Equity Home Loans - Refinancing our home. WHo do we go to?

Refinancing our home. WHo do we go to?

We are going to refinance our home. The home is worth 500,000. There is only a 50,000 first mortgage on the home. We want to refinance for 175,000, paying off the first mortgage. My questions are. 1. Who do we approach first. Is it better to go to a mortgage broker, or our bank. 2. What things do we need to look out for. We want a 30 year fixed (we think). We plan on staying here. 3. Do all loans allow you to pay extra principle payments without penalties. 4. What about Ditech.com, and all those other advertisers. We bank with washington mutual. Thanks in advance. We have never done this and are freaked out.

Public Comments

I would ask family and friends for referrals, they may be able to hook you up with a great mortgage broker who will help you out every step of the way. I am not sure if mortgages are different in other states, I would just go sit down with a broker and talk to him or her about what you are looking for and get a quote from them and get some more quotes from other brokers in the area. Try the bank and ditech.com if you would like but they might not sit with you one on one explaining everything since this is your first time.
Mike, Although I'm not a Mortgage Lender myself, I work with them on a day to day basis. I would suggest that you speak with someone at Countrywide Home Loans. To answer your questions... 1. You should speak with a few different lenders, be it a bank or a mortgage broker. I tell all my clients to shop around and get the BEST DEAL for YOU! Afterall, it's YOUR hard-earned dollar! Typically though, banks have only a few products available, while Mortgage Brokers can tailor something specific to YOUR NEEDS! 2. Alway look out for lenders who have a Pre-Payment penalty clause in their contracts! 3. I would say to consult with each lender that you "interview". 4. I have never personally used Ditech nor have clients of mine, but you want to make sure whomever they are that they are reputable! Good luck, and if you have further questions let me know!
In any transaction it is better to get a referral from a friend if one is available. If not find your local telephone book and locate a mortgage broker. They have underwriters that can underwrite any type credit you might have. Now this person is gonna want to see lots of documents to prove certain things about you and anyone else trying to refinance this home with you. Don't get frustrated, this will all be over soon so don't freak. So to get you started I am gonna give you a few of the things you will need #1 Fed income taxes for 2 yrs as well as W-2 for the same period #2 Pay stubs covering one complete month. #3 6 months from bank statements from all the banks you use to include any 401k plans at your place of employment. This will get you started during your first interview. Now don't plan on a short trip to the mortgage broker's office or telephone to fill out the application. There are lots of questions as well as lots of forms to sign that are required by federal and state and authorities. He will even fax them to you for you to complete. Make sure they are accurate as possible before returning them. Once he has the documents signed and back in his hands, he will run a credit check thus finding out your credit score. With this credit score he can now tell you what loan programs you are qualified for. The appropriate monthly payment, how much the lender will allow you to borrow on your home as well as tell you about the interest rate of your mortgage. He will also order an appraiser to appriase your home to prove the value of the property. You will have to pay for this at the door when the appraiser arrive. (Talk to your broker he might refund this cost to you-never hurt to ask.) Now make sure you tell this mortgage broker what you plan to use the money for or give him some idea. Most loans will allow you to pay extra principal payments and normally without a penalty. Talk this over with your mortgage broker. I have no problems with Ditech.com, on the other hand I have never used them either, I prefer to do my business in person, so I can eye ball the person. I hope this ahs been of some use to you, good luck. "FIGHT ON"
All loans allow you to pay extra toward the principle as long as you have the extra money to do so. As far as who you should approach first it is always best to look at several different offers that way you can get the best deal for you. Look out for anyone who tries to put you on an interest only rate because the payments sound good but after the initial period when the loan starts adjusting the payments may get to be too much for you to handle and your really not paying anything towards the principle payment and sometimes not even the amount of interest that you should be paying. My husband is a loan officer for a mortgage company and if you would like his contact information to see what kind of deal he may be able to get for you feel free to click on my profile and email me.
Always ask for a GFE or Good Faith Estimate with whomever you choose. Junk Fee's and Title Fee's can eat up a bunch of your refinance costs. So it's not whether your choosing a Bank or Lender for Rate but which will cost you the cheapest. With that in mind make sure that the GFE give your estimated actual closing costs. That mean Title, Impound (Taxes & Insurance), Lending Fee's, and Broker Fee's are all in that initial GFE. If they cannot provide this within 24-48 hours than they dont know what they are doing. Ditech is owned by GMAC. GMAC is both a Retail and Wholesale (Lender) company. So you can go to a Broker and get that same rates from GMAC as if you just called Ditech. Watch out for Discount Points - this little slimy beast is actually making you pay down the points in which you did not possibly want to do. Credit Report- You have 30 days from the first day your report is pulled to find a person to work with without it hurting your credit score. So shop quick and fast. Do not use those online Tree company's since they will sell your information to 100 broker's nationwide who will end up junk fee to make up the cost for buying your information. Any other questions you can contact me. You can send me your GFE or All if you want.
