I finally did my refis

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Submitted by gzz on May 26, 2021 - 3:22pm

Unfortunately I missed out on the lowest rates, as I was too busy with work at the time.

I ended up going with 2.375% 15 year on my primary and 3.25 and 3.625% 30 year on my investments. The 2nd loan is higher because the balance is small and it is a condo.

These are no-cost loans, ie the lender pays all closing costs and appraisals.

All-in my interest costs will go down about 5k a year.

I almost didn't bother with the 3.625% refi on the condo, since that's only down from 4.0% and the balance is low.

But why not cut the monthly payment and rate a little if it is no-cost, and the underwriting is going to happen anyway since all three are with the same lender? I have a feeling I will pay it down quite a bit over the next few years since 3.625% is a pretty good fully safe investment return.

Submitted by gzz on May 26, 2021 - 3:34pm.

Observations:

1. The best method remains starting with Zillow's comparison tool, and talking with 2 or 3 of the best offers it brings up. Not necessarily through Zillow.

2. The best rates are all from small companies in California.

3. The flashy FinTech companies are overloaded and seem like a big hassle to deal with based on reviews and horror stories of problems like 6 months to close.

4. Maybe because my LTVs are now very low, but I got a general feeling of loose money and easy underwriting. Not even one time did I get a "can you explain X?" or "can you provide more statements?" or "why does you bank account show this transfer?"

This was still a full doc loan, but it just went very smoothly. And they didn't even ask for or care about my brokerage account asset. Maybe these annoyances are just back loaded with my lender right now.

Submitted by HLS on May 30, 2021 - 4:04pm.

Depending on your loan amount, $300K+ the right pricing today for a No Cost 15yr refi is 2.25% and it should only take 2-3 weeks.
10YR ARMS are 2.50%
30YR Fixed 2.875%

Guidelines are in stone and there are generally no exceptions made for lower LTV's or higher credit scores.

Approvals are via a computer program and are either approved or not approved.
There is no such thing as a stronger approval.
If assets are not needed, there is no reason to submit them.

If you have a clean situation, there is no reason for a refi to not go smoothly, unless you deal with the "flashy FinTech" ;-)

Submitted by gzz on June 2, 2021 - 12:38pm.

My primary is under 300k, something like 270.

I am also “self employed” which may be a hit. At least some online lenders don’t take us. I also locked about 7 days ago.

For a specific example of “looser” underwriting, last mortgage the lender asked me to show proof of rental income on bank statements plus wanted the lease. This time, no. Maybe they are just on top of things and figured out the rental stream from the two months of bank statements.

Submitted by Coronita on June 2, 2021 - 1:06pm.

Hi HLS, I just did a 30 year cash out refinance $540k at 3% I noticed that some places are advertising lower rates now. Is it possible now to get a 2.75% without any out of pocket costs? The last lender didn't require a appraisal, because they lowballed the estimate of how much the house was worth, the loan was around 50%.

Submitted by gzz on June 2, 2021 - 2:13pm.

Looks like 2.75% is exactly the best rate for your situation and no-cost.

Better to get a 15-year no-cost at around 2.125%. Your interest amount declines by $4700 a year rather than $1350, and you can easily afford the higher monthly principal payment.

Submitted by HLS on June 2, 2021 - 7:08pm.

I could possibly work that out for you based on today's pricing. What's the house value ?

Approvals and appraisal waivers are generated online. Individual lenders do not decide who needs an appraisal and who doesn't.

I've seen appraisal waivers at 90% of the value and I've seen appraisal required when 40% of the value when I expected an appraisal waiver.

There is no one rate that fits everyone and pricing changes every day.

The basic factors are pretty simple:
Credit score
Loan Amount
House Value
Cash Out OR Refi existing balance
Primary Residence OR Rental property
****
The basic pricing tiers
Less than 20% equity
20-24.99% Equity
25%-39.99% Equity
40%+ Equity
************************
Self employed is the same pricing as salaried but more documentation needed for self employed.

The hassles today are solar liens & HELOCS but these can usually get worked out.

