Is there a chance for me to refinance my condo?

[Ava]

I've seen mortgage rates go down lately.

My mortgage is 30 years fixed at 4.375% but I see rates are down now to 3.3% or so.

I applied to the CU where I have my car loan, and to another CU, and they both turned me down.
I applied online and didn't talk to anyone.

Apparently, they reject me because my loan to value is not that great. I owe $54,500 and, according to Zillow the value is $56,500, that's what I have been putting as value.
Another possible reason is that the loan amount is too low for them to bother.

The idea was to refinance with a CU, but at this point I'll go with a commercial lender since I'm with Mr. Cooper.
Is it worth it to keep pursuing it? I want to refinance to 30 years fixed again, and bring the monthly mortgage payment down.
My credit score is 787 right now.
I don't want to waste my time if this is not feasible. Just wanted to take advantage of the low rates.
Any ideas?

[Tiny]

You've got a couple of "dings" - the low amount you want to borrow (55K) coupled with the less than 20% loan to value. The 4.375% isn't a bad rate. I've got a 4.185% on a 90K 30 year mortgage (that's 5 years old). I suspect even if you had 20% equity - you might have trouble finding a lender who will bother with the 55K loan - and if they are willing to give you alower rate they will want more up front in the form of cost to do the loan.

I was looking to do a cash out refi on a rental I owe 23K and it has a value of about 120K - I wanted to borrow about 80K and no one wanted to talk to me about doing it. I was able to get a brand new 150K loan on a rental property though (in the same area as the rental I wanted to do the refi on).  That loan has the best rate I've ever had - 3.625%    ::shrug::

How far into your current mortgage are you? Are you trying to lower your payment?

You might just need to be persistent and keep after the mortgage lenders until you find one who will talk to you about the refi.    Just do the math - as a refi might not achieve what you want (it may cost more than your current mortgage). 

[jelloshots4all]

Check out rocket mortgage.  My friends refied right before the shit hit the fan with them.

[Lizard Queen]

You've been there a while. Could you swing a 15 year?

[Ava]

May 16, 2020 16:12:35 GMT -5 Tiny said:

You've got a couple of "dings" - the low amount you want to borrow (55K) coupled with the less than 20% loan to value. The 4.375% isn't a bad rate. I've got a 4.185% on a 90K 30 year mortgage (that's 5 years old). I suspect even if you had 20% equity - you might have trouble finding a lender who will bother with the 55K loan - and if they are willing to give you alower rate they will want more up front in the form of cost to do the loan.

I was looking to do a cash out refi on a rental I owe 23K and it has a value of about 120K - I wanted to borrow about 80K and no one wanted to talk to me about doing it. I was able to get a brand new 150K loan on a rental property though (in the same area as the rental I wanted to do the refi on).  That loan has the best rate I've ever had - 3.625%    ::shrug::

How far into your current mortgage are you? Are you trying to lower your payment?

You might just need to be persistent and keep after the mortgage lenders until you find one who will talk to you about the refi.    Just do the math - as a refi might not achieve what you want (it may cost more than your current mortgage). 

My fear is that it would cost more to refinance than to stay the course. I also don't want to waste a lot of time for nothing.
I am 8 years into my current mortgage. The original mortgage was 2008 but I refinanced in 2012 through HARP

[Ava]

May 16, 2020 16:16:00 GMT -5 jelloshots4all said:

Check out rocket mortgage.  My friends refied right before the shit hit the fan with them.

I'll check them out, thanks.

[Ava]

May 16, 2020 20:39:57 GMT -5 Lizard Queen said:

You've been there a while. Could you swing a 15 year?

I don't know if it's worth it or if any company would want to refinance.
The idea is to lower monthly payments, but I don't think it's in the cards for me.
No biggie, I can handle the mortgage. Just wanted to see if I can take advantage of the current lower rates.

[justme]

Condo rates aren't actually down to 3.3 When regulart mortage rates were around 3.5 the best a condo got without buying points was 4% - and that was with a LTV rate of around 76%. I refied with 80% and only got 4.5% without a buy down - though that was with cash out.

Your currently LTV is less than the conventional which starts at 95%. And you have a very low value loan - a lot of places won't even write a mortgage that low. 

Honestly, I'd say your odds aren't good. 

[Rukh O'Rorke]

Given the info here I think you'd be hard pressed to get something where you would come out ahead financially given closing costs.

If 2 places turned you down, I'd take that as the most likely response. And terms may not be as good as what you are seeing anyway, as justme indicated.

[plugginaway22]

I am amazed at your low condo value, aren't you in the northeast?  

[Deleted]

May 17, 2020 9:44:38 GMT -5 plugginaway22 said:

I am amazed at your low condo value, aren't you in the northeast?  

Right?  You can't get a condo in small-town MN for that. 

[Deleted]

Aren't you still planning on moving soon?  I think the break even point on a mortgage that small would be quite a few years out since you're probably not paying a lot in interest every month now as it is.   

