View Full Version : talk to me of refinancing.
Thorn Bird
07-03-2006, 11:03 AM
what are the pros and cons? what should i watch out for? a broker friend has offered to refi for us, and it sounds too good to be true. i feel like i'm missing something. anyone know anything about doing a refi?
ERage
07-03-2006, 11:12 AM
All it means is that you are taking out a loan to pay off your other loan. Typically because the new loan is of a lower interest rate.
Just pretend you are taking this loan as if it were the first one. Are the terms agreeable? Are the rates good? Does the fine print require unusual sex acts for payment?
Assuming everything is in order, then the next thing to keep an eye on is the timeframe of the new loan. Sometimes you have paid off 10 years of a 30 year mortgage but when you refinance you start over at another 30 years. This is fine as long as you intend to make payments above the minimum (even though the min would be lower than before). Then you can get it all paid off faster for lower overall interest. If you refinance and then keep paying the minimum then you could be in debt for a long time.
But what do I know, I just pay for everything in cash with my drug racket.
KNYTE
07-03-2006, 11:13 AM
Kiwi and I are in the process of doing one now to reduce/secure our CC debt. I am by no means a pro at finance, but what we did is check several banks and CUs for the best rate, then go with that one. *shrugs.
Thorn Bird
07-03-2006, 11:19 AM
so all you are really concerned with is the rate? this would be a 30-year fixed, which is what i want, at a rate currently a bit lower than ours is now, and our friend said he'd get it as low as he could go. he said the only reason we might not do this is if we were to move in a few years, which we aren't planninng on doing.
also, is this a big favor from him, or is this just routine act of friendship because he's a broker? is this bringing over a cup of coffee (small, appreciated gesture) or is this taking us out to the finest restaurant in town and treating (huge, appreciated gesture)?
ERage
07-03-2006, 11:24 AM
so all you are really concerned with is the rate? this would be a 30-year fixed, which is what i want, at a rate currently a bit lower than ours is now, and our friend said he'd get it as low as he could go. he said the only reason we might not do this is if we were to move in a few years, which we aren't planninng on doing.
also, is this a big favor from him, or is this just routine act of friendship because he's a broker? is this bringing over a cup of coffee (small, appreciated gesture) or is this taking us out to the finest restaurant in town and treating (huge, appreciated gesture)?
Yeah, as long as you are sticking around for a while a fixed low rate is better because rates will be climbing in the near future.
The amount of the gesture is based on the size, or I should say lack thereof, of the interest rate. Compare what he is giving you to other advertised fixed interest loans that are accessable for you. Keep in mind that some places may not approve just anyone. If you think you wouldn't qualify for his offered rate somewhere else but he is giving it to you then he's doing you a favor by trusting you (not to imply you are a risk, i'm just making a point). If you could qualify for the same rate or better somewhere else then he's hooking you up with that logoed coffee mug you mentioned above.
He's making money off of you, and probably a good amount too. When did you get the mortgage originally, cause you sorta missed the boat.
Penfed has a 5/1 40 year ARM right now for like 5.5%. An EXCELLENT deal by any stretch these days...
Thorn Bird
07-03-2006, 11:26 AM
also, does anyone know about selling mortgages? do i have to worry about my mortgage being sold? what does that mean for me?
also, does anyone know about selling mortgages? do i have to worry about my mortgage being sold? what does that mean for me?
afaik, it doesn't mean anything to you. Happens all the time...
itburnswhenipee
07-03-2006, 11:27 AM
He's making money off of you, and probably a good amount too. When did you get the mortgage originally, cause you sorta missed the boat.
Penfed has a 5/1 40 year ARM right now for like 5.5%. An EXCELLENT deal by any stretch these days...
40 year adjustable? Yarg. No thanks. Sadly, that's almost reasonable in these days of interest only loans.
Thorn Bird
07-03-2006, 11:28 AM
He's making money off of you, and probably a good amount too. When did you get the mortgage originally, cause you sorta missed the boat.
Penfed has a 5/1 40 year ARM right now for like 5.5%. An EXCELLENT deal by any stretch these days...
a 40-year arm? i've never heard of such.
i know he'd be making money off me...i have no problem giving business to a friend. i just want to know every possible thing before i sign.
we got this existing mortage 3 1/2 years ago. we aren't paying pmi, which is why our rate was a bit higher, but it's still not a horrible rate.
40 year adjustable? Yarg. No thanks. Sadly, that's almost reasonable in these days of interest only loans.
Why not? Normally banks charge a premium for a 40 year, however penfed is offering their 30 year rate for 40 years. Therefore, you get the lower rate, can still pay the 30 year monthly payment, but gain flexability if times somehow get rough...
a 40-year arm? i've never heard of such.
i know he'd be making money off me...i have no problem giving business to a friend. i just want to know every possible thing before i sign.
we got this existing mortage 3 1/2 years ago. we aren't paying pmi, which is why our rate was a bit higher, but it's still not a horrible rate.
He's going to give you a better rate than you got 3 1/2 years ago? iirc, that was around the sweet spot. How is he going to get you a better rate now?
ERage
07-03-2006, 11:31 AM
also, does anyone know about selling mortgages? do i have to worry about my mortgage being sold? what does that mean for me?
Ask the broker if they intend to sell your debt after they get it. Koreans love to buy mortgage debt from the US. Basically that racket means that this company loans you something like ...$200,000 for a 30 year mortgage fixed at 6%. Then they turn around the same week and sell that debt to an offshores company for 215,000. They made an instant 15 thousand and no longer have to worry about the risk of their client defaulting on the loan. The offshores company now sits back and collects your payments + interest to recover their 215,000 + all the interest beyond that amount.
It's not really a concern for you as long as you follow the terms of your mortgage. It might complicate things if there is a discrepancy and you have to deal with someone other than the original lender.
Thorn Bird
07-03-2006, 11:34 AM
that's what i wondered -- if the terms i signed on could change or not. now i wonder why my wells fargo mortgage hasn't been sold.
eileenbunny
07-03-2006, 11:35 AM
also, does anyone know about selling mortgages? do i have to worry about my mortgage being sold? what does that mean for me?
When a bank sells a mortgage, usually what they are doing is selling it to a mortgage company or another bank. They usually do this in batches of thousands of loans. Really what changes for you is who services the loan, like who handles the escrow funds, or who you have to call to ask questions about the loan. It's never really a big deal unless they sell it to someone who isn't very good at servicing loans.
Thorn Bird
07-03-2006, 11:35 AM
He's going to give you a better rate than you got 3 1/2 years ago? iirc, that was around the sweet spot. How is he going to get you a better rate now?
we got 103% financing, which put our rate at 7.25% with no PMI.
I think Freddie Mac and Fannie Mae are solely in the business of reselling mortagaes.
ERage
07-03-2006, 11:41 AM
Phase II of taking over the world:
I will wait for the easy finance bubble to pop and the rates rise steadily. I will then watch all these overextended people start defaulting on their loans. That's when I swoop in and buy all the foreclosed properties mwuhahaha :pandora:
I just reread this post and it's lack of evilness was disturbing. I'm going to Krispy Kreme now :(
mikey
07-03-2006, 11:42 AM
http://www.simpsonstrivia.com.ar/simpsons-photos/wallpapers/mr-burns-wallpaper.gif
mikey
07-03-2006, 11:43 AM
i couldnt help it, sorry
Phase II of taking over the world:
I will wait for the easy finance bubble to pop and the rates rise steadily. I will then watch all these overextended people start defaulting on their loans. That's when I swoop in and buy all the foreclosed properties mwuhahaha :pandora:
I just reread this post and it's lack of evilness was disturbing. I'm going to Krispy Kreme now :(
Yeah, hopefully the market starts tanking about the time I buy in. *crosses fingers*
mikey
07-03-2006, 12:00 PM
Phase II of taking over the world:
I will wait for the easy finance bubble to pop and the rates rise steadily. I will then watch all these overextended people start defaulting on their loans. That's when I swoop in and buy all the foreclosed properties mwuhahaha :pandora:
I just reread this post and it's lack of evilness was disturbing. I'm going to Krispy Kreme now :(
I have been trying to explain this to my roommate/future bro-in-law for weeks. He hopes to purchase a foreclosed home for cheap, refinance, pay off all his bills and sell.
He has it planned out so that his house will sell in August, he won't have to pay a mortgage for at least two months, it will pay for his wedding and honeymoon. and he will find their home in the meantime.
I have been trying to explain this to my roommate/future bro-in-law for weeks. He hopes to purchase a foreclosed home for cheap, refinance, pay off all his bills and sell.
He has it planned out so that his house will sell in August, he won't have to pay a mortgage for at least two months, it will pay for his wedding and honeymoon. and he will find their home in the meantime.
The foreclosure market can be a real dicey one to get into...
ERage
07-03-2006, 12:07 PM
Yeah, hopefully the market starts tanking about the time I buy in. *crosses fingers*
Yeah, I will be jumping in the market in about another year. I'm hoping that the rising interest rates drive enough buyers out of the market that sellers will be willing to sell at a price more reasonable for the property. These days it's still a sellers market. Higher interest isn't bad if you can negotiate a lower price from the start.
Yeah, I will be jumping in the market in about another year. I'm hoping that the rising interest rates drive enough buyers out of the market that sellers will be willing to sell at a price more reasonable for the property. These days it's still a sellers market. Higher interest isn't bad if you can negotiate a lower price from the start.
The whole bottom has apparently already dropped out of the apartment complex turning into condo market around here. Houses should be next...
Thorn Bird
07-03-2006, 12:18 PM
we went to a lake house this weekend in the north georgia mountains. they bought it for 60,000 and can now sell it easily for 500,000. you need to find some unknown, modest land on water, buy it and sit on it. when people discover it and want it (because that's what it's come to...all little hidden, quiet water land WILL be discovered and coveted), you can sell it and make a killing.
ERage
07-03-2006, 01:28 PM
we went to a lake house this weekend in the north georgia mountains. they bought it for 60,000 and can now sell it easily for 500,000. you need to find some unknown, modest land on water, buy it and sit on it. when people discover it and want it (because that's what it's come to...all little hidden, quiet water land WILL be discovered and coveted), you can sell it and make a killing.
so that's why flaming glory always talks about digging a big hole in his back yard for exercise. Now I get it :fly:
wr3kt
07-03-2006, 03:42 PM
Not a great time to be borrowing.
wr3kt
07-03-2006, 03:43 PM
we went to a lake house this weekend in the north georgia mountains. they bought it for 60,000 and can now sell it easily for 500,000. you need to find some unknown, modest land on water, buy it and sit on it. when people discover it and want it (because that's what it's come to...all little hidden, quiet water land WILL be discovered and coveted), you can sell it and make a killing.
The capital gains tax on the sale of that is going to SUCK.
Not a great time to be borrowing.
If you can get a better rate, you can get a better rate...
wr3kt
07-03-2006, 10:15 PM
If you can get a better rate, you can get a better rate...
True...but if you get a better rate now then a few years ago, someone got seriously hosed.
FlamingGlory
07-03-2006, 11:20 PM
so that's why flaming glory always talks about digging a big hole in his back yard for exercise. Now I get it :fly:
*adds another one to the short list*
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