71
The lender is concerned that the loan was paid off with borrowed money and thus the borrower has a debt that they are hiding from the lender. It is absolutely routine for a lender to investigate any recent significant financial changes of a borrower to look for ways they might be hiding debt.
It's not unusual for people to receive gifts to help them afford ...
46
The student loans are gone, all lenders see is a 2nd mortgage. Since the mortgage is secured by the home you'd likely have a hard time getting a better rate on an unsecured loan, but it doesn't hurt to go chat with some lenders and see what options exist.
I imagine the best chance for a lower rate would be a re-finance on the first mortgage (assuming there'...
28
This is legitimate. You received funds on August 7th, but don't make a payment until October 1st. You therefore owe the interest that accrues between Aug 7th and Aug 31st. From there on, interest is paid in arrears, so your October 1 payment covers the interest from Sep 1st through Sep 30th.
but I don't recall seeing this on any mortgage origination I'...
25
I don't know what rates are available to you now, but yes, if you can refinance your car at a better rate with no hidden fees, you might save some money in interest.
However, there are a couple of watchouts:
Your original loan was a 6 year loan, and you have 5 years remaining. If you refinance your car with a new 6 year loan, you will be paying on your ...
25
I have a friend who is a mortgage broker. At the company he works for, if one of his loans is paid off within 6 months of origination, he loses his commission. It's only happened to him a few times in 9 years, and he had to repay the commission on those loans in the form of future paycheck reductions. In his case 2 large loans happened in the same month ...
20
I would ask her to be certain, but it should not hurt your loan officer. The loan officer gets rewarded for originating the loan. There is no penalty for them if a loan is prepaid that I have ever heard of.
However, you need to look at what the closing costs are for the new loan to know if this is a good idea. Consider how much out-of-pocket you'll need ...
19
Pros:
Your mortgage payment is lower
Cons:
Your mortgage payment is artificially low, nothing goes towards principal.
The rates are adjustable; given that rates are historically low, where do you think they will go?
Given the variable rates, and nothing being paid to principal, you greatly increase your risk of paying on a home.
Before the housing bubble ...
18
tl;dr: I think you can find a much better deal.
Doing a strait refi will cost you some amount of money. However, a 2.5% fee ont top of closing costs seems really high. You can get a quote from Quicken loans pretty quick and compare their fee. Also I would check with a local bank, preferably one you already do business with. The 2.5% is probably their ...
15
In a lot of cases, the bank has already made their money. Shortly after you get your mortgage is sold to investors though the bank is still servicing it for a fee. Therefore, if you refinance, they get to sell it again.
15
If you can find a sufficiently better rate somewhere -- rule of thumb has been 1% cheaper -- paying another set of closing costs in order to refinance into the cheaper loan becomes worthwhile.
To determine if this is worthwhile, the easiest solution is to get the details on the loan you are interested in and plug those into the refinance calculators mist ...
14
This is a great question! Just a couple of days ago I put together a spreadsheet to analyze two mortgage scenarios in response to this question about 15 year mortgages. I ended up not answering that question because there weren't enough solid numbers to provide advice one way or the other.
However, your question makes this spreadsheet really interesting.
...
14
By coincidence, I am in the midst of writing an article on this very topic, refinancing when there are just 5+ year left to go.
No closing costs? Any rate lower than what you have makes the deal profitable. I calculate you save $3847 over the 66 months. My last refinance took just about 2 hours, as I had my paperwork at the ready. Your only cost is your ...
13
A 30 yr 4% loan for $111,200 will cost you $531/mo. $5640 better cash flow.
The issue, of course is that to get a 80% loan to value, you need to put in $18,000 which isn't a small amount. On the other hand, you'd replace it in just over 3 years even with no other money coming in.
(Somewhere in here, I'd suggest a 401(k) loan, it would be about $330/mo ...
13
The only way I know to do this is to refinance the loan. That needs his signature on paperwork to apply for the new loan, but last I checked boot camp was still reachable by US Mail and he should be able to find a notary so this should be quite doable. Talk to the bank about what their requirements are.
12
No.
The longer answer is that you are handing a banker 10K, which goes into his pocket and to pay for the refinancing expenses. Then in a few months you will be selling the house.
The purpose of the 15 year loan is to pay it off faster. In your situation you will pay off the loan in 4 months: no matter if you refinance. Before refinancing you owe X ...
