Refinancing - can I do qualify? Any advice?

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- Justin
  
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posted
16 years ago

Wed, Jan 30, 2008 11:24 PM

I bought a home last year in July (2007). I closed the week the first big news of the mortgage problems started arising.

I purchased a $290k house, and had $10k worth of closing costs built into a loan that was a 30-year fixed for $250k at 9.5 and $50k interest only for 15 years at 11%.

I have pretty good credit (Fico around 750), but I got hosed because it was a 2-family and it was based on stated income (including future rental income).

I have been in the house now for 7 months, I have had a paying tenant in the second unit for 6 months, and have made many improvments to the property.

My math shows that if I could refinance even the one large loan ($250k) at a rate of 7.5 it would save me almost $5k a year.

Countrywide (my current lender) said they won't touch it unless I've been in the house at least a year, is this a gerneral rule of thumb for most lenders, or just lenders you currently have a loan with?

Is it ever "too soon" to refinance?

Waiting until the 1-year mark wouldn't be the worst thing, I'll likely be making more money by that time of year, and will have a solid year of rental income shown in my accounting.

Any advice would be greartly apprecaited, just feeling out my options.

Thanks, Justin

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- joetaxpayer
  
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posted
16 years ago

Thu, Jan 31, 2008 12:19 AM

I'm more concerned about you being so close to 100% LTV or worse if the house dropped a bit. If, by chance, you got a 6% 30 yr fixed, you'd save over $800. There's little magic about the one year mark, but the bank has no interest in negotiating since you are not in trouble. I would do my damnedest to aggressively pay down that $50K. And there's no harm in walking in to the local owned bank, if there's one nearby, and sit with someone. You haven't mentioned your income, debt to income becomes a big part of the picture. JOE

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- jIM
  
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posted
16 years ago

Thu, Jan 31, 2008 2:14 PM

NO.

I bought new in Dec of 05, and refinanced in June of 06, 6 months later. Our refi has already paid for itself based on closing costs.

My goal is to lower my payment 8% with any refinanace (that saves me 1 payment per year). I also try to keep the same repayment period as original loan (note you would have a lower payment now, even if rate was the same based on principal already paid and increasing of the term). If you can save 8% keeping the same term, the deal is even better.