The ethics of disclosure to someone you’re doing business with are complex. If the lender needs more information to make a decision he usually asks for it. I feel there is very little of significance I can possibly hide for a lender, including “sketchy credit.” The problem with a transaction like this is that the information disparity between the two parties is usually so huge that it borders on impossible for the typical borrower who isn’t shopping multiple lenders at the same time to get a fair deal.
Unless your report is impeccable, let a lender run it to determine if there are any issues that may have an impact on financing
Many lenders are not willing to front the costs of an appraisal for exactly the reasons you outline. Even with no-cost refinances I’ve done, I’ve paid for the appraisal and other costs up front, and then as long as the loan goes through, the lender reimburses them to me. That seems like a fair way to do it to me.
We were burned this way on at least one of the two refinances we did back in medical school. You’re hardly paying anything toward principal in the first few years of a 30-year mortgage anyway. Once you start adding costs back onto the loan, you’ll really be rowing upstream.
A. True no-cost refinance to 3.5%. Lender pays interest for last half of month ($500), funds new escrow account ($1400) and all fees ($1900).
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Pros of a 15 year mortgage- Much less total interest paid overall Psychological effect of being debt free Minimizes fixed expenses later/improves cash flow later- allowing for financial misfortune, part-time work, or early retirement Lower rate (usually about 1/2%) Forced savings Safer from foreclosure sooner
This is nowhere near a no-cost refinance. I didn’t know your county, so I picked a random one, but a quote at Amerisave shows a much higher rate 4.875% with $16k+ in closing costs. Your deal looks a lot better than that. You’re paying about $3K in closing costs and getting 3.625%. I’d get a few more quotes though. It wouldn’t surprise me if you could do better. But even if you can’t, this is probably a no-brainer for you. You’ll be dropping over 2% off the loan.
Overall, $3K in closing costs are being added to the loan balance
Joe: I’m in the process of looking to refinance 4 rentals and our occupied home. If you play your cards right, you will absolutely get the best deal by working with a single company. I can say this from experience as a customer and experience, albeit short, as a mortgage originator, which was the most awful job I ever had. Also, consider the HARP 2.0 program if you have property that’s under water. I’ll be closing a refi on a property on Saturday, which I owe 65k and has a value of 20k. The refi is clear to close. It’s much easier than the traditional refinancing process. Let me know if you have any other questions and I can try and help.
Assumptions aren’t worth the calories spent to make them. It’s perfectly fine to let a lender run your credit. You’ll get a more accurate assessment and rate. While credit scores play a role in rates, credit history plays an even bigger role in overall eligibility. It’ll give you time to address issues in advance if there are any.
“When you’re ready to proceed with your loan, call up the few brokers that are competitive and tell them you’re going to lock your loan with someone in the next hour. Ask them for their best and final offer. By doing this, you’re comparing apples to apples.”
Overall, it’s a decent article. But I caution readers to fully research and understand the context surrounding any claims about a borrower’s experience before making assumptions about the borrower or lender. And I suggest that borrowers and lenders strive to create mutually beneficial transactions, not tit-for-tat attempts to manipulate an already complex and often exhausting process.