What are people seeing in terms of loan rates, difficulty in getting loans?

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Submitted by Coronita on June 23, 2020 - 1:21pm

Has anyone recently closed on a 30 year or 15 year refinancing or purchase loan?

I'm curious what people are actually seeing, how long it's taking and how difficult it is to get a loan these days.

ive been seeing folks saying they can get a sub-3% 30 year fixed with no cost. Is that true?

Tempting....just tempting.

Submitted by Coronita on July 1, 2020 - 6:46am.

It's been awhile since I had a a mortgage but perhaps someone can refresh me on IRS rules regarding investment interest expense.....

Hypothetically speaking, if I do a cash out refinance on my primary, say $500k,and the purpose of that $500k is to buy an investment property, I believe the mortgage interest would investment interest expense that I could deduct against the new rental. However, let's say I don't buy a property for 1 year. Could I deduct the mortgage interest as an investment expense too, if I simply stick the money into a money market fund? I think the answer is yes, but just wanted to check.

I don't think I would have a problem qualifying, except I would need to finish my 2019 taxes this weekend :( My one day/week furlough ends when the federal benefit ends this month , and for practical purposes I ended up making more money by not working that day than having to go back and work that day. I'm running out of government cheese so I think my next move would be to try to get some of the cheese from banks....It's all fun and games until someone gets their eye poked out ...lol

Submitted by HLS on July 1, 2020 - 8:50am.

Why would you need to finish your tax returns ?
2019 tax returns are not needed at this time.
For salaried workers 2018 & 2019 W2's are needed + 2 recent pay stubs.

I can tell you from experience that some people who think they are God's gift to a lender have a difficult time when they get turned down for a loan. It's a humbling experience.
Nobody should assume anything about qualifying for a loan.
The guidelines can be ridiculous, and are rarely negotiable.

Underwriters are told what to do and MUST get an automated approval. They don't make decisions,they follow instructions.

At the moment, subject to change, a $500,000 loan with at least 40% equity and a credit score of 700+, 30Yr Fixed is 2.95% with zero cost. Nothing hidden, nothing rolled in.
15yr is 2.62%
with 25% equity and a score of 740+ 30yr is 2.99% no costs.
Not everyone will qualify for this pricing.
Lower rates available with a cost

Lower loan amounts, less equity, cash out, having a HELOC etc is different pricing. The more equity you have the less a credit score matters

Submitted by Coronita on July 1, 2020 - 9:39am.

Last time I refinanced, they required me to complete my taxes or at least proof of my estimated tax payments.

As far as being a god's gift to lenders, I wasn't suggesting that. But I'm as boring as they come when it's comes to a borrower....Verifiable W2 income, credit score OK, $500k would be around 40% LTV, and my HELOC I think I will close, since I no longer need an emergency loan fund since I have sufficient emergency cash. I don't think I've ever been turned down for a loan, but to your point, knock on wood, there's a first time for everything.

But again, the only way I would want to do this if I could write off the mortgage interest, both before I need to use the money and after the money is used for an actual rental purpose. Can anyone comment on the deductibility of the mortgage interest if that $500k isn't initially used for a rental property purchase?

Submitted by HLS on July 1, 2020 - 10:42am.

Sorry, I was NOT referring to YOU as thinking you were God's gift to a Lender...It was a general statement.
I can only determine that after talking to someone who thinks they are special, until I have to tell them that they don't qualify.
Having an 800 credit score, with high income and only wanting a 50% LTV loan is not a guarantee that someone will qualify.

All of your debt enters into the process, rental properties, insurance & HOA on all properties etc.
Covid caused a problem for some with rental properties because they didn't have enough reserve assets even though they had huge equity.
Another client could save a lot of money and is qualified & approved for a great interest rate, but his tenants won't let an appraiser enter the property,

HELOCS are a 2nd lien against a property for the full amount of the line whether any of it is being used or not.
It really shouldn't matter to a first lender, but the system requires it.
Having a $400,000 1st and a $100,000 HELOC is viewed as $500,000 of debt, rather than just $400,000 and can affect pricing.

Leaving a HELOC in place is possible, but requires a subordination, usually costs at least $250, and wastes several weeks.
It is definitely better to agree to close the HELOC completely and get a new one after the new loan funds.

Lots of ways to save so much money with minimal effort.
Saving a couple of hundred dollars a month is one possibility. but paying that couple of hundred towards principal every month adds up to a much greater amount of compounded savings, guaranteed to pay a mortgage off quicker.

I would not suggest getting serious tax advice here. Talk to a qualified tax advisor. You're asking some serious questions

Submitted by OC transplant on July 1, 2020 - 10:55am.

We refi'd a few months ago and saw that rates have dropped again! We used owning.com; they are currently quoting 2.75% 30 yr fixed no closing cost. We can't use owning again for 12 months. Has anyone seen similar rate or lower for 30 yr fixed?

Submitted by gzz on July 1, 2020 - 12:58pm.

OCT: how smooth was owning.com's process?

Does "no closing cost" mean no cost at all, or did you have to pay for an appraisal, title etc.

Submitted by OC transplant on July 1, 2020 - 1:32pm.

gzz wrote:
OCT: how smooth was owning.com's process?

Does "no closing cost" mean no cost at all, or did you have to pay for an appraisal, title etc.

I thought their process went pretty smoothly. Truly no cost, only had to set aside money for escrow account (1 year insurance 6 months taxes) and wait for older lender to refund old escrow account. Only minor issues were it was just around property tax time and old lender had not yet paid taxes so we paid those, then few days before closing they decided to finally pay those so had to wait for refund from county. Also just before closing they requested another pay stub, assuming to confirm still employed as that was during time when 6 million people were getting laid off a week.

I've recommended several friends to them, bummed I can't take advantage of their new lower rates.

Submitted by sdrealtor on July 1, 2020 - 4:43pm.

Fwiw owning doesnt do loans for self employed no matter how qualified or low the LTV is. Learned that by experience

Submitted by Coronita on July 1, 2020 - 5:37pm.

owning.com 15 year is what I had before at 2.5.... The 30 year though...wow.... 2.75

Submitted by scaredyclassic on July 1, 2020 - 6:43pm.

Owning told me min 300k loan 4 best rate.

Submitted by OC transplant on July 1, 2020 - 9:26pm.

Coronita wrote:
owning.com 15 year is what I had before at 2.5.... The 30 year though...wow.... 2.75

30 yr is definitely cheapest I've found, unfortunately can't do it since we already refied with them. Was able to find another lender at 2.875 fixed no cost and they have 15 fixed @ 2.375 no cost!

Yes they do not refi self employed and require 300K min, but under that would have had to have originated with much higher rate not likely in last 7 years, to make it worth their while.

Submitted by treehugger on July 12, 2020 - 9:15pm.

I am locked with owning at 2.75 no lender fees, but today spoke with United direct lending (Jacob Cantor) and he offered me 2.75 no lender fees and $500 credit. I am also chasing a rumored 2.5 at loan cabin....currently have 3% with First Republic which I got right after Brexit a few years ago, going to call them in the morning and see what they say...... this is just crazy! Is it going to go lower??

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