Author Topic: Can't find a workable Re-Fi to save my life  (Read 877 times)

abstractartifact

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Can't find a workable Re-Fi to save my life
« on: August 18, 2020, 02:07:25 PM »
I have three, non-owner-occupied, 2-4 unit properties in New Mexico and I'm having a hell of a time finding a good Re-Fi. Current rate is 5.375% on all 3 with LTVs around 65%.

I refinanced our home easily with a local bank. For the investment properties I've called no less than 10 banks/lenders including:
  • WaFed
  • Credible
  • Nusenda FCU
  • Sandia CU
  • Century Bank
  • SunWest
  • Pinnacle Bank

Have >800 credit. Can't find anything that's good enough for me to pull the trigger. Seeing plenty of stories in this forum of people making it work. Not sure what I'm missing. Any ideas?

rothwem

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Re: Can't find a workable Re-Fi to save my life
« Reply #1 on: August 18, 2020, 06:02:13 PM »
FWIW, I’m having trouble too with a non o-o duplex. Best I’ve found is Aimloan, they’ll do 3.625%, but only if you pay 1.35 points up front which makes closing costs in the 6-7000$ range, which is unacceptable to me.

Finances_With_Purpose

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Re: Can't find a workable Re-Fi to save my life
« Reply #2 on: August 18, 2020, 10:52:17 PM »
Landlord refis are probably a tough sell right now.  Lots of landlords are taking big hits and the banks don't know who or how badly. 

srad

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Re: Can't find a workable Re-Fi to save my life
« Reply #3 on: August 19, 2020, 10:36:14 AM »
Keep trying, For my duplex's i ended up using a local mortgage co and received a 30 year fix at 3.375 with .66 points.  And yes, closing costs are high for duplex's right now, so make sure its worth it.  With your current rate,  at 5.375, that's $140 a month in savings per 100k borrowed.  If you are planning on holding these for long time, I'd make it happen.  Google mortgage companies and start calling the ones online.
 
Here are 2 online companies i've used in the past.

First Bank - You can only use these guys if you have 4 or less properties but they were by far the best mortgage co ive used for rates,fees and ease.

Security National - this is the one i use for when a less than conventional mortgage is needed (read spendy company)

FWIW My single family rentals were much cheaper to refi, there were no point and the rate was 3.25.

CNM

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Re: Can't find a workable Re-Fi to save my life
« Reply #4 on: August 19, 2020, 10:41:39 AM »
I'm in NM and looking to re-fi our family home and it is a nightmare.  Spouse and I have excellent credit (800+) but we are both self employed (I'm a partner at a law firm) and the banks are requiring a HUGE volume of financial information- months of P&Ls, months of bank statements, current month bank statements from the businesses and personally, business tax returns, and on and on.  They never seem satisfied!  They are highly paranoid that the businesses are in the process of closing.

abstractartifact

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Re: Can't find a workable Re-Fi to save my life
« Reply #5 on: August 19, 2020, 03:30:45 PM »
Thanks y'all.
Seems like New Mexico has some unique conditions. I've used HomeTrust in the past, and had good experiences, but their rates aren't competitive at the moment. Tried two more today and no luck so far. I'll keep pushing. Any more recommendations are greatly appreciated.

Enough

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Re: Can't find a workable Re-Fi to save my life
« Reply #6 on: August 20, 2020, 10:19:27 PM »
It’s not very popular on the forums, but I’ve gone with commercial loans for all of my rental properties.  All notes are 3.325-3.65, 5 year loans with 20 year amortization.  I’ll have to pay if off or get a new note at the end of the term but the loan fees are low (~$500 + appraisal) and I want the lowest rates possible.


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Dicey

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Re: Can't find a workable Re-Fi to save my life
« Reply #7 on: August 23, 2020, 09:39:14 AM »
Ask other landlords. If you don't know any, maybe Bigger Pockets might help. We use a local lender who is very LL friendly. We got the scoop, naturally, from another LL. It's Fremont Bank, which probably won't help in NM, but I figured someone else might ask, so I'm naming names.

Tl;Dr: Try local lenders.

Our dilemma is that rates haven't dropped quite enough to make refinancing pay off, but we're paying attention and crossing our fingers...

rothwem

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Re: Can't find a workable Re-Fi to save my life
« Reply #8 on: August 23, 2020, 05:40:15 PM »
So it sounds like they’re adding another 0.5% of home value to the cost of the refi now for everything closing after 9/1/20. That would make my closing costs on the best loan I’ve found so far a whopping $9,000?

