PenFed offering no-cost refi

[cons]

Just thought I'd post it here on the forums in case anyone was planning to refi in the near future.

PenFed is offering a NO-COST refi on their 5/5 ARM and 15 yr FRM.

I applied a couple of days ago for the 15 yr which is fixed at 4.25%. They sent me an email stating that the closing may take as long as 90 days (mainly due to the high volume of customers that are taking advantage of this deal).

It seems like a true no-cost refinance.

https://www.penfed.org/productsAndRates/mortgages/mortgageCenter.asp

This no-cost refi would save us over $6K in closing costs (I live in NY where the closing costs are some of the highest in the country) if everything eventually gets approved and goes through smoothly.

Our current loan is a 30 yr FRM at 6.75% (purchsed the house in summer of 2006 when rates were trending upward).

There are some restrictions that need to be meet in order to qualify for this deal (at least 80% LTV, must use their title company and appraiser, etc). We're doing a 'cash-in' refi so we're not concerned about the appraisal or meeting the 80% LTV (we should eventually be at around 40-50% LTV after the paydown).

Hopefully others can take advantage of this deal before it's dead.

 

[jblack]

they've had this promotion (or a close variation) for quite awhile. the big thing to not overlook is that the FRM carries a 1% origination fee.

still a great deal if you qualify though....DW and I just completed our refi with them in Nov

 

[MooreBonds]

Just thought I'd post it here on the forums in case anyone was planning to refi in the near future.

PenFed is offering a NO-COST refi on their 5/5 ARM and 15 yr FRM.

I applied a couple of days ago for the 15 yr which is fixed at 4.25%. They sent me an email stating that the closing may take as long as 90 days (mainly due to the high volume of customers that are taking advantage of this deal).

It seems like a true no-cost refinance.

https://www.penfed.org/productsAndRates/mortgages/mortgageCenter.asp

This no-cost refi would save us over $6K in closing costs (I live in NY where the closing costs are some of the highest in the country) if everything eventually gets approved and goes through smoothly.

Our current loan is a 30 yr FRM at 6.75% (purchsed the house in summer of 2006 when rates were trending upward).

There are some restrictions that need to be meet in order to qualify for this deal (at least 80% LTV, must use their title company and appraiser, etc). We're doing a 'cash-in' refi so we're not concerned about the appraisal or meeting the 80% LTV (we should eventually be at around 40-50% LTV after the paydown).

Hopefully others can take advantage of this deal before it's dead.

I locked into their 5/5 ARM at 3.375% with 0.125 points when their "no cost" refi first came out.

HOWEVER...I had an unpleasant surprise when they started sending me the correspondence and cost estimates, with closing costs of around $1,500. I pointed out to them that the offer I signed up for was their "no closing costs" offer. Their response was "you have to have a minimum mortgage balance of roughly $280,000" to qualify for no closing costs on refis!!!

I balked, and asked them where that was stated, since they had very few 'conditions' for their "no cost refi" offer. They pointed to the "existing PenFed Mortgage customers restrictions apply"...which conveniently doesn't say anything more. I don't know if this only applied to PenFed existing products (my existing product was a PenFed Home Equity Loan, not a mortgage), or any Refis.

Bottom line - they're hitting me up for an extra $1,200 or so in closing costs/fees, which they're letting me roll into my mortgage balance to make it a no-cash-closing.

Oh, and one other nasty surprise: they told me that their ARMs don't qualify for bi-weekly payments.

Other than that, I still get a good product, and will have it paid off in 10 years or less.

 

[ronocnikral]

i got the same 90 day email. but...things seem to be progressing nicely. already have the appraisal done....

 

[cons]

they've had this promotion (or a close variation) for quite awhile. the big thing to not overlook is that the FRM carries a 1% origination fee.

still a great deal if you qualify though....DW and I just completed our refi with them in Nov

Actually, that's what's different in this promo.

They'll pick up the 1% origination fee as well. This is a true no-cost refi.

I've confirmed this with PenFed numerous times via email and calling them to make sure this is the case. They stated that the only items I'd have to pay at closing would be to fund an escrow account (if you plan on having one) for taxes and insurance. This won't affect me as I won't have an escrow account.

You must have a fairly good rate if you closed last November, as that was probably the lowest rates got (they've only been rising since then).


Moorebonds, PenFed has sent me a 'credit disclosure statement' which outlines specifically what boxes they will reimburse on the GFE.

There are certain restirctions to getting this no-cost refi...I believe that having an existing PenFed loan may disqualify you for this promo...not 100% sure though.

My current mortgage is with Citibank. I'm glad to be leaving them. I've heard nothing but good things about PenFed. The only thing that sucks is that I'll have to wait almost 90 days before closing (mainly due to the huge influx of applications for this no-cost refi promo).

 

[jblack]

...They'll pick up the 1% origination fee as well.
..
There are certain restirctions to getting this no-cost refi...I believe that having an existing PenFed loan may disqualify you for this promo...not 100% sure though.

When we first joined PenFed in 2008 during the purchase of our current home there were no origination or closing fees for any of the loans. Later in the year they instituted the 1% fee on all FRM but still picked up most of the closing costs for new customers.

It sounds like they have gone back to the prior policy but haven't updated their mortgage rate page that still states all FRM have the 1% origination attached. A bit confusing for the 15yr promo but great to hear it's available for those that know about it and qualify.

 

[cons]

Just some FYI,

The rates for this promo have recently been reduced.

15yr fixed refi rate is now at 4.125%

I'm working with Penfed to try to get this lower rate (originally locked in at 4.25%) and will see how accommodating they are to my request.

 

[jblack]

Good luck....I tried the same after we had locked our rate and they wouldn't budge unless we were willing to pay a rate-adjustment fee of 0.5 pts. At first I was annoyed but soon let it go as I was still getting a great rate and I had, after all, previously agreed to the terms.

I'm sure in a falling rate market they get this request a hundred times a day.

 

[ronocnikral]

closed on our's friday. moved along quite quickly, and i am pleased. now...where to put that extra $200/month?

 

[cons]

When I asked about trying to lock in the lower rate (4.125) PenFed advised me that I would have to pay 5/8 points to get the lower rate. I did the math and I would break even in ~10 years....wasn't worth to pay the 5/8 points to get the rate down only 1/8%.

Also, I believe the no-cost refi promo is now dead.

However, FWIW their rates have dropped again (15yr fixed now at 3.875%).