Re Fi

[StinkerBell]

I am looking into Re Financing my home. I can save 1.5 % in interest, without having to pay any points. I am thinking good. Although I am selling in about 3 - 4 years this would save me about 25,000.00.

What is this 2400 fee I see? It says Loan Add On....So I asked. It is a new fee all loans will have to help bail out the mortgage mess.
So I asked the poor loan officer who is only doing her job. So the government is offering better rates to help people so they can stabilize their payment......Because they can not afford to pay a higher monthly payment......so the government says we will help BUT it will cost you up front an additional 2500 they do not have?...Yup sounds like our efficient government.







btw ...... I am in such a mood the last day or two so I f I do not make sense, I am in a rant. Please pass the chocolate.

[NM_Shooter]

Amen.  Happy April 15.  I had to cut a big check today.. better look into my withholding. 

I was just wondering this morning why we offer tax rebates on home mortgage interest.  This seems kind of weird to me... being encouraged to take out a bigger loan for the "tax advantages".  Why someone would think that spending a dollar to get $0.25 back is an advantage.

And it now looks as if there is a $2400 bailout too.  Is this on all loans, or is this a ratiometric cost based on loan amount?

I get pretty pissed when the gov't steps in to bail folks out (or airlines, or auto makers or....).  This is going to sound sort of harsh, but I think that financial darwinism might need to run it's course.  I would bet that after a generation or two that most people would start to make better credit decisions. 

[MountainDon]

.. better look into my withholding. 

The bad thing is that if you consistently under withhold and don't make proper estimated quarterly payments, you can be assessed a penalty. There are specific rules. When one has non-earned income you must be careful of that. I take the easier route (easier than making quarterly payments) and just have an extra amount withheld every paycheck.

I was just wondering this morning why we offer tax rebates on home mortgage interest

That should be a deduction (only a matter of semantics). That is presented as promoting home ownership. But as far as I'm concerned there are a few things wrong with it. First, paying interest on a loan is still taking money from your pocket and placing it in somebody else's pocket. You don't get the full amount back, only some. Second, unless you itemize you don't even get that. From what I've read there are more people who have mortgage interest and do not itemize than there are those that do.

The deduction promotes foolishness like buying more house than you need. That is, it does that to those who don't have the ability to figure out reality for themselves. I know I/we are the oddball, we bought only as big as we needed, paid off the first mortgage we ever had way early by living on one wage and using the other to make multiple extra payments.

This is going to sound sort of harsh, but ...

Harsh or realistic? I believe realistic. You make decisions and you have to live with them. Period.

[NM_Shooter]

Yeah!  Deduction.  That's it.  I'm an engineer, not an accountant 

Why can't we promote home ownership by reducing / eliminating primary residence property tax? 

I remember when I was first married, someone said:  "you and you wife both work... you are going to have to buy a big house or pay a lot of taxes".  I was confounded by that statement and didn't know what to say.

I like the flat tax.  I also like consumption only tax.  I don't understand why I am taxed because some idiot financial guy somewhere is churning my mutual funds. 

Okay.  I am done venting about taxes for another year.  (maybe)

[peternap]

Yeah!  Deduction.  That's it.  I'm an engineer, not an accountant 

Why can't we promote home ownership by reducing / eliminating primary residence property tax? 

I remember when I was first married, someone said:  "you and you wife both work... you are going to have to buy a big house or pay a lot of taxes".  I was confounded by that statement and didn't know what to say.

I like the flat tax.  I also like consumption only tax. I don't understand why I am taxed because some idiot financial guy somewhere is churning my mutual funds. 

Okay.  I am done venting about taxes for another year.  (maybe)

Amen
Amen
and

A M E N

[ScottA]

I am understanding this right? There is a fee on loans now to cover the banks losses on bad loans? RISK is a part of doing business! This is insane! So if you use this logic I should add a fee to every one of my customers bills to cover the few that don't pay.

[MountainDon]

I find this interesting/puzzling.  We've begun the process of selling some TX property to a nephew. Wells Fargo is the mortgage lender. I've seen the papers from Wells Fargo (ourside and his side), including the good faith estimate of all costs, and there's nothing even remotely like that listed anywhere. A new type of fee, a new line item, couldn't fairly be added in at the last minute. It would have to be already listed as an item, though the amount could be off by a little. And comparing these papers to old ones from previous applications and mortgages, there's nothing that jumps out as a new item or type of fee.

Puzzling. 

[StinkerBell]

I did a little more digging on it.

Fannie Mae & Freddie Mac's Risk Based Pricing


I wrote earlier about  "Fannie Mae implementing risk based pricing for all transactions" (see http://activerain.com/blogsview/307005/Fannie-Mae-implementing-risk), but what does that mean to a buyer in today's market? Here are some examples of the fees from Bankrate.com.

Fannie Mae is implementing an "adverse market delivery charge" and Freddie Mac is calling their fee a "market condition delivery charge." For conforming loans (loans under $417,000), buyers can expect to pay as follows:

Less than 10% downpayment with credit score of 720 or more (if those loans are even available):

Pay a fee of .25% of the loan amount ($250 for every $100,000 borrowed)

Less than 10% downpayment with credit score of 720 or more (if those loans are even available) for an interest-only loan:
Pay a fee of .5% of the loan amount ($500 for every $100,000 borrowed)

Less than 10% downpayment with credit score below 720 (if those loans are even available)
Pay a fee of .5% of the loan amount ($500 for every $100,000 borrowed)

Less than 30% downpayment with a credit score below 620?
Pay a fee of 2% of the loan amount ($2,000 for every $100,000 borrowed)

Less than 30% downpayment with a credit score between 640-659?
Pay a fee of 1.25% of the loan amount ($1,250 for every $100,000 borrowed)

There are other charges for loans for investment property and 40-year mortgage.








I pointed out to the lender the I am doing a refi and not cashing out. My credit score is in the mid 700's...Her reply was this

"The .25 add on fee is a fee that was added on for all loans after FEB 1st by Fannie Mae. There is no way to avoid this fee. It's for all loans no matter what. Sorry about that. "

I didnt realize the CU was so restricted in the loans the offer, but with that said they do not make bad loans and I believe have never had any issue like what is going on in the country right now.

[peternap]

John, looks like your business might get really hot this summer.

[peternap]

What I don't understand is....with the mortgage mess, why in He!! aren't land prices falling?

[MountainDon]

Did you shop other lenders other then your CU?

[StinkerBell]

Yes.....For 6 weeks I got the run around from US Bank.

Also the rate is 5.125.

[MountainDon]

Better rate than what WF offers to the walk in the door customer.

ED:  Ditto BofA