Does anyone have any more information on that? It seems to be coming from Fannie and Freddie?

Dicey

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Re: Can't find a workable Re-Fi to save my life
« Reply #9 on: August 23, 2020, 08:02:06 PM »
So it sounds like they’re adding another 0.5% of home value to the cost of the refi now for everything closing after 9/1/20. That would make my closing costs on the best loan I’ve found so far a whopping $9,000?

Does anyone have any more information on that? It seems to be coming from Fannie and Freddie?
I heard they were going to start tacking on .25 (or 25 basis points) on the loan's interest rate for re-fis after 9/1/20. That's on the amount of the loan, not on the home value. Can't remember where, probably on another thread on this forum. What I heard is less onerous, but still completely blows.
« Last Edit: August 23, 2020, 11:38:19 PM by Dicey »

Finances_With_Purpose

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Re: Can't find a workable Re-Fi to save my life
« Reply #10 on: August 23, 2020, 10:48:03 PM »
So it sounds like they’re adding another 0.5% of home value to the cost of the refi now for everything closing after 9/1/20. That would make my closing costs on the best loan I’ve found so far a whopping $9,000?

Does anyone have any more information on that? It seems to be coming from Fannie and Freddie?
I heard they were going to start tacking on .25 (or 25 basis) points on the loan's interest rate for re-fis after 9/1/20. That's on the amount of the loan, not on the home value. Can't remember where, probably on another thread on this forum. What I heard is less onerous, but still completely blows.

https://www.reddit.com/r/personalfinance/comments/i93239/fannie_mae_freddie_mac_adding_a_adverse_market/

Looks like it's only going to add something like .0125% on, but it definitely bumped rates back up a bit. 

Dicey

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Re: Can't find a workable Re-Fi to save my life
« Reply #11 on: August 23, 2020, 11:49:33 PM »
So it sounds like they’re adding another 0.5% of home value to the cost of the refi now for everything closing after 9/1/20. That would make my closing costs on the best loan I’ve found so far a whopping $9,000?

Does anyone have any more information on that? It seems to be coming from Fannie and Freddie?
I heard they were going to start tacking on .25 (or 25 basis) points on the loan's interest rate for re-fis after 9/1/20. That's on the amount of the loan, not on the home value. Can't remember where, probably on another thread on this forum. What I heard is less onerous, but still completely blows.

https://www.reddit.com/r/personalfinance/comments/i93239/fannie_mae_freddie_mac_adding_a_adverse_market/

Looks like it's only going to add something like .0125% on, but it definitely bumped rates back up a bit.
Damn, this is confusing! Both quotes below are from the reddit thread helpfully linked by @Finances_With_Purpose.

"Fannie Mae FNMA, -1.80% and Freddie Mac FMCC, -1.83% said Wednesday that they will start charging a 0.5% “adverse market fee” on all refinances, including both cash-out and non-cash-out refis. The new fee goes into effect Sept. 1."

So the "adverse market fee" is on the entire loan amount?

And the quote below means that's the equivalent of an eighth of a point interest rate increase? And that a rate of an eight of a point lower will offset the fee?

"Still probably cheaper now. Just requires an extra 0.125% or so rate bump to increase the lender credit to offset fee."

My head hurts.


Finances_With_Purpose

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Re: Can't find a workable Re-Fi to save my life
« Reply #12 on: August 24, 2020, 09:38:23 AM »
So it sounds like they’re adding another 0.5% of home value to the cost of the refi now for everything closing after 9/1/20. That would make my closing costs on the best loan I’ve found so far a whopping $9,000?

Does anyone have any more information on that? It seems to be coming from Fannie and Freddie?
I heard they were going to start tacking on .25 (or 25 basis) points on the loan's interest rate for re-fis after 9/1/20. That's on the amount of the loan, not on the home value. Can't remember where, probably on another thread on this forum. What I heard is less onerous, but still completely blows.

https://www.reddit.com/r/personalfinance/comments/i93239/fannie_mae_freddie_mac_adding_a_adverse_market/

Looks like it's only going to add something like .0125% on, but it definitely bumped rates back up a bit.
Damn, this is confusing! Both quotes below are from the reddit thread helpfully linked by @Finances_With_Purpose.

