I’m thoroughly disgusted with my mortgage company and am not looking forward to even 5 more years putting up with them, much less 30.
Nor do I want to reward them for the piss-poor service I’ve received from them.
Can anybody give me an idea of how much it would cost me to re-finance my loan with another bank? Also, what would be some issues I should address/information I should get about a new lending company?
Anybody had good experiences with certain banks or lending companies?
I see you are getting no response. My advice is to look in the paper, the net etc.
Once you have concrete numbers I can help you compare terms.
I don’t know much about financial stuff. I’m pretty much a look in my wallet and decide if I can afford it type of a person.
However, I did refinance my house about 6 years ago. I the mortgage was about 6 years old at the time. We didn’t want any out of pocket expense so we rolled the closing cost and almost everything else into the loan. We cut the interest rate almost in half and a couple of hundred per month off the monthly payment, which was our object.
What it seems to amount to is selling the house to yourself, so you have closing cost and such to pay, either out of pocket or added back into the loan. You shouldn’t have much problem with little stuff since you just bought your house. All the info should be fairly current.
A few things to think about though, if you add your cost back into the loan, depending on the amount of your original down payment, the loan may be for more than the value of the house. That’s not necessarily bad, unless you someday want a second mortgage or equity loan. It takes several years before you are paying enough on the principal to build much equity, so the more your closing cost and such that you roll into the loan the longer it takes to build equity.
Another thing, if you don’t like the mortgage company, the earlier the better to change. Since the first years are not paying on the principal, the longer you wait the more they make and you still have about the same amount to finance anyway.
Next, what’s wrong with the mortgage company? That’s what you need to ask to another prespective mortgage company. I don’t deal with mine at all, except send them money. My main concern with mortgage companies is how they deal with insurance claims. My insurance company (State Farm) is happy to give money to fix problems. My original mortgage company (Lumberman’s aka Temple Inland Mortgage) made getting things fixed a real hassle.
So, my advice is to think about what these people do that piss you off and ask any potential ones how they would handle the same situation.
I had good experience with Fidelity National, right down the road from you, to arrange the loan. They sold the loan to Homeside Lending, who have been ok to deal with. But again, I don’t know what the problem you are having with yours in the first place.
Geez, that was long. I can really go on when I don’t know, and admit in the first place, that I don’t know what I’m talking about.
Jim
Zyada -
Refinance deals are all over the spectrum. Right now, in my area, one can refinance and pay no closing costs. It depends on the market in your area. Here are some things to look for:
Interest rate. Compare rates based on APR (Annual Percentage Rate), not just on the base interest rate. The base rate is interest charged on the money borrowed while APR includes base interest plus all fees associated with the loan. It is a better indicator of what you really pay for the loan. If the refinance APR is not at least 1/2 point lower than your current APR then it probably doesn’t make sense to refinance.
Closing costs and fees. From each perspective lender get a disclosure form that details “good faith estimates” of all closing costs and fees. Read the disclosure and see if you have any “wiggle room”. For example, if your lot was surveyed 5 years ago for your original loan, you probably do not need to pay for a new survey. These fees vary greatly from state to state so it’s hard to give more than basic guidelines. Shop around.
Loan term and amount. A true refinance would mean borrowing just enough money to pay off the original loan (plus fees) and setting the new loan term to match the remaining term on the original (in your case, 25 years). Loan terms are usually pre-set by the bank and are not flexible. 30 year and 15 year are the most common, though other terms may be available. Look at refinancing to a 15 year loan. The monthly payments will be a bit higher, but you will pay much less in the long run - easily saving 100’s of thousands of dollars. Starting over with a 30 year loan means 5 more years of paying interest only before you get back to where you are today.
Tidbits.
-If you are planning on staying in this house less than 5 more years then refinancing is usually a bad move.
-Ask your friends and neighbors about their mortgage comapany. Are they happy? A caveat here is, as mentioned by JimB, that just because Company A makes the loan doesn’t mean Company A will service the loan. Mortgages are commonly bought and sold among lenders and you have no say in the matter. Ask up front what percentage of loans your prospective lender sells and what are the chances that your particular loan will be sold.
This ain’t exhaustive, but I hope it points you on the right direction. Good luck.