Long story short, we’d like to refinance our mortgage from a 30-year fixed to a 15-year fixed; we’re 2 years and 5 months in. If we can get our rate down a couple of points, we’d have almost the same monthly payment. The one catch is that because of all the foreclosures in our neighborhood, prices are all over the damn place. We put 10% down in Feb. 2010, and have been paying off a few hundred a month in extra principal.
So far one broker is saying it may not be totally hopeless even if we don’t have 20% equity; our credit is excellent, we have both been at our jobs for several years, etc. The one nutty variable is the state of the market in our neighborhood. Our own lender has yet to actually return a phone call so far.
Anyone have a similar recent experience? Any tips?
I bought my house in June 2009, with a 30 year fixed. It was an FHA loan, and I actually didn’t have a down payment (and thus incurred home owner’s insurance). I refinanced in November of last year, dropping down to a 15 year fixed. The appraisal came in extremely favorable - they appraised it pretty much exactly at the point where I would have 20% equity. There are quite a few houses on my street for sale, but it’s in an historic district, where prices are apparently pretty stable, and houses are desireable.
I tried to get from 6.3 down to 3.8, but I didn’t have 20% equity. However the lender said I might still apply under Freddie Mac HASP.
Now the process is stalled again because my Condo association is being horribly unresponsive for the insurance & tax info needed to complete the paperwork. Highly aggravating
Third Federal insisted I have 20%. It was written into the terms of the loan. I was refinancing from a 10/1 ARM 30 year (I was 5 years into it so still had 5 years before the rate adjusted) to a 30 year fixed.
I told the loan guy how much cash I had and he did all the math to figure out how much I had to pay towards principle, how much for fees and how much the house had to be worth in order for it all to work out.
I stood there and told the appraiser what the deal was when he came to my house. $157k or else no loan. I pointed out all the nice stuff in my house, all the improvements and stuff.
I don’t know if my begging worked but they appraised at exactly $157k. Somewhat generous but not entirely unrealistic. I paid the cash to reach 20% exactly then got my refinance.
I was able to go from a 30 YFR @ 6% to a 20 YFR @ 3.875 after less than 4 years. I put 20% down and my appraisal came in very close to the original purchase price so I was over 20%. But the Freddie Mac HASP program also helped and I essentially had no closing costs. Mine was easy, due to the fact that I had 20% equity.
Do you have savings that you can bring to closing so that you end up with enough equity to allow a refi to go forward?
We refi’d back in early 2009, when things were at their worst. We put 30% down when we bought the house back in 2006, but at the refi we still had to bring $18K (on top of closing costs) to increase equity/reduce the mortgage and avoid PMI.
It totally depends on what level the house would appraise at. There are sales of (theoreticallly) compararble properties within half a mile of our house in the past 3 months that literally range from $100k to nearly $300k. If our place appraises for $300k, it’s more than we paid for it, and we might even have 20% equity. $100k, not so much. If there’s a smallish difference, we have some cash in savings.