"Fannie Mae FNMA, -1.80% and Freddie Mac FMCC, -1.83% said Wednesday that they will start charging a 0.5% “adverse market fee” on all refinances, including both cash-out and non-cash-out refis. The new fee goes into effect Sept. 1."

So the "adverse market fee" is on the entire loan amount?

And the quote below means that's the equivalent of an eighth of a point interest rate increase? And that a rate of an eight of a point lower will offset the fee?

"Still probably cheaper now. Just requires an extra 0.125% or so rate bump to increase the lender credit to offset fee."

My head hurts.

Yeah.  That thread wasn't the one I was hoping, which explained it a little better.  But as I understand it, yes, it's a fee charged on the whole amount of the loan (works out to about $1,500 on a 300k loan), i.e., basically an added closing cost. 

Most people will roll that cost into the loan at either a higher rate or higher principle.  If you translate the extra cost into an extra rate bump, it works out to about 0.00125%, an eight of a point, on the average mortgage, but it may be more or less depending upon the size of your loan.  The larger the mortgage, of course, the bigger the impact. 

Hope that helps @Dicey .

abstractartifact

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Re: Can't find a workable Re-Fi to save my life
« Reply #13 on: August 24, 2020, 12:07:05 PM »
Thanks @Dicey @Enough,
I've spoken to Fremont bank (we're in the same area) and they can't help in NM.
I have a HELOC available at 3.25% which I'm considering using as an alternative if I can't find a decent Refi. Makes me a little uneasy but the $ figures on the NM loans are fairly small.

Dicey

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Re: Can't find a workable Re-Fi to save my life
« Reply #14 on: August 24, 2020, 12:53:10 PM »
Thanks y'all.
Seems like New Mexico has some unique conditions. I've used HomeTrust in the past, and had good experiences, but their rates aren't competitive at the moment. Tried two more today and no luck so far. I'll keep pushing. Any more recommendations are greatly appreciated.
Do their rates look any better in light of the impending change in fee structure? Even shaving off a point would probably be worth it if you're in for the long haul.

rothwem

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Re: Can't find a workable Re-Fi to save my life
« Reply #15 on: August 28, 2020, 06:55:20 AM »
So it sounds like they’re adding another 0.5% of home value to the cost of the refi now for everything closing after 9/1/20. That would make my closing costs on the best loan I’ve found so far a whopping $9,000?

Does anyone have any more information on that? It seems to be coming from Fannie and Freddie?
I heard they were going to start tacking on .25 (or 25 basis) points on the loan's interest rate for re-fis after 9/1/20. That's on the amount of the loan, not on the home value. Can't remember where, probably on another thread on this forum. What I heard is less onerous, but still completely blows.

https://www.reddit.com/r/personalfinance/comments/i93239/fannie_mae_freddie_mac_adding_a_adverse_market/

Looks like it's only going to add something like .0125% on, but it definitely bumped rates back up a bit.
Damn, this is confusing! Both quotes below are from the reddit thread helpfully linked by @Finances_With_Purpose.

"Fannie Mae FNMA, -1.80% and Freddie Mac FMCC, -1.83% said Wednesday that they will start charging a 0.5% “adverse market fee” on all refinances, including both cash-out and non-cash-out refis. The new fee goes into effect Sept. 1."

So the "adverse market fee" is on the entire loan amount?

And the quote below means that's the equivalent of an eighth of a point interest rate increase? And that a rate of an eight of a point lower will offset the fee?

"Still probably cheaper now. Just requires an extra 0.125% or so rate bump to increase the lender credit to offset fee."

My head hurts.

Yeah.  That thread wasn't the one I was hoping, which explained it a little better.  But as I understand it, yes, it's a fee charged on the whole amount of the loan (works out to about $1,500 on a 300k loan), i.e., basically an added closing cost. 

Most people will roll that cost into the loan at either a higher rate or higher principle.  If you translate the extra cost into an extra rate bump, it works out to about 0.00125%, an eight of a point, on the average mortgage, but it may be more or less depending upon the size of your loan.  The larger the mortgage, of course, the bigger the impact. 

Hope that helps @Dicey .

So apparently they bumped it out until December 1 now. 

I still can't find a workable refi though.  I called 5 lenders yesterday and they were all over 5%. 

Dicey

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Re: Can't find a workable Re-Fi to save my life
« Reply #16 on: August 28, 2020, 08:23:15 AM »
Have you tried working with a mortgage broker? Sometimes they get better deals at the same banks.