12
In Glencore's situation they do not have the means to purchase the debt even at the lower valuation.
As quoted in WSJ:
But investors have become concerned about the high levels of debt Glencore’s trading arm needs to quickly buy, sell and move goods around the world. Its credit rating is two notches above junk status, and a downgrade would freeze it ...
11
Think of your mortgage this way - you have a $130K 16 year mortgage, at 6.75%.
At 4%, the same payment ($1109 or so) will pay off the loan in 12.4 years. So, I agree with littleadv, go for a 15yr fixed (but still make the higher payment) or 10 yr if you don't mind the required higher payment. Either way, a refinance is the way to go.
Edit - My local bank ...
11
I would talk to a mortgage officer or home refinance expert, not to your current bank. Your lender obviously has no interest in helping you refinance, but if you shop around you will find people who have more interest in helping you and who have access to more resources, more programs, and more lenders.
You say you are in Puerto Rico so I don't know if this ...
11
Is this right?
Yes. They overpaid you, and now they want it back.
Turn it around. If they had underpaid you, and you didn't notice for six months for whatever reason, do you feel you should get the money owed to you?
Legally (IANAL), your terms of employment are a contract, and breaches of contract can be pursued for up to six years in the United ...
10
I think the problem you are having here is that you are applying logic to a process that is kind of set in stone. You might find a loan agent that can see your point but due to corporate governance or government regulation there might be a policy that all refinances have a new appraisal. Besides the loan companies pass on the cost to you, so other than ...
10
This contradicts the other answer so I think it's worth mentioning: I believe different companies have different pay structures and the only way you can know for sure is by asking your loan officer.
A friend of mine purchased a house earlier this year and just last week he told me he wants to refi but is currently waiting because he too doesn't want to ...
9
Who refinances loans? Banks, credit unions,...?
Yes. There are also Internet lending sites, mortgage brokers, etc.
What are the pros of going with one or another?
rates, terms, points, closing costs.
What are the key steps in refinancing a mortgage?
You need to do some shopping and figure out who's charging how much in closing costs (could be ...
9
You should have her sell it to you for the amount of the outstanding loan. You take out a loan in your name for the amount (or at least, the amount you have to come up with). You then transfer the title from her to you, just as you would if you were buying the car from someone else.
While the title is in her name, she has ownership. This isn't a ...
9
All I see is "we are refinancing to raise our raise from 3.75% to 3.875%."
There is a special place in hell for the guy who would sell you such a refi.
The fact that you are going from 30 to 15 and not the other way around is what's troublesome. Nearly all fixed rate loans will allow prepayments. So, calculate the new payment and start paying at a faster ...
9
Generally it is not recommended that you do anything potentially short-term deleterious to your credit during the process of seeking a mortgage loan - such as opening a new account, closing old accounts, running up balances, or otherwise applying for any kind of loan (people often get carried away and apply for loans to cover furniture and appliances for the ...
9
Since the car is in her name, the cleanest option is probably just to buy the car from your friend and pay off the existing loan so that it is in your name only.
If I have to retitle the car to my name, will that negatively affect my score?
Not the retitling, but the opening of a new loan will have an impact. HOWEVER, you shouldn't make that a deal-...
8
Refinance, definitely. Go for Fixed 15 years, which will leave you with the same remaining time for the loan that you have now, but a much lower interest (you can find below 4%, if you look hard enough). You might end up with lower payments and higher portion of interest to deduct from your taxes. win-win.
If you're confident you're able to pay it off ...
8
The answer that first came to mind is that it's not really a "down payment"; it's "closing costs". There are costs associated with creating a mortgage (origination fees, guarantor fees) which can't be capitalized, because they're needed up front to defray overhead, pay other agencies involved in loan creation, etc. They're not willing to lend you this money, ...
8
Having looked into SoFi loans myself, I have found a few drawbacks. It may still be worth it overall to grab a better rate, but if a student is going from federally guaranteed loans to private loans, then some of the benefits will go away as well. This is part of the reason private loans may present such a cost savings, since the debtor is ceding certain ...
8
Given the current low interest rates - let's assume 4% - this might be a viable option for a lot of people. Let's also assume that your actual interest rate after figuring in tax considerations ends up at around 3%. I think I am being pretty fair with the numbers.
Now every dollar that you save each month based on the savings and invest with a higher net ...
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