I am on my 3rd attempt at refinancing in 6 mos. Can someone please explain any hidden terms or fine print I?

Question

should watch for on a balloon payment on a 2nd. Supposedly locked for 15 yrs. & would either sell or refi again before the balloon payment is due.

I have excellent credit, money in savings I don't understand why this is so hard except that I'm needing 100% loan to value.

Why are people on YAnswers so self righteous & mean-spirited when all I'm doing is asking for some advice? If I knew, I wouldn't ask.

Answer 1

Forms vary by state, but the one form you should find anywhere is called a Good Faith Estimate. This form details all costs associated with financing, and will tell you how much the broker is making on you. Near the top are spaces for- Lender Fees, Loan Origination Fees, Processing Fees, and Mortgage Broker Fees. This is the money being paid by you to your mortgage broker. Near the bottom will be a spot for YSP, or Yield Spread Premium, which is the amount of money the bank is paying your mortgage broker. The bank pays the broker depending on the interest rate they sell you. Combine the amounts and figure out what percentage of the loan it amounts to. If you are paying more than 2-3% to the broker in fees (Inluding YSP), you aren't getting a good deal. Make sure you ask for a Good Faith Estimate up front, keep the original, and compare it to the one you get at the closing table.Many times a broker will give an optimistic GFE up front, then it changes at the closing table. You will get 2 GFEs if you are getting a first and second mortgage, which shouldnt add up to more than 2-3% in fees to the total loan.

Other things to watch for-> Another document called the Truth in Lending Disclosure statement. This will detail the terms of your loan, when it is expected to be paid back, etc. Like the GFE, you can get one for each loan. A Baloon is only a good idea in very specific situations. With a balloon, all of the money is due at a certain point. A typical balloon loan is scheduled as a 30 year mortgage, and is due in 15. This means that you will owe a massive chunk of money in 15 years. Brokers sell this idea because the rates are a little bit lower and they can squeeze more YSP in on them, but if your credit isn't so hot when you need to refinance, you can find yourself in trouble.

Another term to watch for, on the TIL statement.
ARM: These are commonly targetted at bad credit borrowers. The rates start lower than a fixed rate and are fixed for between 2 and 5 years. Then it starts to 'adjust' based on the market.. historically they go up. You can find yourself in alot of trouble if you cannot afford to refinance in 3 years.

Refinancing is expensive, be sure it's what you really want to do. Best of luck.

Answer 2

Sounds like you may be about to get yourself in deep financial trouble. Avoid a balloon payment at all costs. Do NOT go for a 2nd mortgage. Instead, try to get an equity line at a competitive rate that you can use as you need it.
Instead of getting a 15 yr. loan, go for a 30 year that allows you to pay it off at a 15 yr. rate. Then, if you hit a rough patch, you can revert to the 30 year payment with no penalty. If you have money in savings, why do you need 100% financing? If you must refi, go for 75% and ONLY if you can lower your current interest rate by at least 2% with no up front fees.
Remember, there's no such thing as a point-free loan. The lender simply adds them into the balance due.
So, an equity loan is preferable. If you refi, go for a 30 yr. 75% loan which can be paid off at the 15-yr rate. No balloon payments and no 2nd trust. Before signing anything, show the "truth in lending" statement (a federal requirement) to a lawyer.

Answer 3

The reason why it is so hard right now is many lenders a tightening up qualifiying for borrowers. The recent slump in the housing market has driven down property values, which in turn makes it harder to qualify. Add in the fact of all the foreclosures that are occuring recently, and lenders are really tightening the screws to protect themsleves. You didn't state what you were told why you couldn't qualify previously. Fetch has pretty much covered everything that you will be signing. Loans documents are pretty straightforward, there shouldn't any surprises, unless the rate is different that what you were told, and if your Loan Officer slipped in a prepayment penalty. But those issues are with the LO, not the lender you are signig documents with. So you need to really trust who you are working with. Also, I would say a baloon payemnt is not an issue if you know you can and will refinance down the road. You just need to be careful for unforeseen circumstances that could prohibit you from doing so. Personally, I would stay away from HELOC (Equity Lines), they usually carry a higher interest rate.

Answer 4

What is your home appraising for? With the recent slump in the housing market, your home's value could have decreased, making it impossible to refinance since you would owe more than your home is worth.

Answer 5

Your credit score has to be really good to get 100% of the value....there are only a few lenders that do that....you have to have a good job history and really really good credit.....to be able to get them....

Answer 6

you better refinance before the balloon payment is due

Answer 7

You need to read the "fine print" and if you don't understand it, ask an attorney. How can you expect us to help you without reading the fine print??

Answer 8

For a free quote: http://www.1stmdhomes.com/quote

Answer 9

You might want to reword your question and try again- this is incomprehensible.