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Refi Question for all you Mortgage Gurus
Old 10-01-2006, 05:18 PM   #1
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Refi Question for all you Mortgage Gurus

Hello, all. Well I finally retired and moved to Florida. After 8 months here, I am considering refinancing my mortgage.

I currently have a $537,600, 5/1 30 yr. ARM @ 6.25%, which I have had for 18 months. It's interest only for the first five years and can adjust a max of 5% at five years, and 2% every year thereafter. It's capped at 11.25%. I know this is not a good loan, but I took it because it was all I could get at the time due to other real estate I owned. I have since sold some of the other properties.

I'm thinking of refinancing to a 30 yr fixed in order to lock the rate and start paying principal. Rates on these loans seem to be about 6.25% right now. I live in Florida and will have to pay about $3,000 in tax stamps to make the move.

Am I better off doing the refi or sticking with the loan I have and making additional payments to start paying down the principal, and/or using the $3K I would have paid in taxes to pay down my current loan? I intend to stay in the property for at least 10 years.

Any other ideas?

Thanks very much for your help,

Patrick
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Re: Refi Question for all you Mortgage Gurus
Old 10-01-2006, 06:11 PM   #2
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Re: Refi Question for all you Mortgage Gurus

I would refinance.

Any chance that your current lender would amend your loan to a fixed rate loan? It would save the mortgage registration tax. May be possible if your loan was made in house at a financial institution.
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Re: Refi Question for all you Mortgage Gurus
Old 10-01-2006, 07:07 PM   #3
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Re: Refi Question for all you Mortgage Gurus

The original lender is the one I asked first. She told me I would have to pay the tax stamps. But I'll ask her again.

Thanks,

Patrick

Quote:
Originally Posted by Martha
I would refinance.

Any chance that your current lender would amend your loan to a fixed rate loan? It would save the mortgage registration tax. May be possible if your loan was made in house at a financial institution.
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Re: Refi Question for all you Mortgage Gurus
Old 10-01-2006, 08:11 PM   #4
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Re: Refi Question for all you Mortgage Gurus

Quote:
Originally Posted by Patrick
I'm thinking of refinancing to a 30 yr fixed in order to lock the rate and start paying principal.
Am I better off doing the refi or sticking with the loan I have and making additional payments to start paying down the principal, and/or using the $3K I would have paid in taxes to pay down my current loan? I intend to stay in the property for at least 10 years.
Any other ideas?
Refinance, man. Once you pay down the principal on the IO loan you can't get it back (and you can't change the payment). It's far easier to refi to a fixed loan that gives you 30 years of certain payments. Once you have a 30-year loan, you can make the decision to convert it to a 24-year loan (through biweekly payments) or even a 15-year loan (by paying additional principal). Banks won't let you go in the other direction.

Ask the mortgage company if they'll amend the note to reflect 30 years fixed at 6.25% without additional asset documentation or new title insurance. If they do that-- or, at worst agree to "reissue the title insurance on the new mortgage"-- it'll reduce your financing fees.

I'm not a mortgage broker, but apparently "reissue the title insurance on the new mortgage" is the secret code for "gimme a 30% discount".
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Re: Refi Question for all you Mortgage Gurus
Old 10-01-2006, 09:25 PM   #5
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Re: Refi Question for all you Mortgage Gurus

I would refi in your case, but I am very biased about ARM's.

Check with Quicken Loans, and see if they still have their 30 year interest only option [at your choice, interest only for the first 10 years (we amortized anyway), then amortizes as normal over the next 20 years ... at a fixed rate of interest set from day 1.] Very flexible, and was low cost.

We used:

Ms. Christine (Christine) Rosender,
Mortgage Banker
Quicken Loans

Toll-Free: 800/226-6308
Extension: 55068
FAX:: 734/805-0274
SMTP:: christinevandenbergh@quickenloans.com
URL:: www.quickenloans.com
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Re: Refi Question for all you Mortgage Gurus
Old 10-03-2006, 12:59 AM   #6
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Re: Refi Question for all you Mortgage Gurus

We received a letter today solicitating refi mortgage business. The funny part was the endnote in small print. I shall attempt to transcribe it accurately: " Columbia Trust Company Reno, NV 89501 is not endorced, nor affiliated, nor associated with BOEING EMPLOYEES CU and the solicitation was not authorized by BOEING EMPLOYEES CU . Your loan information was obtained form(sic) county records, not from BOEING EMPLOYEES CU. Columbia Trust Company may not be licensed in your state and you may have received this letter in error. We do not conduct business in states we are not licenced."

The top of the letter, in large print "Lender: BOEING EMPLOYEES CU"

We are not members of BOEING EMPLOYEES CU, have no mortgage with them, nor have we ever worked for Boeing. I wonder how many people read the small print...
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Re: Refi Question for all you Mortgage Gurus
Old 10-03-2006, 09:51 AM   #7
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Re: Refi Question for all you Mortgage Gurus

Quote:
Originally Posted by Brat
We are not members of BOEING EMPLOYEES CU, have no mortgage with them, nor have we ever worked for Boeing. I wonder how many people read the small print...
Maybe 3%.................
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Re: Refi Question for all you Mortgage Gurus
Old 10-03-2006, 11:19 PM   #8
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Re: Refi Question for all you Mortgage Gurus

Around here (MD), we only pay tax stamps when name on title changes, but if it's really gonna cost you $3k to refinance, I would keep what you have and make additional payments until something better comes along.
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