Is there an advantage refinancing directly with the lender?

flnative30 · Joined: 09 Jun 2007 Posts: 3

Hello All,

In Jan 07 I refinanced my mortgage with a broker that offered me the best rate that was offered to me at the time of 9.75%. The loan was for 90% of value of $575,000. No prepay, 2 year adjustable. The loan was taken out to buy time until I could get the property sold. Since then I have not been able to sell the property.

I have been struggling to make the payments with that rate of 9.75. While I am current on the loan, I did contact the lender and tried to get a better rate explaining to them the possibility of walking away from the property. Didnt work.

They refered me to the refinance dept. that they call"Full Spectrum Lending" and they claim they can refinance @7.75% 80/10 which would help tremendously.

Is there an advantage to refinancing directly with the lender? Can anyone else recommend a better option?

My wife and I are both at about a 650 middle score. 1, 30 day late payment on a mortgage in 2006. Stated income, no prepay, adjustable rate ok.

Thank you in advance for your advice.

flnative30 · Joined: 09 Jun 2007 Posts: 3

BTW,

Property located in Florida and current loan is with Countrywide.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Sometimes there is a benefit, but usually it's going to be on the side of high credit scores, good pay history, etc.

With the stated income requirement, it puts you in a rough spot. What are the terms of the loan you have now? Do you have a prepayment penalty? Will you on the new loan? How long is the Arm period? Why do you need a stated income loan?

flnative30 · Joined: 09 Jun 2007 Posts: 3

Thanks for the reply.

The terms of the current loan are 9.75% @90% of 575,000=517,000 payoff with no prepayment penalty. I was told we could not use bank statements at the time of the refinance in Jan. because of funds being transfered back and forth between accounts and a couple of NSFs. Since then I have not been moving $ between accounts knowing that I would possibly need to refinance or get a new loan in the future. Also no NSFs.

I would like to have the new loan without a prepay.

The other option I am considering is to purchase a new home for a lesser amount now before I stop making payments on the home I am currently living in, then walk away from this whole thing. This situation in Florida is terrible. Hopfully taxes come down with this special session in Tallahassee, I just got a lower insuruace quote than the policy currently held by Citizens, now if I could only get a FAIR interest rate it could all work out.

Eitherway I am serious about trying to make this house/loan work Hablo. Your help is appreciated.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

I really don't recommend trying to convince your lender to work with you by suggesting you'll walk away from the house. While they don't like to be accepting F/C's, we banker types like being strong-armed even less.

Trying to work with the company, and explaining your situation is going to get you a more bang for your buck.

Either way, again I'm not sure what our Alt-A product would allow for. What is the reason you're in need of stated income? Are you a business owner? Also, I'm not 100% sure about what our Alt-A product would allow for with the recent 30 day late payment, but I'll double check, it could help you to know what you're comparing against.

Greg Phillips · Joined: 13 Dec 2005 Posts: 123 Location: Chillicothe, Ohio

What was the reason you were 30 days late? Was it within the last 12 months?

Let me know. There are some Alt-A lenders offering decent rates to stated income or at least better than what you have now which could result in some relief.

I also want to know your answers to the questions Travis asked.

Hang in there.