have a slightly higher rate. We have rates on these programs as low as 4.5% right now. I have been a mortgage broker for 10 years and have had only great things said about my service and professionalism. Please free to email me at anytime to discuss.
Equity Source Home Loans
vsarrica@equitysource.com
I just wanted to thank Gary for the wonderful compliment! I had several telephone calls yesterday from the blog and it was a great compliment. I have leveraged my position as a Senior Loan Officer to educated borrowers and give them only the best deal out there. If anyone has any specific questions that they need answers to, feel free to email me at vthatcher@athccorp.com or call me at 631-687-3510 x106.
Have a great weekend!
Vanessa Thatcher
Atlantic Home Capital
Hello all, I’m back from my honeymoon so haven’t had a chance until now to check b-stoner.
To answer the OP’s original question regarding fico scores, Yes the lender is correct. Those online scores are not the same we get when we pull credit. I’m not 100% why but I’ve had clients call me up and say that they have a 920 fico score. I’ve been doing mortgages for 10 years and I have never seen anyone with over an 820 fico. They must use some form of other model for the credit scoring method but I find that practice disingenuous. I’ve seen those scores vary from 50-100 pts.
I would need to know more about the situation to make an accurate critique of the rate offered such as the loan amount. I don’t like that the credit union is calling the loan a 10yr fixed rate that turns into an adjustable. They are quoting you a 10/1 ARM. People get confused sometimes when they call it a 10yr fixed that converts into an arm, it’s a little deceptive.
Depending on who currently holds your mortgage will determine if you can do a CEMA to get around paying the mortgage tax. Not all lenders will do the CEMA such as HSBC and recently some of Bethpage Federal’s loans. I do CEMA’s for most of my clients if I can. You will have an additional attorney fee as well as slightly higher recording charges for the CEMA but the net benefit depending on the loan amount is in the thousands of dollars. The additional charges run in the ballpark of $1,500 for attorney and recording.
Not to be a shameless self-promoter but you can send me an email or give me a call to discuss in more detail if you would like. The big banks are very backed up right now and their rates vary greatly especially on the High Balance Jumbo Products. I’ve seen as much as a .5pt difference from the big banks.
Adam Dahill
WCS Lending LLC
212-351-8020
adahill@wcslending.com
I should add title was done and, as part of the CEMA, the bank asked for certified copies of the original recording (part of the CEMA fees).
We just refi’d on a deal to get a credit of 1/2 point towards closing. 30 yr fixed at 4.875% (down a full point from before) Originally, with the 1/2 point off, $500 loan fee, closing costs & taxes, it was going to be approx $7000.
However our mortgage agent suggested a CEMA, consolidating the old mortgage and the new one before closing (which cost about $600) and we saved $6000 in transfer taxes as we only were taxed for the balance between the old load and the new one (we rolled any costs into the new loan plus took some cash out to pay down some credit racked up during our lovely recession).
Anyone have a sense for the (rough) closing costs on a refi? Do you have to pay the 1.9% mortgage tax? Redo all the title work?
Our situations sound different, so our results will differ; but we just refi’d our b’stone at 3.75% for 15 yrs. I would very much recommend our mtg broker (who also refi’d our friends b’stone). She was able to beat our long-term bank (Chase) by 40 basis pts. You can tell her Gary recommended her.
Vanessa Thatcher
Atlantic Home Capital
631-687-3510 ext 106
Try Amerifund. Don’t do an adjustable rate mortgage–even 10 years from now unless you are positive you are going to sell. Rates are at an all time low, you should lock in. Closing costs are still a lot on NY refi’s. Also make sure you do a CEMA loan which will lower you recording tax.
Suggest talk to Wells Fargo as well. I’ve had good luck with Ben Levin who seem to understand B-stone market and is good at giving me straight answers.
Above comment spot on. A lot depends on your situation. If you think you might be there longer than 10 years, perhaps worth acknowledging slightly higher rate for longer period might be prudent. I say “might.”
Other potential option is conforming + variable credit line. Good luck!