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kiakia123

Are we crazy to be even considering this?! NEED ADVICE ASAP.

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My husband and I were approved for a cash out refinance loan. We are taking out $30,000. We are suppose to close on Monday. I received the good faith estimate today and this is what it contained:

Interest Rate: 7.850%

Loan Discount Fee (4.65%) ---$8602.50

Appraisal Property Valuation --- $275.00

Tax related service fee - $70

Flood search fee -- $16

Lender's processing fee - $626.00

Admin to Ameriquest Mortgage -- $239.00

Application fee to Ameriquest -- $360.00

Interest for 10 days @ $39.79 per day -- $397.00

Est. Closing Cost $11,460.50

Est. Prepaid items/Reserves $397.00

Total: $11,858.40

Settlement or closing fee -- $312.00

Title examination -- $227.00

Title insurance - $600.00

Courier fee - $63.00

Total: $11,858.40

Principal and Interest: 1,338.17

Total monthly payment: 1,338.17

My credit score is around 520 and my husband's is 535. Our present interest rate is 7%. Our current monthly mortgage payment is $1140. With this new 7.8 interest rate it will be $1338.00.

We owe 119000 on our house and it was appraised at 250000, so we have a considerable amount of equity.

I understand our credit is very poor, but I think this is ridiculous. We are very much in need of money, but we are not desperate.

What do you think about this?

Thanks

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They are bending you over pretty bad on the loan discount fee -- did they throw in some vaseline?

Here's how to figure out if it is worth it or not -- figure out your total monthly savings after your debts are paid, then divide the total cost of the loan by how much you are saving per month.

For instance, if you are saving $300 per month in total cash flow, it's going to take you a little over three years to break even.

Also take into account the tax benefits, if you are paying off debts that you can't deduct the interest on. The loan discount fee can be written off over 30 years, unless you sell the house, in which case you can capture the rest of it in the year you sell the house.

On the other hand, that is a lot of money to pay for a loan, especially for a not very good rate. If you are not desperate, I would work on getting your scores up and try again later. If you can get your scores up over 600, you will be able to get a much better deal.

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Ameriquest!

ROFL, that is ridiculous. Ameriquest is pocketing close to 10 grand on this loan. Walk away!

Actually. don''t walk away. Tell them that you will pay no more than $1,000 between Loan Discount, Admin to Ameriquest, and Application fee to Ameriquest. And then stand your ground! Be firm but polite. They will throw excuse after excuse at you in regards to the high fees. But the truth is the fees are extreme. With the amount of your equity you can qualify for a number of programs. None of which come with a 4.65% discount fee. You can even qualify for a subprime 2nd, leaving the first alone.

Just out of curiousity, what state are you in?

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Yes please what state are you in lol! Seriously dont be foole into thinking you got lucky here and wont be able to get a deal elsewhere! WALK AWAY if they dont eliminate those outragouse fees! God someone has low scores and are sub prime, these people think you deserve that crap!

This is what pisses me off royaly. Almost 10 grand! Please tell us your going to tell them you refuse to pay that much in fees! Hell I do 2nd mortgages for that amount!

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If you went ahead and closed on this loan, you have a 3 day right of recission to cancel. Fill it out and use it.

I don't think I need to say it, but just like all the rest of the advice, get out of it.

You have an extremely low loan to value ratio, and credit score or not you should be able to pull in a really decent interest rate with that much equity.

Don't believe me??????, Check out how we took care of Shreveport on his mortgage.

Credit, collections, whatever, you will not get a worse rate, probably (no most likely lower your interest rate). almost anything is possible with that much equity.

Funny, you did'nt mention their 5 year prepayment penalty attached to their financing. (Maybe you live in a no prepay state)

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Thanks to all of you for responding. Out of stupidity, we did close on the loan, BUT, you will be happy to know that thanks to you all, I convinced my husband that we should cancel the loan, and we did. I printed out these posts for him to see and we talked to several people about our situation and we got out. So, it's back to the drawing board. What route shoud we go in at this point? Again, my credit score is 520 and his is 535. The house is worth $225-$250 and the pay off is $119.00. Should we do a refinance cash out, or home equity loan?

Thanks again!

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Good for you. Now lets see where you are at.

Just for credit qualifying sake, are there any bankruptcies or foreclosures we need to worry about? If so, the knowing the ages of these will help. Now, how about mortgage history in the past twelve months?

Most of the lender guidelines start at 65% loan to value. This is where the best interest rates are obtained.

Next, are you really wanting to consolidate all the debt, just enough to get comfortable with your finances, or none at all.

Rough figures would have a mortgage payoff of 119K, additional cash out of 30K, throw in fair closing costs of $3,500- $4,000 and your loan amount would be $153,000. This gives you a loan value of 61% to 68%. (Didn't you just have an appraisal done?)

Let's get started.

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There are no bankruptcies or foreclosures, but there is a $3000 state tax lien. As far as the mortgage, we have been late several times in the last 12 months.

We need a loan to get caught up and back on track. We don't have that much debt and we make $85000 together a year, but we are so off track that it's hard to keep up with everything. We want to start over and get back on track, and $30,000 would do that for us.

Our house pay off is a little under $119000, and the house was appraised at $225000 - 255000.

I'm ready to start.

Thanks

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You should talk to the appraiser about putting the appraisal in another lender's name. Unfortunately, you will likeley need to get a release from Ameriquest. Let us know if you have any trouble.

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With Ameriquest, you don't pay for the appraisal report. It is included in the loan. And if you don't go through with the loan, you don't have to pay.

Ameriquest called us yesterday. The guy said he was shocked that we canceled the loan. He told us that we were crazy for listening to people that didn't know us or our situation. He said if we get a better deal anywhere else he would give us $100. That's how confident he is that we are not going to find a better deal with less fees, lower interest rate. etc.

I told him we will see. We are now looking into MortgageStar and New Century. Anybody know anything about these companies?

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