Help with how to refinance? Updated

[moneyguidance]

Hi all. I'm a regular, but want to ask more in-depth money questions, so wanted to make this account so I could feel comfortable with numbers.

I've been dragging my feet on the refinance process because I've been busy and wasn't sure where to begin and honestly didn't want to deal with the stress of paperwork.

I reached out to the person that my husband and I got our mortgage from a few years ago. But I see other posts here talking about rates they've found. So I guess it's best to shop around, correct? If so, how does one go about that?

Right now the mortgage person is asking me for information like how much in taxes we owe and how much our home is worth....and I just don't know the answers to those things off of the top of my head. I thought maybe he'd be able to pull our credit and give us interest rate options and then do more in-depth with the process, but it seems like maybe not?

So any guidance on how to shop around to get interest rate options in the most straight forward manner?

Thank you!

[tealblue]

I would start by going to a few of the sites that have been mentioned in the previous post. I recall costco finance was a big one and lenderfi (I think?) and put in your approx mortgage value and whatever they ask for.

If you don’t know your property tax amount, you can generally google your county name + assessor office or + tax and it’s almost always searchable by name or address. Look through to find your annual property tax amount. Some people don’t include this in their mortgage payment (called escrow) and sometimes you can opt to pay it yourself.

For your home value, this is just going to be a rough guess- either by looking on Zillow to see what similar houses in your area are selling for or being listed at. Don’t look at the Zillow value as it’s not always helpful on your particular property. If you bought within the last 10 years, your property has likely increased in value (generally).

It’s hard to help without a lot of information, but hopefully this starts you on the right path. There’s a lot of info to sort through- make sure you compare interest rates along with closing costs. It doesn’t always make sense to pay thousands in closing costs just to drop your interest rate a little. Or to reset the life of your loan- for example, if you bought 5 years ago with a 30 year mortgage- you owe for the next 25 years. It might not be in your best interest to start over and get another 30 year mortgage. Maybe you could afford 15 year or a 20 year. Or maybe it does make sense to do a 30 year. There are a lot of variables and it is overwhelming but if you get quotes, I’m sure the posters here would help you analyze and determine what is the best option for you.

You will need to get your current rate, current payment, and how many years are left on your current loan to do a good analysis.

[k3am]

I wouldn't let them run your credit until you're ready to select a lender. You don't want extra credit pulls if you can avoid it. I'd log into creditkarma, your bank, your credit card, wherever you have that offers you a credit score estimate, and work off that, knowing that it may not be exactly right. But if you know you have excellent credit, it's likely somewhere in that range.

You will need all the information he's looking for to close a refinance. Find your documents, look them up, and save them somewhere accessible.

We worked with a mortgage broker, looked at big banks, and searched online. Surprisingly the big banks were the best bets for lower rates in our circumstances.

[moneyguidance]

Aug 12, 2021 12:09:14 GMT -5 k3am said:

I wouldn't let them run your credit until you're ready to select a lender. You don't want extra credit pulls if you can avoid it. I'd log into creditkarma, your bank, your credit card, wherever you have that offers you a credit score estimate, and work off that, knowing that it may not be exactly right. But if you know you have excellent credit, it's likely somewhere in that range.

You will need all the information he's looking for to close a refinance. Find your documents, look them up, and save them somewhere accessible.

We worked with a mortgage broker, looked at big banks, and searched online. Surprisingly the big banks were the best bets for lower rates in our circumstances.

Yes I know my credit score generally.
I think that’s my question- you mention that you looked in to big banks, searched online and a mortgage broker, so did they give you info about rates before you gave them all the info that he’s asking for?

I guess that’s where I’m confused. How do I actually shop around and compare rates without credit getting pulled or knowing exactly how much my house is worth? Or I do indeed need to know the info he’s asking for (property taxes, how much the house is worth, etc) and give it to each company to get rare offers?

