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Refinance Runaround
Old 09-15-2010, 12:13 PM   #1
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Refinance Runaround

My husband and I just early retired. We moved into a rental home we've owned for 7 years. We're just a couple of years away from getting pensions & Social Security, but we're living off what we feel is a substantial amount of savings. Now we're trying to refinance our 5.875% 30-year 90,000 fixed mortgage and getting the "refinance runaround". Our current lender and banks won't touch us because we don't have regular income, and haven't lived off our savings long enough yet. We have over $70,000 equity in the home, and good credit. We couldn't refinance when we were working since it was an investment property then. Any suggestions?
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Old 09-15-2010, 12:17 PM   #2
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How about just don't refi and just pay it off with savings after you start getting SS and pensions?

If the 70k is not a big % of your NW I would save the refi fees and just pay the sucker off in a couple of years if it was me.
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Old 09-15-2010, 12:22 PM   #3
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+1 - such a small loan (90K) would be a waste of time & $$ (escrow/title/points/fees) to refi IMO. Pay it off early to save interest expense & be done with it.
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Old 09-15-2010, 12:25 PM   #4
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I'd wait a couple years and see what happens in retirement. This is the start of a whole new era in your lives. In two years you might decide to pull stakes and move to another area for whatever reason. Even if you lower your interest rate by 1% you aren't going to save that much in the payment. And as cardude says, save the refi fees (which could approach $3000). I wouldn't make too many moves at once. Let retirement sink in and enjoy it.
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Old 09-15-2010, 12:30 PM   #5
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Have you looked at a home equity loan instead of a mortgage? Penfed product has no closing costs, but do have 20 yr ammort.
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
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Old 09-25-2010, 12:25 PM   #6
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Our refi is finally getting pushed through (Well, at least that is what the bank says). About 2 months ago I started looking at our refi options and decided on a broker. I told them we were refinancing a rental property and so we were penalized a couple of pts and ended up with a 4.625% 30 yr fixed rate. We provided all of the information requested and prior to leaving on vacation, everything seemed to be on track. Well, after getting back in the states 3 weeks ago, its been like pulling teeth trying to get an answer to what the problem was. Turns out, our tax free disability payments were not being counted towards our income, making our debt to income ratio too high. They also would not count as income current year rental income, they would only count rental income that appeared on prior year income tax. Not good, when we just bought the place in July 09 and didn't start renting it until Oct 09. Can't wait to get the bank rep and broker off my speed dial/contact list.
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
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