Refinancing – am I getting a good deal?

Posted on Oct 31, 2012 in FHA Information

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Question by Monkey dust: what are some government programs to help refinance a house?
I live in Pennsylvania

Best answer:

Answer by Judy
This isn’t help to re-fi, more about but it is help to prevent foreclosure and re-negotiate your loan.
This may not be what you need- but you look into it.
Hopenow.com – set up by the feds (HUD).
Heard about it in Oprah a couple of years ago – still going strong.
(not oprah – the program)
This service will help you prevent foreclosure – just in case you are in trouble.
/

What do you think? Answer below!
Question by Rachel H: Refinancing – am I getting a good deal?
I’ll try to be as brief as possible. I started trying to refinance my FHA mortgage at the beginning of April, view through the original lender. Our payoff value is currently at 120,500 and the appraisal value is 137,000. We have excellent credit (747 and 729).

Our original closing date was 4/30. We were willing to put up to $ 1000 at closing, but were told it would not be necessary. With all the closing cost refinanced back into the new loan we were looking at a new figure of $ 126,000. Over $ 6000 in closing cost sounded high, but it did inclue $ 2600 of PMI, so we accepted. Our interest rate would go from 7.25% to 5.00%.

Appraisal was done, then it took me 2 weeks to get up with the loan officer. Closing date came and went. Which brings me to our new closing date of 5/20…today. It’s been very difficult to get a direct answer of whether or not we would be closing today. Found out at noon that we are now required to hire a plumber to “certify” our septic system, which is another $ 200 that we did not know about.

Does this all sound like normal procedure? Are we getting a good deal? I’m also worried that it has been nearly 60 days since we originally locked in our rate. Can they raise the rate at the last minute?

If I have left out any important details please let me know, I will be happy to add them.
Thanks for the helpful info. I’m not really concerned about having to get the septic certification. Just seems like that’s something they should have already had done instead of delaying the closing again at the last minute.

Best answer:

Answer by Paul in San Diego
$ 6000 in closing costs sounds about right, especially with the PMI factored in. And, consider that this might include a prorated month’s worth of interest, too, and possibly points on the loan to buy down the rate (discount points). This should all be listed on a form they call the good faith estimate. Ask your realtor to see that (although you should have seen it when you signed all the loan papers).

The FHA has all kinds of crazy requirements for their home inspections. And, certification of the septic system is a biggie.

I wouldn’t worry about the rate lock-in. I think you can pay an extra fee to extend the rate lock-in. And, if the lender is the reason that the funding is being delayed, that’s kind of on them.

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2 Comments

  1. 5% is great and every closing is always delayed. Very rare for one to happen on the first date given. 6k closing costs seems steep on a refi but with lenders being so tight fisted, it is worth is to get that great rate.

  2. I have been a mortgage broker since 2005, and nothing you have told me sounds out of whack. Brokers are busy right now, or your guy could be new, so he might have missed the septic issue, or it just might not have been an issue till the very end. Your broker can lose money if it doesn’t close on time, especially if he keeps it at the same rate, so it’s not like he is trying to delay it. Rates are creeping up at the moment. If they were going down, then he could be trying to make a few hundred bucks. That isn’t the case here.

    You have to realize, there are many people that have to sign off on a loan, and just because it looks good to person A, person E at the end could have a problem with something. That sounds like what is going on here.