[HoneyBBQ]

May 17, 2020 10:11:19 GMT -5 minnesotapaintlady said:

Aren't you still planning on moving soon?  I think the break even point on a mortgage that small would be quite a few years out since you're probably not paying a lot in interest every month now as it is.   

Agree you have to run the numbers yourself.

I just refied our mortgage to a 15 year 2.75%. It'll pay for itself in 1 year, which was my threshold for clicking "yes".

[haapai]

Your situation is somewhat similar to my own.  I currently owe a hair under $40K on a house that I bought for $46.9K in late 2010.  My current mortgage rate is great -- 3.75% with a .25% mortgage insurance premium that will drop off when the principal goes below 80% of the sale price of the house.  Unlike you, I almost certainly have 20% equity in the home and room to roll the refinancing costs into the new mortgage without going over 80% LTV.  (I rolled some of the financing costs into the original loan and landed up with a loan that was over 100% LTV, for those of you who are doing the math and scratching their heads.) 

I was looking at refinancing and building all sorts of spreadsheets last fall and winter but never actually picking up the phone and asking a potential lender what their refinancing costs were. 

When I finally screwed up my courage and asked my credit union what they would be, they answered quite quickly -- $2200 and the number was so much higher than I expected that I didn't have the breath to inquire as to whether it included all appraisal fees and pest inspections required to get a new mortgage. 

What I am trying to say here is "don't be me".  When refinancing costs rolled into the new mortgage are 5% of the value of the property, it takes a hell of a big drop in the interest rate to reduce the monthly payment and payback periods are looooooooong even when you assume that everything that you no longer spend on your mortgage will be invested at a healthy return. 

[Ava]

Yes, I'm not going to pursue it anymore.

It doesn't seem feasible. Fortunately my mortgage is low so I will plug along.

[haapai]

I think that you should still build the spreadsheets.  They can tell you a lot if you know how to build them and manipulate them.  It can be depressing as hell to discover that you need a 3.25% 30-year and an 8% percent return on investment for seven years to break even, but once you have figured that out, you can breathe freely. 

Also, doing the calculations now is a great way of identifying future opportunities.

Another thing to keep in mind is that your stated plans to retire relatively young and move to a place with a much lower cost of living mean that you may be able to escape a whole lot of taxation permanently by using traditional IRAs and 401(k) skillfully.

[Deleted]

May 20, 2020 16:01:31 GMT -5 haapai said:

When I finally screwed up my courage and asked my credit union what they would be, they answered quite quickly -- $2200 and the number was so much higher than I expected that I didn't have the breath to inquire as to whether it included all appraisal fees and pest inspections required to get a new mortgage.  

That's pretty awful.  We had a Wells Fargo mortgage for the house we bought in 2003 and out of the blue they offered us a refinance with no closing costs around 2007-not sure of the year.  I was suspicious but there really were no closing costs and the interest rate was lower.  We took it.  Mortgage balance was somewhere around $150K, though.  I guess they didn't want us to go elsewhere.   

My current mortgage balance is at $72,000, which is about 1/3 the value of the home but I haven't even tried re-financing (currently 15-year fixed at 3%).  Before COVID-19 hit I was getting mail solicitations that were a joke- they all included cash-out to bring the loan balance up to $100K (woo-hoo!  I can buy me a shiny new truck!) and the monthly payment still went down because the payoff date was now in 2050 (when I'll be 97) instead of 2030.  No, thanks.  

[Deleted]

May 22, 2020 6:41:45 GMT -5 @athena53 said:

May 20, 2020 16:01:31 GMT -5 haapai said:

When I finally screwed up my courage and asked my credit union what they would be, they answered quite quickly -- $2200 and the number was so much higher than I expected that I didn't have the breath to inquire as to whether it included all appraisal fees and pest inspections required to get a new mortgage.  

That's pretty awful.  We had a Wells Fargo mortgage for the house we bought in 2003 and out of the blue they offered us a refinance with no closing costs around 2007-not sure of the year.  I was suspicious but there really were no closing costs and the interest rate was lower.  We took it.  Mortgage balance was somewhere around $150K, though.  I guess they didn't want us to go elsewhere.   

My current mortgage balance is at $72,000, which is about 1/3 the value of the home but I haven't even tried re-financing (currently 15-year fixed at 3%).  Before COVID-19 hit I was getting mail solicitations that were a joke- they all included cash-out to bring the loan balance up to $100K (woo-hoo!  I can buy me a shiny new truck!) and the monthly payment still went down because the payoff date was now in 2050 (when I'll be 97) instead of 2030.  No, thanks.  

I know you said you don't remember the year exactly, but this sounds like the HARP refis that they were doing in the last recession.  Chase offered me the same deal.  I told DH that they wanted to include "sure things" in the numbers they reported refinancing to the government at the time.  Not only was I on-time, I was adding to principal.