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Old 06-19-10, 08:41 AM   #1
Diegomayra
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Refinancing... opinions.

My wife and I recently sprang on the recent re-pricing of mortgage rates to reduce our monthly mortgage and attain a favorable interest rate. In our current home we pay 6.5% interest which at the time of purchase (edit) wasn't a terrible interest rate, however now the @ par is 4.375% which is a substantial amount.

I did my research about refinancing prior to any meetings and GFE quotes. My wife is under major stress due to the fact that I am now a returning full-time+ student and she will be the primary income earner. I signed the contract on Friday to lock in the Thursday re-price of 4.875% which is .5% percentage points higher than the par rate of 4.375%. I did not opt for a floating election because I worry the market will rally early next week and we could possibly miss out.

At the time of signing my wife and I were at odds about the rate and I signed under pressure to appease my wife, however I wish to change the terms of the loan contract.

Here is the email I will send, opinions??

Quote:
The primary purpose of this email is to express my dissatisfaction with the current loan contract that was signed on Friday. I understand that 4.875% is a great rate and that in order to achieve a 4.375% it would mean exhausting most of our savings/retirement, something that my wife has no intention of doing. The 4.875% rate that we locked was achieved through the use of the YSP kickback, which is at 3% according to the loan docs. I feel that the terms under which the current loan contract is written is less beneficial to the borrower than the broker and would like to cancel the contract or amend it. At 4.875% v. 4.375% we pay an annual increase in interest alone amounting to slightly over 1000.00. Over the course of 5 years this would represent a difference of 5624$; this disparity increases over the life of the loan resulting in large net losses on our end.

In order to better leverage the terms of the loan contract against this disparity I would like for the entire portion of the YSP, 3%, go toward our closing costs. The industry standard 1% origination fee would be charged upfront and summed against the closing costs. (+3%/-1%) Or the contract can include no origination fee upfront and the YSP back fee could be returned to us at 2%.

As a homeowner and borrower I feel this creates a satisfactory loan contract and better leverages the loan contract at the time of signing, due to the net losses the .5% rate increase above par creates.
I respect the loan officer we are working with and have had a professional working relationship for some time, but these economic times call for the borrower to be informed and demanding. (edit) Current Fee: 1.5% through YSP.

Opinions? Am I being to harsh? Or just right?

Last edited by Diegomayra; 06-19-10 at 09:07 AM.
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Old 06-19-10, 09:07 AM   #2
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You don't have a lot of leverage if you've already signed a contract. The time for negotiating was before you signed.
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Old 06-19-10, 09:16 AM   #3
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Do a google search for "mortgage cooling off period". I don't know the rules in the States, however there may be a period of time after signing the contract where you can cancel or amend.
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Old 06-19-10, 09:25 AM   #4
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3 day cooling off, which I am exercising.
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Old 06-22-10, 11:09 AM   #5
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how many "points" is he charging you. 4.875 is a good rate, but he should not be charging you any points. I am an originator, and rates keep getting better. Your only closing costs should be required fee's and escrows if you choose, but NO points!.
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Old 06-22-10, 01:19 PM   #6
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Good luck if it's with Quicken Loans/Rock Financial. They've earned the 16 pages of complaints here.
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Old 06-22-10, 03:06 PM   #7
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Looks like you didn't actually refinance yet, you just signed an intention to refinance at a fixed rate. I don't see why you can't still shop around. Did you put down a deposit ?
Is there a stated penalty for not following through ?
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Old 06-25-10, 09:15 AM   #8
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what have you signed and paid so far? as long as you haven't actually sat down to sign the new loan documents at a closing, I don't see why you can't back out? Even if you have signed, you have that 3 day window to back out (and typically funds are dispersed on the 5th day? depends on your area and specific documents). You might irritate the broker, have to pay another refinance application fee and I'm guessing be out the fees for title company/etc, but if you can get 1/2 a percentage point off, it might pay for itself quickly. I'm not sure if there are other cancellation fees that would apply, it should be laid out in the documents.
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Old 06-27-10, 09:52 PM   #9
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Ahh sorry for not paying attention to this thread. I locked in @ 4.7%/360mos.

No origination fee upfront. She is getting her 1% origination fee "off the back" from YSP. Why? We are purchasing an above par loan. I do not have all the cash to purchase at par.

Mr. Rolleyes, thanks. No points. YSP Rebate, I wanted 2% of the 3% YSP Max allowable from CMG. It is an FHA streamline.
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