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Main home refinance-thoughts welcomed

September 30th, 2014 at 12:13 pm

HI all.

Bringing some of you up to speed. my house was in foreclosure. i settled w the bank (w a hard money loan Jan 2014 ) to buy my house back from the bank. Loan is at 12% and ends (no extension) 11/2015. I am trying to refinance out of it.

My options are getting a little fluid
1. loan I was approved w is saying it does not fit their program anymore and now want 6.375% and 4.75 points to the bank and 2 points to the broker to do the loan. I have 3 past foreclosures, their program allows one.. 6.75 total points. I submitted info and they are going to see if we get an approval this week. This loan has changed several times and feels less stable but is almost done. Loan is a 5/1 arm. I would break even w points in 23 months. Not impressed or confident w broker.Currently saying I must title in LLC (which if you read down I do not want to do). I have asked them to change this and reduce points.
2. looks like other banks are now offering this loan type (above) but very few in Illinois. Loan type is called 'one day out of foreclosure' and is very new. I have contacted someone else for a similar loan to the above to check points .. just gathering info. they are saying they only charge 2-4 points and appear to be an established brokerage.. my #1 option is just one guy. expect FINAL news if they can do the loan today and their points
3. guy who set me up w the loan i have NOW thinks he can get me a 4 point 8ish% 5/1 arm loan . He is someone I know I can trust and the loan iwll close. i am submitting preliminary info to get an accurate quote. thsi will be in my back pocket. requires LLC titling.
4. FHA guy 'thinks' he can refinance me out (using extenuating circumstances' in a year from the date the bank took over the last rental 8/ date 5/2014). They need title in my name for 12 months prior to do this. Title currently in LLC. FHA is checking this thoroughly and we will submit extenuating circumstances docs for review NOW to make sure I qualify..

key items (just found out)
1. FHA says they need the house in my name for 12 months to refinance me out at all at any time. So I need to either get a new short term loan in MY name (currently titled in LLC) or ask current hard money lender if I can change title and go right to FHA loan from here

1. contact current lender and ask if I can change title to my name or add my name to the title w the LLC
2. AsK FHA guy if that fits the requirements
3. Proceed w option #1.. see if I get approved and ask if they can reduce the points and let me take title in my name (broker is currently saying has to be in LLC)
4. Proceed w info gathering w option #2 to see if they CAN do the loan. I have 3 foreclosures (most lenders in this programn only do one past foreclosure, which is why option #1 changed all of a sudden)
5. proceed w basic submittal on option 3 so I have something in my back pocket
6.submit all my extenuating circumstances documentation on the FHA option to try to get that more 'certain;

the FHA option is best if it can be certain. I can not be uncertain the loan will go through. I do not have a lot of time after 8/2015 to get another loan if it does not work out.

Otherwise just getting a 5/1 arm w less points is the better option and if I can get 4 points pays for itself in a year. The option #2 has no issues putting it in my name alone which means I can 'cruise' for 5 years or less w that loan and then easily switch to conventional or FHA on my own without a broker.

6.75 points wipes out almost all of my emergency and rental emergency fund. can not really afford it well.

so option 2 is best for a loan now if they can do the 3 foreclosures and loan in Illinois.

News as it comes

My Dad had a stroke last weekend and is not doing super awesome.. lots of stuff going on there.

No job news

6 homes picking up (share later)

need to decide if I renew the current Property manager of the 3 units (that I just removed from the 6 homes) or just switch everything over to the 6 homes guy. Nov 1 is end date of her contract.

Talked to the 6 homes prop mgr and evaluating

News later.

This 'trying to reach my 5 year plan' stuff is pretty exhausting some times!

**Also broker for option 1 (loan I 'was' approved' for) is saying he earned his broker commission already and says loan has been approved for 2 months, it has changed 3 times and we are now resubmitting. I stil ahve no approval letter from the bank. he just sent me a note that he is not working on file unless I pay him his fees> I will do a 3 way call w my accountant and him today but not paying if I do not have something from the bank saying this is approved and we close and have asked him for that several times. All he sends is good faith estimates that have changed 4-5 times etc..will also follow up w the other company offering this type of loan. The loan just substantialy changed late last week.. Crazy! Hope option #2 can do the loan **

3 Responses to “Main home refinance-thoughts welcomed”

  1. creditcardfree Says:

    I honestly don't know how you do this!

    Moving debt around never gets anything paid and seems to just cost more money. Have you ever seriously considered selling your home and getting something else? Rent for a year or two to get into a mortgage that is more reasonable? Just a thought..

  2. Another Reader Says:

    The broker wants you to PAY him his commission without getting you a loan??? This guy is a commissioned salesman. Commissioned sales people get paid when the sale closes. They don't get paid if the deal doesn't close. That's why the commission is high - some deals don't close. He wants you to pay him because he has a lot of time in your file and he knows he can't get the loan approved by any of his lenders in the current market. My answer would be that he gets paid when the loan closes.

    I'm very sorry to hear about your father. I hope with all this mess you are able to spend some time with him.

  3. Rachael777 Says:

    Thanks AR.. that is what my thinking was and my accountant but nice to hear it from others... still researching going straight FHA (in a year). sounds promising..but still clarifying. if not too tired tonight . will submit for that also.. also submitting tonight to this other guy who has the SAME loan (as guy #1) but only charges 2 points.. he says he can get a pre aprpoval pretty quick but I will want to submit in full to really feel good. Guy says once submitted in full they DO give our approval letters and loan will close in 3 weeks...Guy did say his lender DOES loans in Illinois.. only caveat besides rgular qualification (which I should be fine w) is if he can approve w 3 foreclosures vs one in my past.. Fingers crossed.

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