Mortgage refinancing related question

[jlstyle]

So, we have recieved this typical mortgage credit approval letter advertisement and I'm here to get some advice from mortgage experts here.

So this company "maverick funding" is offering to give us mortgage to cover our current home mortage and credit card balance and fix the rate at lower rate then our current rate.
Obviously this will eliminate our credit card payment and lock those two higher rate at lower rate which will result in $1100 of saving per month after consolidated refinance.

Are this kind of refinancing credit score hassle free?
In this current hard ass world, every dollar saved every month would help.

I mean I was never interested in these until this company is saying that they are FHA lender and their insured by the FHA. And they are claiming there are no bank runaround and we make the payment directly to them.

Anyone had any experience like this before?

Thanks for your advice!

[Peanuto]

Yeahhhhh, not a mortgage professional, but a realtor. I'd be skeptic. With the economy the way it is I wouldn't go with anyone but a big company. The mortgage market the way it is is bringing out all sorts of opportunists and scams. Not saying that they are, but I am from the same general region as you and have never heard of them. Stick to the bigger companies. Good mortgage brokers will help you. A mortgage is something too big and important to risk.

[lawwailok]

yea, i would stick with big banks. have you tried to call your current bank and see if they offer any "streamline refi"? i am through chase and last year, they send me an email regarding the streamline, i thought it wouldn't hurt to try. it was in May 2009 and the whole process was about 3 months tho, but well worth it. dropped 1.5% from my previous rate and with closing cost and everything, i only had to take out $2900 from my own pocket. but i saved $300 a month on my mortgage.

[Laser McCool]

Originally Posted by jlstyle

So, we have recieved this typical mortgage credit approval letter advertisement and I'm here to get some advice from mortgage experts here.

So this company "maverick funding" is offering to give us mortgage to cover our current home mortage and credit card balance and fix the rate at lower rate then our current rate.
Obviously this will eliminate our credit card payment and lock those two higher rate at lower rate which will result in $1100 of saving per month after consolidated refinance.

Are this kind of refinancing credit score hassle free?
In this current hard ass world, every dollar saved every month would help.

I mean I was never interested in these until this company is saying that they are FHA lender and their insured by the FHA. And they are claiming there are no bank runaround and we make the payment directly to them.

Anyone had any experience like this before?

Thanks for your advice!

"Are this kind of refinancing credit score hassle free?"-What do you mean by this?

"I mean I was never interested in these until this company is saying that they are FHA lender and their insured by the FHA. "- NO LENDER itselt is "insured by the FHA, They are APPROVED to do FHA business, and therefore are given the right to SELL their loans directly to FHA(who insures the LOAN) sometimes the lender will retain servicing rights, but sometimes they will sell it to a conduit(a 3rd lender, who is in charge of the Underwriting, closing etc of the loan)

Here is MY take on these letters.. STAY AWAY.. I have been in the mortgage industry for over 10 years now, I have NEVER once, sent out a mailer promising to lower someones rate.

#2 DO NOT LOOK AT CREDIT CARD BILLS AS SAVINGS.. Compare what your current MONTHLY mortgage payment is with the NEW mortgage payment... because chances are(and you can say you won't but Ive seen it a million times) you will rack those credit cards RIGHT back up and you will be in a worse position than you are right now.

#3 MY suggestion would be to talk to your local banker.. whoever you do business with, Tell them you are interested in a refinance. JUST on the home, do not put any credit cards into the refi. IF you want to pay off these cards, and you feel you are disciplined enough to keep the high balances off them, apply for a home equity line after your refinance. This way you can keep track of the progress you are making when you are paying the credit cards off.

Rates right now are right around 4.875 at PAR meaning no Points from the lender to the broker.. you WILL have to pay points, None of us do this out of the kindness of our hearts, the trick is to find someone who will do it honestly and charge you a fair price. I myself charge ALL of my borrowers 1%, mainly because I feel guilty making any more than that. find someone to charge you between 1-1.5% and you are in good shape.

[Laser McCool]

Originally Posted by lawwailok

yea, i would stick with big banks. have you tried to call your current bank and see if they offer any "streamline refi"? i am through chase and last year, they send me an email regarding the streamline, i thought it wouldn't hurt to try. it was in May 2009 and the whole process was about 3 months tho, but well worth it. dropped 1.5% from my previous rate and with closing cost and everything, i only had to take out $2900 from my own pocket. but i saved $300 a month on my mortgage.

Streamline only works if you currently have an FHA loan.. so if his current loan is FHA great, he could definitely do a streamline refinance, however if he has a Fannie Mae loan, or one of these other hybrid loans(alt-a subprime etc) he will have nothing to "streamline"

[Peanuto]

fha=nightmare

[Laser McCool]

Originally Posted by Peanuto

fha=nightmare

not necessarily. FHA DOES ask for a lot, but as long as you are buying a good house, you shouldnt have anything to worry about.. Its no more of a nightmare than a standard conventional deal right now.. ALL loans are nightmares..

[Peanuto]

Originally Posted by Laser McCool

not necessarily. FHA DOES ask for a lot, but as long as you are buying a good house, you shouldnt have anything to worry about.. Its no more of a nightmare than a standard conventional deal right now.. ALL loans are nightmares..

Except they keep changing all the shit around making my job harder. Like monthly alterations to FHA addendums and more expansive FHA addendums.

