can someone explain the refi process?

[pugz]

A MM post, holla!

Can someone breakdown how a mortgage refi typically works? We bought in 2009 at 5%, not bad at the time, but seeing the lower rates, I sometimes think we should look into it.

Especially interested in what kind of money one has to bring to the table to do it. We have worked hard to build up our e-fund/savings to a certain number and kind of don't want to touch it now

[je55]

Research lenders, get quotes, find the best rate.

You will probably need an appraisal (out of pocket), and a lot of the fees can be rolled into the mortgage if that's what you choose. Some lenders offer low / no fee refi's and lender credits.

I'm no expert, but having just gone through the process, these are the steps we took.

[libbride]

We went through the same mortgage broker we originally used.

We did have to get an appraisal and then go through all of the closing paperwork again. We had to bring some money to the table. I think we had to bring about $2500 to the table.

[ssmjlm]

We refied through our current lender due to PMI ish. I called filled out the paperwork and ten they scheduled the appraisal and closing. We did have to pay cc bc we barely hit the refi amount due to losing value but it was pretty easy. Took about 45 days for the whole thing.

[acceptthegood]

First, get your balance on your current loan, add about a few thousand for closing costs (this will vary by lender, your loan amount and whether you escrow your taxes and insurance) and find out how many years you have left on your loan.
Then go to www.bankrate.com/calculators/mortgages/amortization-calculator.aspx
and plug in your new loan amount, term you want (30 years?) and current interest rates (3.875% or so for great credit). This will give you a new principal and interest payment, add in your amounts for taxes and insurance.
If you have less than 20% equity, you'll have to pay PMI.
You shouldn't have to bring money, but it depends. And when you refi, you skip a monthly payment.
Or, if you want to post some details, or PM me, I can run some numbers for you. I was loan officer for 11 years, but I've been out of the biz for 5 years.

[jenjen]

You could reach out to your current lender to see if they offer a streamline refi which I think is pretty cheap. We're just starting the refi (from 4.75 last year to 3.875) on a 30 yr. e are paying closing cost of appox $2800 but we are cashing out some equity, dropping PMI and not escrowing our property taxes and insurance anymore. This is based on our appraisal though so the final numbers could change.

[monpetitchou]

You will have to pay closing costs just like you did when you bought the house. How much is your house worth compared to what you owe on it? Standard refi's require at most 80% loan to value, so if you owe more than that you might have to pay down your principal to get there. There are a bunch of programs to get around this (HARP, etc) but you'd have to check to see if you qualify. I just refied through HARP 2 and the loan had to originate pre-2009 I think, but you should definitely double check those programs if you need them.

[pugz]

the county appraisal that came back this year had the house value down to like 148k I think? Pretty sure we are not at 20% equity yet as we've only owned for 3 years now and have an FHA loan. Since it's all lumped together and we do auto-bill I can't remember off the top of my head where we are with PMI and principal and all of that. Will have to check that out.

I should probably delegate this to dh as I am already doing way too much before baby comes It would be nice to have a lower mortgage payment though since we are essentially going to be living on one income after baby arrives. Whatever I earn will pretty much just go to daycare.

[ohgillian]

I think that the process can vary depending on the route you take.

Like JenJen said, I would start with your current lender. They may have a program like we just got into, where there are no closing costs or fees, etc.

Even if your lender doesn't have a program like that, it's pretty common (I think) to be able to roll all of your closing costs into the new mortgage. So the actual principal of the mortgage might be a bit higher than your current principal, b/c you'd be adding the closing costs to it. But the benefit is that you can avoid out-of-pocket costs.

So even if you don't think you have cash on hand, it's definitely worth at least a call to your lender and credit union or bank. When you call, you should have on hand: current principal balance; current monthly payment; current rate and term.

[pugz]

we were spoiled when we bought our house, didn't have to pay closing costs, inspection, or appraisal. Dude was *thisclose* to foreclosing and we got in at the right time and got a great deal since he was desperate. Plus we got the first time homeowners tax credit.

[willrun4wine]

Call your current lender and see if you qualify for harp. I just got a call saying i qualify (i didn't before, not sure what changed) and we are looking to do a 15 year at 3%. Our payments will be about 140ish more, but worth it when you see how much interest you save.

Good luck!