It seems Countrywide must be paying people to promote them on here, or maybe it's the same people pumping them all the time. They're fine, they're enormous, and not necessarily your best deal. Talk to friends, family and coworkers. You should be able to get a couple referrals to people they've used and trusted. A mix of bankers and brokers would be ideal. A banker works with a specific bank, and has only one place to put your loan. A broker works with many banks, and can shop dozens of banks to get you their best prices. Often, brokers are cheaper, but not always, so it's wise to look at both. WAMU is certainly an option, and worth a phone call. Again they're fine, they're enormous, and not necessarily your best deal either. If you're planning on staying in that home for a long time, a fixed rate loan is the absolute best option for you. Almost all loans allow you to pay extra principal, even if you have a "prepayment penalty". Those penalties usually only kick in if you pay down more than 20% of your balance in a single year. Not usually when you're simply adding a couple hundred bucks to your monthly payments. The best way to shop is to get good-faith estimates of closing costs from 3-4 places, on the same day. Rates do move daily, so to get the most accurate comparison, you'll want to compare them all on the same day. Match up their closing costs and rates, and see who comes out best. You also want to make sure you like and feel you can trust the person you end up choosing. Call your bank. Get some referrals to some brokers and bankers and get quotes from them too. If you are freaked out by the prospect of refinancing, I'd recommend using someone local if possible. Being able to sit down with someone, and being able to ask all your questions while you're together with paperwork in front of you, should help alleviate your nerves. This should be a very simple deal for you to complete. With that amount of equity, qualifying should be a breeze if you have decent credit or better. The going rate for a 30 year fixed loan today is roughly 5.875-6.25%, depending on your state, for a standard conventional loan. One possible suggestion: You can take an interest-only 30 year fixed rate loan. Doing so, you have the option for the first 10 years (typically) to pay only the interest charges. You can pay principal at any time you choose. Doing this could have a benefit for you, depending on how you intend to pay extra on your mortgage. With a normal loan, paying extra doesn't reduce your monthly payments going forward. With an interest-only loan, it's recalculated monthly based on your present balance. After the 10 year interest-only period is over, you have 20 years to repay the balance at a fixed payment that will not change. But, if you had repaid $75K over that 10 years, your final 20 years of payments would be considerably lower. This might make sense if you have irregular income, or chunks of income that you think you'd apply in big pieces to knock down your balance. Otherwise, on a normal loan, you can knock down those big chunks, and since your payment doesn't drop, more of those payments goes to principal, creating a nice reduction in your future interest, since you're paying the balance down quicker with each payment. Either way, paying it down is great. Just depends on if you want some flexibility on your future payments.
My first piece of advice is shop around. Make sure you get a quote on the same type of program so you can compare equally. Get the rate & a Good Faith Estimate (which should cover most if not all closing costs). I have a website that I've started, no sales just information, to help educate people about the mortgage process and things invloved with home financing. I have covered topic's such as Banks vs. Broker, How to prepare for an appraisal, loan types, ect. You may want to check that out, also take at look at the information that is available at Bankrate.com Most loan programs will allow you to make extra payments, I think the pre-payment penalities you are thinking of or may have heard about are penalties that are incured when you pay off a loan within, usually 2-3 year of obtaining the loan.
Find an advisor that owns a home.....has a license .....has good credit and is willing to share that credit report with you. You'd be amazed how many mortgage people don't own a home.....have bad credit due to bad financial decisions who are advising people like you. They have no clue but have no problem selling people loans that could ruin their finances. Online companies are lead generators for the most part who sell your info over and over. Dont be freaked out. With a little knowledge you are in the drivers seat. Ask the mortgage advisor how they are getting paid. Noone works for free .... not even the guy who changes my oil so honesty is key. Some will charge you a point and also collect on the back end because they can slide it in there and get away with it. Most dont understand or know to ask. Shoot us an email for a free OBA™ referral and check your advisor out for yourself. See their credit before they see yours. Then you'll know if they're truly qualified. Years in the business gives little indication to their financial abilities.....If a loan agent is seasoned 20 years but has bad credit ..... foreclosure...repo.... its likely his inability to make good financial decisions. Sad but true, they work in this biz everyday. Good Luck
I would stick with the mortgage company who has your first mortage. They have most of the info already that you will need to provide. I had WAMU for years and refinanced with them too. It was a very easy process. You can pay extra principle each month with no penalties at all.
Instead of refinancing, which may mean big closing costs, you may be able to get a HELOC. With a HELOC, there is usually no closing cost. You could check with a mortgage broker for that. I know of some if you need referrals. Also, you may be interested in this new program. It works well with a 30, 20, or 15 year mortgage. I am currently using a HELOC with a new software program from United First Financial, called the Money Merge Account. This software helps build equity fast, and will help me payoff my home in less than half the time without refinancing, and without extra payments. It is saving me thousands in interest, and pays off home in less than half the years. E-mail me if interested.