The more equity one has, the less credit score matters (to a point)

VA rates are amazing, approaching 2.25% for 30 year.
Effective last week, it is now MUCH easier for National Guardsman to qualify for VA loans

Submitted by HLS on June 2, 2021 - 7:18pm.

GZZ
Some lenders have additional overlays of what is required.
There is no pricing hit for self employed but probably requires current P&L

Regardless of what stage you're in with a loan application, you are under no obligation to complete it.
Nobody can force anyone to sign loan docs.

I had a call today from someone who needed cash out and their existing servicer quoted them 3.125% with $7700 cost today.
I'm now doing it for them at 2.875% with zero costs.
3.125% sounded good, but the cost was ridiculous.

If you want a 2nd opinion, let me know.
There may have been a much better strategy for you, that I don't know if you considered

Submitted by Coronita on June 2, 2021 - 7:58pm.

HLS wrote:
I could possibly work that out for you based on today's pricing. What's the house value ?

Approvals and appraisal waivers are generated online. Individual lenders do not decide who needs an appraisal and who doesn't.

I've seen appraisal waivers at 90% of the value and I've seen appraisal required when 40% of the value when I expected an appraisal waiver.

There is no one rate that fits everyone and pricing changes every day.

The basic factors are pretty simple:
Credit score
Loan Amount
House Value
Cash Out OR Refi existing balance
Primary Residence OR Rental property
****
The basic pricing tiers
Less than 20% equity
20-24.99% Equity
25%-39.99% Equity
40%+ Equity
************************
Self employed is the same pricing as salaried but more documentation needed for self employed.

The hassles today are solar liens & HELOCS but these can usually get worked out.

The more equity one has, the less credit score matters (to a point)

VA rates are amazing, approaching 2.25% for 30 year.
Effective last week, it is now MUCH easier for National Guardsman to qualify for VA loans

Based on current recent sales, maybe around $1.7m conservatively? its one of them lower end slum shitboxes in 92130.

W2 verifyable income. Investment and rental income need not be considered. no solar liens etc. excellent credit. my previous lender didnt give me a hard time, except i had to state a purpose for the cash out refinance. i thought it was none of their business and was tempted to say i plan on using the proceeds to buy illicit drugs, but decided to just say the standard answer..I plan on using the proceeds for home improvements, to turn my house into a filming studio for a porn business, complete with stripper poles...

The last lender gave me choice...I could use their estimated appraised value of $950k or if I insisted on it being worth more, I would have to pay for the appraisal..I did the former so I wouldnt have to pay for the appraisal, since it didnt seem to make sense to pay for an appraisal if i was only borrowing $540k and i dont care what they need to do to approve of the loan if they could get me the end result cheaper. Ive had the loan for 1 month. if you could knock off 0.25% or more, that would be totally awesome since i plan on dragging this loan out as long as i can and wont ever sell.. Too cheap money for future investments.

I'll PM you.

Submitted by HLS on June 2, 2021 - 9:06pm.

Appraisal waivers do not seem to exist if the property value is $1M or more.
40% equity+ is generally the best pricing, so if the loan amount is below $600K, property estimate of $999K offers the best pricing AND a possibility of appraisal waiver.

The appraised value is ONLY used for the transaction.
In this situation, there is absolutely no benefit to pay for an appraisal whether the property is actually worth $1,000,001 or $10 million. It won't change the pricing of the loan OR make it any easier to qualify.
An approval is an approval. There is no such thing as a stronger/better approval.

I'm sure you had to disclose other properties owned but if rental income is not needed to support them, then no tax returns should be needed.

For a cash out loan it is not the lenders business why you want the money, and many don't ask.
If they do, the wrong answer is it will be used as leverage to create any additional debt.

Loan approvals are a silly puzzle that ALL pieces have to come together to be approved.
It can be easier for someone with crappy credit and no assets to buy a house with a 5% down payment than it is for someone with an 800 credit score and 50% with plenty of assets, Go figure. It's a stupid system.

Submitted by gzz on June 7, 2021 - 6:20pm.

I spoke too soon, I am now getting the random questions about bank statements. They want a copy of the check I paid my 2020 income taxes with for example.

I still feel like this has been a smoother process than my last mortgage app in 2016, as well as several 2011-2015.

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