Pen Fed Refi Completed
I signed all the paperwork on a Pen Fed refi mortgage less than an hour ago and figured I would report. On 9/30/09 I locked a 3.875% 5/5 ARM for 1/4 point. Since then I have been submitting docs, etc. Most of the heavy lifting was done in the first couple weeks, and the only thing that dragged on was me getting my hands on a copy of my updated HELOC agreement (Schwab agreed to resubordinate my zero balance HELOC without any argument). Pen Fed wanted a lot of documentation, but I was able to submit everything electronically (email) and the process was pretty simple. I suppose that it was probably a lot easier for me than it might be for others since this loan was a layup for them (sub 45% LTV, more than enough W-2 income to qualify from an employer that cannot go out of business, ample assets, a chunk of money in CDs with Pen Fed, etc.).
In sum, the process was pretty easy. Pen Fed also ate a bunch of the costs of the loan, since I am a new mortgage customer. All-in cost was $1750 on a $157k loan, and that includes the 1/4 point. Since this is an adjustable rate loan there are a lot of possible scenarios that coud influence my ultimate return on the refi, but with my assumed prepayment schedule and assuming that the loan resets to the max it can go in 5 years (5.875%), it works out to an 18% IRR on the $1750 I invested in the loan costs plus my minimum mortgage payment has dropped by $1100/month.
Based on this experience, I would recommend Pen Fed for a mortgage if their programs/rates work for you.
"Neither my companion or I carry firearms on our persons. We depend on the goodwill of our fellow man and the forbearance of reptiles."
- English Bob