Refinance

All,

We just finally refinanced the house, and I wanted to put in a recommendation for Jill Patel of Quicken Loans - she was awesome and we closed the loan in less than 1 month.... Also, I did a lot of comparisons and the rate and costs to close the loan was by far the best (nothing else compared not even Navy Federal Credit Union)....

One thing was that I had called around before contacting them and they basically significantly undercut the lowest alternative I had....

I have no affiliation with her or Quicken - it is just that I have never had such an easy time doing a Refi (all electronic and very streamlined)

Jill Patel
President's Club Banker
Quicken Loans
Direct: 800-226-6308 Extension: 68976
Email: JillPatel@QuickenLoans.com
Fax: 800-383-9244

 

Ditto here. We used quicken loans to refinance a few weeks ago. Couldn't have been a better experience. Electronic process was awesome and service was great.

 

rates?

 

we had 3.5% 5 year arm (1% per year max 3% increase) with 1 point however offset with a $8.5K credit - it was by far the best rate we could find.

Jill was great and anxious to get a deal and get it done fast

 

4.375 for a 30 year fixed (down from our previous 5.75)

 

Just refinanced with Navy FCU at 4.0 for a 30 year fixed. Since they were our previous lender, closing costs were less than if we switched lenders.

 

Did you have to pay points?

 

At the time I paid one point. Not sure what they are at now......

 

we used amerisave and got 4.25 w/ no closing costs. It did take about 50 days to close....

 

Any of you who've mentioned rates have jumbo loans? Or are these below that limit?

 

Has anyone refinanced with a 10yr loan? I'd like to reduce the interest rate, but not drag out the length of the loan...

 

We just got a quote for 3.75 at 15 years... if that helps give you an idea.

 

not me.

 

Rates on loans over $417k, are around 4.375% and no points. Rates on
loans under $417k, 4.125% with no points. The rates change several times
daily - just yesterday they went up 1/8%. This assumes a max of 80% LTV.

 

YES, I concur with Dave, although the mortgage rates will likely tick higher today, closer to 4.5%. Also consider this, most are not recommending ARM loans right now UNLESS you plan to move or if you're disciplined enough to pay down the loan principal with your savings. Yes, they are very cheap, but so are fixed rate loans, and there is no need to set the clock back. If you've paid on your current loan for 5 years, look at a 25 year loan or consider a 30 year loan, but make your payment with a 25 year amortization, that way you're not starting over.

Your loan rate is determined by score and value and other ratios, so what you get isn't necessarily what your neighbor will get. A 740 score is considered good, whereas a 780+ score is considered excellent. The biggest issue this year has been value.

Loans at 417k and lower are conforming.
Loans above 417k and up to $729,750 (in Loudoun County, extended into 2011) are conforming jumbo aka high balance loans
Anything above is True Jumbo

 

I have to disagree with the comment about ARMS, most people do not live in their homes forever... so you need to do the math on the point where fixed is financially better than an ARM and take a judgement. So for example we refinanced with a 5 year ARM that has 3 1% increases - financially we have to live in the house over 8 more years to have the fixed have been a better deal than going with an ARM - that will mean that we have been in the house 13 years - If I recall the average family moves every 7 years............secondly the higher the rate the longer the payback... so you need to find the right balance.....as if you decide to move in a shorter window choosing a higher rate fixed mortgage is likely to keep you underwater longer

I responded as I think thier is a view that tools like ARMs arent sensible and are "risky" - reality is they aren't and for many they serve a good utility and offer more value than locking in a longer term rate. Really you need to look at the spread in rates and cost of the refinance to truelly decide.

Finally - let me end with the point that given the leverage in the housing market globally, most economists would say that long term rates are some what naturally capped

 

you don't need to refi though - your rate will adjust annually based on your contract terms (ie , market + x %).

edit - or at least that's how I understand it...

 

When Flynn is talking about risk and a loan adjusting, your new rate=the current index + a pre-determined margin, let's say 2.5%. When an ARM adjusts, your new rate stays in place for 6 months or 1 year, depending on what you chose. If your ARM adjusted TODAY, your rate would likely be lower for the next year. BUT 5 years from now, assuming the market cannot sustain these low rates without constant gov't interference, let's say the index in 5 years is at 5%. Add your margin of 2.5%, and your shiny new rate is could be 7.5% in theory. That said, ARMs have adjustment caps somewhere near 2% each adjustment up to a max of 5 or 6% for life. So if your rate today is 3.5, it could adjust to 5.5 at year 6, then to 7.5 at year 7, then to 9.5 at year 8+, but would likely never go higher than that. (This was the LIBOR index in 2006: 5.7660 Jun 29, 2006) OUCH

If at that point, you need to refinance b/c you can't afford your 9.5% payment, what happens if the value is too low and you can't get it done? Now you're stuck paying a higher rate until you get out of the house.

MOST people prefer the 'sleep like a baby' approach of no surprises. If you move, you move, but at least you don't HAVE to. And at the smokin' rates available right now, no reason not to lock it in.

Rich is probably a better money manager than most people and ARMs are a GREAT tool if you understand them. That's why I said if you plan to move, then ARMs are fabulous. But let's hope you'll be able to sell when that time comes.