I currently have a 20 yrs loan with bank of america. Wanting to refi up to 30 yrs with the intention extra payments starting in July, taking me back to where I am in the form of years to pay off.

Since I have a fannie mae home loan currently and my home will not appraise for what I need to get the 80% loan to value, I was hoping to do the refi plus, I currently do NOT have PMI nor do I escrow my taxes.  I would like to keep it that way.loan to value on the good faith estimate said 83.8% load of $143,173

Bank of America is saying that I still can keep my loan the way it is, no PMI, NO Escrow, giving me 4.875 rate with paying a discount fee of $1,073.80 application fee of $400  and other lender fees of $725.  Title fees were $1,216 and interest for 30 days @ 19.12 ($573.67)

They say since I currently do not have my taxes escrowed in, I don't need to have them in again (since my loan is currently with them)

I have another lender trying to get me to go with him, saying that they HAVE to escrow the taxes if it is a fannie mae refi and over the 80% LTV and that BOA has to as well. Basically telling me that my loan officer with BOA is telling me wrong or slipping in the fees to not escrow it.

I Have tried to find my answer, even called fannie mae (still no return phone call from them) can any one help?

And one other thing, is it better to have your taxes escrowed if your getting a lower rate without paying a point, but have to finance a higher amount to include the taxes.  I am very good at putting the money aside, I take out $228 every month to put aside for it.

Thanks for any help,

Chris

The loan program sounds like one called Making Homes Affordable (MHA), where the government is allowing relaxed LTV's on Fannie and Freddie loans.

You will NOT have to escrow on your new loan, even if it is over 80%, as long as your old loan was 80% or less and no escrow account was set up.  You will also not have MI. 

The escrow waiver is only valid if you are current on your taxes and insurance. And they will require that taxes are paid if they are due within 60 days of closing.  (Even if your tax amounts are not released, they will estimate).  Example: You close Nov 15 and your taxes are normally due Dec 30th, they will require them paid.

You are probably paying for the right to not escrow as part of your discount points, about an .125 of a point.

The BofA loan officer is correct.

Just a note, Countrywide, (which BofA owns) was one of the few lenders that did not require you to escrow, even over 80% LTV.

When the current loan was taken out, the aprasal came back at $200 so at that time I was alright with the under 80% unfortunately with the economy, it's not going to make it that high. I can of course pay the $400 to get a new appraisal, but if it doesn't come back high enough, I'm still in the same situation and out the $400 :( 

I don't mind handing over the cash to make my taxes current, they are due in Feb and I have most of the money set aside.

You may not even need an appraisal with that program, as long as your property shows up in an the automated value finder.  Even if you do, you will not have to pay the appraisaer directly for an appraisal, as it will be invoiced and charged on your final settlement statement.

Also, you will be able to go up to 105% LTV as long as your new loan yeilds no cash out ($250 max proceeds to you) and you are not paying off any 2nd liens.  And yes, with no MI.

Chris Toth:

When the current loan was taken out, the aprasal came back at $200 so at that time I was alright with the under 80% unfortunately with the economy, it's not going to make it that high. I can of course pay the $400 to get a new appraisal, but if it doesn't come back high enough, I'm still in the same situation and out the $400 :( 

that's not exactly correct.  contact me at work and I'll explain the policy regarding the $400 - we have a very liberal policy versus most other lenders.

But yeah, you don't have to escrow if you currently do not escrow.  Is it better to escrow or to not escrow???  Really just depends on personal preference.  If you are disciplined at budgeting, would rather have full control, would rather earn a little bit of interest on your money, then yeah it's better to not escrow.  If you have a busy lifestyle, travel a lot, are not good at budgeting, etc..., then it is better to escrow.  Having an escrow account is simply convenience.