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Main house refinance update- please give thoughts

June 11th, 2014 at 04:00 pm

HI all,

Refinance update. My 'failsafe' loan option officially fell through. No way to get the FHA Back to Work Loan in 1 year. that is out so I have to get a 'softer' loan than my current 12% loan but w longer term.

I need a bridge loan for 3 years to hold me until I can get an FHA loan under normal guidelines

Broker called.. he thinks he can get 8.25, 3-4 points, 3 year term, 30 year amortization. He will get more detail tomorrow.

4 points is $12000, loan costs unclear at this point but a few thousand.

My payment would go down $739 a month and I would be putting $200 (average) a month towards the principal.

Let's say total costs of loan are $15k. I would make that up in approx 16 months.

My current loan ends in 1 year 6 months so have to get out of it at some point.

My plan
1. clarify details, see what the barebones offer is and ALL costs
2. compare that to the costs of keeping the loan
3.evaluate if it is likely I can get anything better
4. talk to current lender.. and see if THEY will do a similar loan for 2-3 points (saving points and closing costs)

4 Responses to “Main house refinance update- please give thoughts”

  1. Another Reader Says:

    I would not spend the upfront money now to get only a three year term. You have 18 months to figure this out. In your shoes, I would keep looking and put that loan aside for now. The mortgage finance market has loosened up and will probably continue to do so. If things haven't improved in 10 to 12 months, I would look at it again.

  2. creditcardfree Says:

    I agree with Another Reader...you need a better rate, no points and a much longer term loan.

  3. LivingAlmostLarge Says:

    Wait it out and see where your credit and market goes. Why is the rate so bad?

  4. Rachael777 Says:

    HI all I will post another update today (if I hear from the broker) but this is the situation. I can not get a bank loan w a foreclosure so soon(case closing this month). I have to wait a year for FHA (via special loan 'back to work' loan) to do a PURCHASE. and 3 years w FHA (no special loan) for a Purchase or Refinance. Conventional is 7 years. The loan I have now took some creativity to get and I thought I could do the same for the back to work loan to make it a 'purchase'. I spoke to the king of creativity and he poked a few holes in my case that I simply can not fix..so that loan option is closed (for now.. ). All other bank loans are closed too per the above for 3 to 7 years. I can not et a loan with no points, do not want a longer term loan (of this type they raise the rates as the term extends, and can not get normal rates). The only option is hard money or private investors. I am not going to get 3-7% from them. I jsut am not and I do not think this is going to change. IT appears to make my best option to get a shorter term loan (3 years or 4 just in case. LONGER term comes w HIGHER rates on these types of loans) with a LOWER rate than what I have now but higher rate than the average joe on the street until I can get a regular loan. Also, maybe I can set myself up on this loan (now that I know how) do a 'purchase' in a year via back to work. maybe not. but my current 12% loan ends (gets called.. no extension) in a year and a half and I must have an exit. This is only the first option but EVEN IF it costs up to $15k (and it may not cost that much), I will have made that up in 16 months (before the loan I have now would have ended anyway) and then every month thereafter be $900 ahead. I also need to lower the payment so I can get the taxes in there. That is why I am considering it. I have calls out to other brokers too. I again invite your thoughts and will provide more info as it comes. I am not jumping at this loan just getting information and seeing what else is out there.Thanks guys. Difficult situation (and has been for the past 5 years ) but workign my way out of it the best I can taking advice along the way

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