[lawwailok]

Originally Posted by Laser McCool

Streamline only works if you currently have an FHA loan.. so if his current loan is FHA great, he could definitely do a streamline refinance, however if he has a Fannie Mae loan, or one of these other hybrid loans(alt-a subprime etc) he will have nothing to "streamline"

believe me or not, mine is NOT FHA, but it was one of those Fannie Mae loan then Chase took over. and it was still qualified for "streamline", it was so weird.

[Peanuto]

Originally Posted by Laser McCool

not necessarily. FHA DOES ask for a lot, but as long as you are buying a good house, you shouldnt have anything to worry about.. Its no more of a nightmare than a standard conventional deal right now.. ALL loans are nightmares..

Allow me to rephrase. FHA=Nightmare to everyone involved except the applicant.

[Laser McCool]

Originally Posted by Peanuto

Except they keep changing all the shit around making my job harder. Like monthly alterations to FHA addendums and more expansive FHA addendums.

what do you do???

[Laser McCool]

Originally Posted by lawwailok

believe me or not, mine is NOT FHA, but it was one of those Fannie Mae loan then Chase took over. and it was still qualified for "streamline", it was so weird.

Chase does have a Fannie Streamline IF you hold the mortgage with them, I worked for them back in 03, we did a ton of them

[jlstyle]

Originally Posted by Laser McCool

"Are this kind of refinancing credit score hassle free?"-What do you mean by this?

"I mean I was never interested in these until this company is saying that they are FHA lender and their insured by the FHA. "- NO LENDER itselt is "insured by the FHA, They are APPROVED to do FHA business, and therefore are given the right to SELL their loans directly to FHA(who insures the LOAN) sometimes the lender will retain servicing rights, but sometimes they will sell it to a conduit(a 3rd lender, who is in charge of the Underwriting, closing etc of the loan)

Here is MY take on these letters.. STAY AWAY.. I have been in the mortgage industry for over 10 years now, I have NEVER once, sent out a mailer promising to lower someones rate.

#2 DO NOT LOOK AT CREDIT CARD BILLS AS SAVINGS.. Compare what your current MONTHLY mortgage payment is with the NEW mortgage payment... because chances are(and you can say you won't but Ive seen it a million times) you will rack those credit cards RIGHT back up and you will be in a worse position than you are right now.

#3 MY suggestion would be to talk to your local banker.. whoever you do business with, Tell them you are interested in a refinance. JUST on the home, do not put any credit cards into the refi. IF you want to pay off these cards, and you feel you are disciplined enough to keep the high balances off them, apply for a home equity line after your refinance. This way you can keep track of the progress you are making when you are paying the credit cards off.

Rates right now are right around 4.875 at PAR meaning no Points from the lender to the broker.. you WILL have to pay points, None of us do this out of the kindness of our hearts, the trick is to find someone who will do it honestly and charge you a fair price. I myself charge ALL of my borrowers 1%, mainly because I feel guilty making any more than that. find someone to charge you between 1-1.5% and you are in good shape.

Thanks!

[Kroy]

OP, if you refinance, you will be "saving" $1100, a month because you will no longer have those credit card payments, but that debt just got transfered to your mortgage. So basically if you paid 5 years on a 30 year fix before, you're down to only 25 more years of payments (yay!) but if you refi, you're back to 30 years again. Unless you have a crappy rate or an ARM, I would do some hard math before deciding to tack on 10's of thousands to my existing loan and start 30 years of payments all over again.

Example:
Say you still owe 100K on your 500K house and have made 20 years of payments on your 30 years loan. If you refinance now and take 20K cash out to pay off your debts, you will now owe 120K and you start your payments over again. You may save on monthly payments in the short term, but you will be spending much more money in the long run. The only reason why your monthly payments will be much lower is because your original loan amount was for 500K and your monthly payments reflect that. New payments will be based on 120K amortized over another 30 years so of course your payments will be MUCH lower. Ultimately it's up to you how much you want that cash out.

Rates right now are right around 4.875 at PAR meaning no Points from the lender to the broker.. you WILL have to pay points, None of us do this out of the kindness of our hearts, the trick is to find someone who will do it honestly and charge you a fair price. I myself charge ALL of my borrowers 1%, mainly because I feel guilty making any more than that. find someone to charge you between 1-1.5% and you are in good shape.

Good advice, man. From what I remember, retail banks usually charge a little more. If you find someone under 1.5 points you're good IMO. <1% is usually getting hooked up or if the broker is wanting to meet quota. At least that's my experience from a few years ago. No longer in the mortgage industry.

BTW, no one knows if you qualify or can give you truely accurate info before you give them your SS#. And like McCool said, you will pay points. It'll either be paid up front cash or absorbed into your rate; ie you getting a higher rate. So remember theres no free lunch.

[Peanuto]

Originally Posted by Laser McCool

what do you do???

Refi-nothing. Initial purchase I have to schedule and observe extra appraisals/inspections, add about 15-20 pages of forms to the paperwork, and make sure that they are the most up to date because FHA changes them a lot, and be sure to perform and adhere to the FHA regulations that are different than conventional. Basically it adds a lot more work and sellers don't like FHA contracts so it makes my job a lot harder.

[TunedM2C]

They're A- rated on BBB so I wouldn't run for the hills just yet. I've sent mailers out and they've been successul. I don't promise someone they'll get a lower rate because each case is obviously different. When I did send out those mailers I was more so advertising current pricing. You have to understand that companies buy lists all the time and unless you closed in trust, LLC, INC. or are on the do not call/contact list your info. is public record and thus very easy for folks to get your mortgage info. to market.

FWIW, here's their BBB rating: http://www.bbb.org/new-jersey/busine...ny-nj-90038502