Question: I owe about 22.6 years on my 5.625% mortgage. Balance of my mortgage is approx 226k. For home, I would like an appraisal of 440k or may be higher.

My first choice, if possible, is not only to refinance my first mortgage for a lower rate without extending the term, but also, to escrow my own taxes and insurance.

If I can’t find a first mortgage product that allows me to escrow my own taxes and insurance, can I chose my term?

If not, can I payoff my first mortgage with a second mortgage product? If I can payoff my first mortgage with a second mortgage (assuming the second mortgage rates are lower), can I pick a 20 year term if the 15 year term makes my payments higher than I want to pay? How do I find out either of these rates?

If I want to refinance for a first mortgage for 22 years, can I do that? If so, what are the rates? I can’t seem to find any rates other than 15 or 30 year rates for refinancing. Do I use the 30 year rate for a 22 year term?

Answer:
Escrows (Taxes & Insurance) conforming loans are priced based on you Escrowing – so, if they are not included, there is an extra 1/4 point assessed to your closing cost (or a bump in the rate). You wrote, “escrow my own taxes and insurance”; I gather that, you do not want to escrow, you would request an Escrow Waiver and you would be responsible for paying your own taxes & insurance and would be assessed the extra fee for your decision.

20 year & 30 year amortizations tend to be very close in price, however, 15 yr loans are 3/8% to 1/2% lower rate. A 15 yr payment would be about $239/month more than a 20 yr amortization, but, you would save about $1200 in interest the 1st year. If you can afford the extra payment, the 15 yr option is worth considering.

Question: Bought a property as a primary home with a 5/1 ARM interest only loan. Got married and then rented it . Want to refinance , and wondering whether I can still refinance home as primary home, since I don’t have my name in any other home.

Answer:
If the home is a rental, you can’t refinance as a Primary Residence. Since nearly all lenders pull a transcript of your IRS tax returns you’ll want to make sure you are upfront with your lender.

Question: How do I figure out what it would cost to refinance my home loan, adding in the amount I have now in?

Answer:
If you enter a quote request, you will receive some loan quote that will provide you the origination costs. You can then add those costs to the title and taxes required to close your transaction to the principal balance of your loan and one month’s interest to get an approximate new loan amount.

Question: I owe 275000.00 at 5.25%. Now, 20 years left. Should I refinance at a 15 year 4.25 % to pay off sooner?

Answer:
Before considering IF you can afford the new payment (presumably higher than your current), I suggest you consider the potential interest savings.

for 275k, 5.25% simple interest is $14,437; and 4.25% is $11,687; with a potential interest savings of almost $3,000 per year,

Since it looks like you can save more then enough interest to recover the costs, if the payment amount is ok with your budget a refinance appears to be a good idea.

Question: I’ve got a 6.375 APR loan with no points or PMI for 30 years fixed, that we got two years ago. The house was purchased for 260, but, is now valued by the county at 230 (I think it’s probably worth more). I’ve been paying a lot extra for it and have it down to 236. We have excellent credit, but, only about 5k to throw in a refinance. Should I slow down on paying the loan off to build up equity to refinance or can I somehow refinance it now?

Answer:
Might your current loan include lender paid MI? Although, you didn’t tell us your original loan balance, based on your purchase price, you are a little over 90% LTV. My guess is that either you have lender paid MI, or a portfolio loan.

If you have lender paid MI; you could very possibly qualify for a streamline rate reduction loan through your current lender. If not, a good loan structure for you might be a new 80% 1st mortgage, and a simultaneous 2nd mortgage, likely limited to 90% CLTV (Combined Loan To Value), so you can avoid MI, and save about 2% off the rate of your 1st. Another option would be a Rate and Term refinance with MI.

Question: I bought a condo 6 years ago for $375,000. At the time, it was my primary residence. By the time I relocated from Massachusetts to another state for work, the housing crisis had affected home values. My condo is currently valued by the county for real estate tax purposes at $356,000. I have a 30 year-fixed mortgage at 6.125%  with a balance of $267,800 and a 30 year home equity loan at 7.89%  with a balance of $72,000 (taken out to avoid PMI and to renovate the condo). I can’t get a refinance under HARP (I’ve tried), because, though the condo is my sole property, it is considered an investment property. I have a tenant, which helps with the mortgage payments, but, the rent doesn’t cover the mortgage costs, so, I have to supplement. I’ve paid the mortgage and home equity loans on time every month over the last 6 years and have a credit score of 770.

My question is, whether there are any refinance options for someone like me (or loan consolidation options that merge the two outstanding loans into a 30 year fixed loan)? The bank that manages my mortgage says that, if the condo was my primary residence or a second home, I would have no problem getting a refinance under HARP. Unfortunately, because it is now considered an investment property, my risk category has increased and it doesn’t matter whether I have a history of paying more than the minimum over time; Freddie Mac rules (Freddie Mac is the investor in my mortgage) don’t allow them to help me.

Answer:
You have a few options. Most likely you can refinance your 1st to a much lower rate – likely about 5%; if your 2nd will subordinate.

If the 2nd won’t subordinate, you could get up to 80% LTV; but, there are some costly pricing adjustments that would probably make your current financing more attractive.

For Income analysis, your lender will consider your 1040 Schedule E to determine your income/loss.

Question: I owe 1.020 mil on house that just appraised at 1.125 mil. Is there anyone or anyway to refinance. I am currently paying 6.25, payments are on time and I meet all other requirements?

Answer:
A portfolio loan to 90% is possible with a direct lender. Although only available with ARMs; you should be able to save about 2% from your 6.25% rate on a 5/1 ARM which could save you quite a nice sum of money. Let me know if you need more information.

Question: I owe $1.15 mil at 6% on a house. Now, it’s worth about $1.75 mil in OC. What’s the best way to refinance?

Answer:
We allow up to 75% LTV for loans between $1M and $1.5M. Your self-employed status isn’t a concern as long as your income is sufficient. We should be able to accept a 50% DTI for your loan on our Fixed Rate refinance, and possibly higher with our ARMs.

Please let me know if I can be of assistance to you.

Posted on March 18

Question : I have primary mortgage and a HELOC at 2 different banks.I’m considering to refinance and possibly consolidate the 2 mortgages into 1 loan to reduce monthly payment amount. Below is my current situation

My credit: excellent, full-time employed.
1st mortgage principal balance: 236k (5.25% fixed 30yr conventional) $1930/month
Escrow: Tax $4754, Hazard Insurance $590
2nd mortgage HELOC balance: 64k (6.83% fixed interest) $520/month
Home Value: 347K

When I contacted my primary mortgage, I was told that I would not qualify for consolidation refi because this is considered ‘cash out option’ and the LTV will exceeds 80%. So, I am proceeding to refinance only the primary mortgage (subject to agreement of 2nd lender for subordination).

Are there other options I can consider to reduce my monthly payment? Should I look into FHA (not sure if I qualify for this)? I am not interested in ARM.

Any advice/ideas will be appreciated!

Answer :
I would probably redo both loans, a 277,600 1st (or whatever 80% provides) and a new HELOC for the balance – most major banks offer HELOCs with adjustable rates in the mid 4′; if you attack the balance on the HELOC, you won’t have much rate adjustment risk.