Originally Posted by 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.
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.