Hi All,

Trying to REFI our first mortgage to a 30 Year Fixed.Need your expert advice/suggestions

Here are our current numbers

1st loan balance:$527K( current rate 5.625 -5/1 ARM-Still has 2.5 years to reset the rate as I got this loan in nov'06)

2nd loan balance:$58K( 7.875 rate-30 years fixed Home Equity Line-Lender O.K. with REFI of First loan)

Was shopping around and  started our loan app with two lenders. I told both the lenders upfront that for a low rate I'm willing to pay upto 1 point.

Also checked with my current lender Boa and they are offering 5.25% for 1 point.

Please suggest which one should I pick and why? Appreciate your views.

Thanks in advance....

Lender#1

I started with citi first in May'09.our REFI is at underwriter stage at Citi mortgage. Here are our  30 years fixed loan terms for 1 point.citi process is very slow.Does it mean that CITI will guarantee me 4.625% as the shown below or how does 60 Day Float work?

Loan Type:    30 Year Fixed
Loan Term:    360
Interest Rate:    4.625%
Rate Commitment Option:     60 Day Float
Rate Commitment Expiration:     07/13/2009
Anticipated Closing Date:    07/13/2009

Lender#2

This direct Private equity lender "XYZ" recently started our REFI process 3 weeks ago at 4.875%  for 1 point.They are working fast and committed to close very soon.(few weeks from today) compare to CITI.They are aware of my citi terms and conditions as shown above.The rate is NOT locked yet...

Citi---HUH? 

It's a refinnce---no big hurry to close (other than potential rate)---Find a Broker in the directory here and get it done!

Just got the apprisal value as $650K which is better than compare to citi apprisal value of $630K few months ago

Does a broker get a better deal or a direct lender?

It takes so much time and energy to get all the paperwork in place and to provide the info/follow up with the LOs.

It has been several months process working with citi and this lender.We're in credit score 740+ club.My credit history was checked 2 times already in the past 3 months which caused my score to drop.

Just got the word from the loan agent that underwriter approved the loan and I've NOT LOCKED the rates yet.May be the formalities will complete early next week and I can lock the rates for 15 days.Once the rate is locked will have 1-3 business days to complete the closing.

I'm willing to pay for the closing cost and also up to 1 point.

So what rate I can expect for a 30 years fixed Jumbo loan of $527K loan balance in CA state/SF Bay area?

How should I handle the loan lock situations? Should I go for 15 days lock or more?Not sure whether locking costs me any fees or not?

Experts advice please

Appreciate your time and advice..

My current loan balances and rates

1st loan balance:$527K( current rate 5.625%-5/1 ARM) => Trying to REFI to 30yrs FIXED

2nd loan balance:$58K(current rate7.875%) => Subordinate the second loan(Lender approved it already)

Total Loan Balance=$585K

Appraised Value of home: $650K so LTV= $585K/$680K = 0.86

BTW FICO Score of 740+

Hope this will give my current situation.

Let me know if any further info is needed.

So you've got 2 different lenders working on your loan at the same time?  And they've both paid for an appraisal assuming that you'll be closing with them?  Or did you pay for your own appraisal?  This is not fair to the lender who you're going to be dropping. 

You can go with a shorter lock period of 15 days as that will offer the best rate, but you need to make sure you're going to be closed within 10 days or so after locking.  Since it's a refi, the loan will not fund until 3 days after closing, which means your lock will have to last until the day of funding.  Most lenders will not fund on Saturdays, and Sunday will not be counted in your 3 days of rescission, so you need to know if you're close to getting a full approval before locking in for 15 days. 

For example, let's say you locked a loan on July 1 for 15 days, which is a Wednesday.  Your lock will expire at the end of the day on July 16.  Now let's say that you ended up having to wait until Monday the 13th to close.  After your rescission period of 3 days, the loan would fund on Friday the 17th, which means you blow your lock period and you'd be subject to worse case pricing and might be charged more by your lender. 

I also noticed you were concerned about your score dropping after having it checked twice in 3 months.  That will not cause your score to drop.  If it had dropped it was because of something else, either increased balances to limits on your credit cards or something like that.  You would need to check your credit way more times than that to have it affect your score.

Hi Westy,

Thanks a ton for the detailed and quick reply. I didn't know how the locking works and your inputs are really helpful as this is the FIRST TIME I'm doing a REFI.

To keep the looong stoy short.

Lender#1 Citi:

I've started my REFI process way back in March'09 and paid non-refundable $525 towards the app fees and its is still in the under writing phase. I'm tired of calling/e-mailing citi LO and loan agent to get an update regarding my loan status but ALL my efforts were wasted and NO update so far on this.So I'm NOT CONFIDENT that CITI will get me the rate they promised on my loan app i.e., 4.625% for 1 point.Per citi process they paid for apprisal. I'll willing to pay for the closing cost and up to 1 point for a lower rate

Lender#2:WJ Bradley

Started the process 3 weeks ago and underwriter approved the loan already.Need to lock the rate in next couple of week(s) and move on to closing.

Also WJB is willing to pay me the fees which I paid to citi and is moving much faster than Citi.So I'm confident that WJB will close my REFI much faster than Citi and they'll meet or beat the Citi rate.Again I'll willing to pay for the closing cost and upto 1 point for a lower rate.The overhead here is <$2K towards WJB fees+ Apprisal fees of $435 which I paid already.

And also what do you think of WJBradley as I've never heard of them

Tell me now what should I do as its very tempting to lock in low 30 years fixed rates as my 5/1 ARM will reset in couple of years down the down 2011 and I'm not sure how rates will be in the future as I  already missed the boat in March/April.Couple of my friends did REFI @ 4.625 - 4.875 range in March/April for jumbo loan

how much of hit are you going to have for PMI? add that to your rate for a better comparision of your loan cost vrs your current loan that you have 2 1/2 years left on.  Also you might want to analize your current 5/1 ARM as to what is the Margin and Index, as most indexes are well below what they were 2 1/2 years ago, and the present problem with the economy are likely to go away anytime soon, so your present loan may not look to bad when you have compared, and considered all the impacts.

Louis

Hi Louis,

Thanks for the reply

I've first and second mortgages. Paid 5% down when I brought the home in 2006 and got

80%  of home price as the first laon and 15% Home Equity Line as second.

So never paid any PMI so NO impact on PMI as I don't have any PMI.

I did  shop around in local credit unions as well and local big banks apart from Mortgage brokers but no one showed interest because I didn't have 20% equity and I've second mortgage