Page 1 of 2 12 LastLast
Results 1 to 10 of 14

Thread: Anyone do mortgages/finance?

  1. #1
    Senior Member
    Join Date
    Feb 2011
    Location
    Randleman NC
    Posts
    558

    Anyone do mortgages/finance?

    I am working on refinancing the house.

    I have about 5% equity and my interest rate is currently at 6.5%. The bank I am with told me they could go to 3.375% on a 15 year fixed, but I'd have to pay PMI, which I have a real problem with. If I did the 15 year through them it would cost me around 4k in PMI, which leads me to why I am here, I can't really find a better situation. I was wondering if anyone could suggest something I am missing to try to get around this. My bank is a local bank and at the time we purchased the house they did an 80%/20% over two loans to avoid the PMI. Our credit is excellent, over 750, so if anyone has any ideas I am all ears, or in this case eyes.

    I don't have enough cash to bring the equity up to 20% at this time. Should I just pay the PMI upfront and call it a day? Or make the PMI payments for the 4 years it would take to get to 20% equity.

    Thanks
    Jared

  2. #2
    Senior Member
    99Limited's Avatar
    Join Date
    Mar 2011
    Location
    LVW, Manchester, NJ
    Posts
    1,030
    Why not take out a 2nd mortgage to cover your shortfall? Your PMI payment amount should cover the majority of a 2nd mortgage payment. Another possible option, tap into your 401k. We tapped into my wife's Federal Thrift Savings account, same as a 401k sort of, for the same reason. The interest on the loan was higher than the current return on the investments and the interest was going back to us not a bank.

  3. #3
    Senior Member
    Join Date
    Feb 2011
    Location
    Randleman NC
    Posts
    558
    That slipped my mind, but unfortunately we aren't fully vested so we can't borrow against it as of yet .

  4. #4
    Just a few questions:

    When you say you have 5% equity, do you mean that that the value of your house is only 5% more than the loan amount?

    Most lenders look for an 80% LTV ratio. That's the important thing. If your loan amount is low enough for to meet that 80% LTV, go somewhere else.

    If you can't meet that 80% LTV, maybe hold off for a bit, try and pay more of your mortgage, and refinance as soon as you can hit that 80% LTV. That's what I'm trying to do this year.
    Michael
    "Don't you know who he is?"

  5. #5
    Senior Member
    WildBoar's Avatar
    Join Date
    Feb 2011
    Location
    NoVa
    Posts
    2,195
    Quote Originally Posted by mhlee View Post
    Just a few questions:

    When you say you have 5% equity, do you mean that that the value of your house is only 5% more than the loan amount?

    Most lenders look for an 80% LTV ratio. That's the important thing. If your loan amount is low enough for to meet that 80% LTV, go somewhere else.

    If you can't meet that 80% LTV, maybe hold off for a bit, try and pay more of your mortgage, and refinance as soon as you can hit that 80% LTV. That's what I'm trying to do this year.
    x2. The days of 80/20 are long gone. There's a reason mortgage insurace exists, and when 80/20 loans were being made and PMI dropped, the banks were screwed when property values dropped and people walked away from their loans. We're back to the good old days right now.
    __________
    David (WildBoar's Kitchen)

  6. #6
    Senior Member
    Join Date
    Feb 2011
    Location
    Randleman NC
    Posts
    558
    By 5% equity, I mean I have paid 5% of the total loan off, as long as the house has held value. I have been looking around pretty hard with decent luck, but I'll have to wait until Monday to talk to someone. My wife was able to get the 80/20 because of her profession, but they have since changed the program and now it isn't open to us anymore. The loan officer said I would be saving 192K, by changing so I guess if it were to cost me 4k to save 192K I could do worse. I am going to double check next week, hopefully I can find something competitive with this. Even though a national bank interest rate slightly beats this one I would like to keep my business local.

  7. #7
    Just remember that many mortgage brokers and lenders will sell the loans they write. Even if it starts out local, it may not end up being local. You may want to ask the bank if they will keep the loan and not sell it since staying local is one of your motives. If the loan may be sold, well, go for the best rate you can.
    Michael
    "Don't you know who he is?"

  8. #8
    Senior Member
    Join Date
    Feb 2011
    Location
    Randleman NC
    Posts
    558
    They still have mine, they hadn't sold any until recently, however mine is still there. We are talking about 3.375 vs 3.25. Thanks for the tip though.

  9. #9

    Join Date
    Mar 2011
    Location
    Bangor Maine
    Posts
    310
    Lock in and bite the PMI bullet for a little bit. You will be wayyy better off in the long run.

  10. #10
    Senior Member DeepCSweede's Avatar
    Join Date
    Dec 2011
    Location
    Mequon, WI
    Posts
    1,267
    If you have no intentions of selling the house for a long time - I would probably bite the PMI bullet for a while too.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •