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?
talk to me of refinancing.
- Thread starter Thorn Bird
- Start date
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.
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.
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)?
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)?
Thorn Bird said:
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...
Penfed has a 5/1 40 year ARM right now for like 5.5%. An EXCELLENT deal by any stretch these days...
also, does anyone know about selling mortgages? do i have to worry about my mortgage being sold? what does that mean for me?
ceiling fly said:
40 year adjustable? Yarg. No thanks. Sadly, that's almost reasonable in these days of interest only loans.
ceiling fly said:
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.
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...itburnswhenipee said:
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?Thorn Bird said:
Thorn Bird said:
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.
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
Druish Princess
Thorn Bird said:
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.
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
andora:
I just reread this post and it's lack of evilness was disturbing. I'm going to Krispy Kreme now
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
andora: I just reread this post and it's lack of evilness was disturbing. I'm going to Krispy Kreme now
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