[k3am]

We gave them a general estimate of what we thought the house was worth, on the low end of things. We estimated it was worth about 80% of what comparable sales were going for - We didn't want to be in a siutation where the loan was contingent on an appraisal value and the house appraising for less than we anticipated.

Honestly though, I think most places were able to give us a quote based on the estimated value, loan amount, and a general idea of what our credit score was. Property taxes will really just give them the assessed value, which doesn't always indicate property value.

[moneyguidance]

Aug 12, 2021 13:06:53 GMT -5 k3am said:

We gave them a general estimate of what we thought the house was worth, on the low end of things. We estimated it was worth about 80% of what comparable sales were going for - We didn't want to be in a siutation where the loan was contingent on an appraisal value and the house appraising for less than we anticipated.

Honestly though, I think most places were able to give us a quote based on the estimated value, loan amount, and a general idea of what our credit score was. Property taxes will really just give them the assessed value, which doesn't always indicate property value.

Ok wonderful, this is very helpful.
I’m going to use the lenderfi website that was recommended above and follow up with the mortgage broker to see what he says about his rates and then pull the trigger to go with one of those options.
Thanks again.

[fryjack2]

We had an agent that we have used for the last decade. I reached out to him.

We refinanced last year and our broker couldn't beat the rate of a broker someone on here gave me the name of. I reached out to him.

Another local to me poster posted an even lower rate recently. I asked for her broker's info and reached out to him.

Compared all the rates and asked if it was the best they could do.

We are using the broker we re-fi'd with last year because he had the best deal.

Do you use facebook? I would post on there that you are interested in refinancing and asking who people used and what rate they were able to get. Then reach out to those people.

[wildrice]

I am working with Lending.com through Costco. I haven't closed yet but we're in underwriting right now I think.

I think they want that info so they can estimate your monthly payment. Assuming you escrow, they will need your tax/insurance amounts to give you an accurate estimate. It's probably fine at this point to just ballpark it. I think they want to know the value of your house for the same reason - they would want to know if you have to pay PMI for having less than 20% equity in the house, and I think the amount owed can actually affect the interest rate (like if you have a high priced home vs a low priced one).

[pinkalicious]

Are you still in contact with your Realtor? He or she likely has a relationship with trusted lenders they could recommend to you. They also should be happy to look at comps and give you an idea of value. At least I know I am for my clients (anyone really!)

[moneyguidance]

Thanks again for all the help.
I finally got the ball rolling and spoke with the mortgage broker.
And it got approved without getting an appraisal done, so he said we should all go play the lottery because he hasn't had many go through without an appraisal.

So he quoted me:
15y 2.25%
20y 2.75%
30y 3.0%

These are all much better than our current rates, so that's good. I think we're going to go with the 20y, but the 30y is tempting because it'd bring our payment down about $700 to $1650, whereas the 20y payment is $2003, so not as much monthly saving, but shaving 10 years off. I doubt we'll be in the house for more than 10 more years though, so decisions decisions.

[jlt19]

Aug 20, 2021 11:52:40 GMT -5 moneyguidance said:

Thanks again for all the help.
I finally got the ball rolling and spoke with the mortgage broker.
And it got approved without getting an appraisal done, so he said we should all go play the lottery because he hasn't had many go through without an appraisal.

So he quoted me:
15y 2.25%
20y 2.75%
30y 3.0%

These are all much better than our current rates, so that's good. I think we're going to go with the 20y, but the 30y is tempting because it'd bring our payment down about $700 to $1650, whereas the 20y payment is $2003, so not as much monthly saving, but shaving 10 years off. I doubt we'll be in the house for more than 10 more years though, so decisions decisions.

If you don’t plan on staying in the house, I would probably do the 30yr.

[moneyguidance]

Thanks again everyone! The info here was very helpful.
We were approved with no need for an appraisal so that was nice.
Were able to lock in a rate of 2.85% and decided to go with the 30 year option so have a little wiggle room with how we want to use/save the "extra" money.

I have a question about financing for a home repair, but I think I’ll just start a new post