Your Questions About Mortgage Refinancing Companies

Lisa asks…

How can I get information on refinancing a home after I purchase it out right to pay back family?

I would like to purchase a home that a close friend has that is going into foreclosure. I am able to get the money to purchase this home from family if I can assure them I could get it back to them by refinancing the money out. I would purchase the house for right under 200k and it is worth a little over 400k. So I would not take out all of the equity in the house out. Only enough to pay back family and have some money for appliances and furniture.

John answers:

Assuming that your figures are correct and not just a pipe dream, you can go to a mortgage broker and arrange for a mortgage on the property. If you are buying the property for $200K, you would need about $40K to get a mortgage at a reasonable rate without having to pay mortgage insurance. If the home is appraised at $400K, and you are paying $40K, there should be no problem financing it with a $160K mortgage, providing you have income with which you can repay the loan.

If you are counting on family to provide the entire $200K, you still need the ability to repay the debt, and you need an income from which to make those payments. Keep in mind that owning a home involves additional expenses, such as maintenance, property taxes, insurance, and monthly utilities.

If family members are willing to invest the entire $200K purchase price and the home is appraised at $400K, a mortgage company will be happy to refinance the original debt. But if the $400K is just in your imagination, you may find that an appraisal is not as high as you think. You need a professional appraisal in order to know what you can finance.

Sandy asks…

Mortgage company wants my 2005 and 2006 income tax returns. Is it required?

I applying for a home refinance loan. Mortgage company want me to sign a form to obtain my 05 and 06 income tax returns. Is it required?

John answers:

They simply want your income documented. This is no big deal.

Joseph asks…

How much does a mortgage broker make of a deal for a home refinance?

How much does a mortgage broker make off a refinance loan? vs How much does a bank employee doing a refinance make off a refi loan? Besides ideal credit scores, what steps can be taken to ensure getting the best possible rate?

John answers:

Ive been managers at a bank over loan officers. Ive been a loan officer at a bank. We paid our loan officers 50-75% of the Loan Origination Fee. Thats it. Its a high turn over job. The reason being is because they are only working for the bank for free training so they can become a broker or work for a broker.

The company I work for is 100%. I pay them a small fee 250-450 dollars per loan. I just use their name.

So to give you the bank example. The bank will price the loan for approx 1.5% YSP and charge a 1% origination fee. Ill pick on wells fargo. If you work at wells fargo as a loan officer and you are new on a 200,000 loan you will get 1/2 of the origination fee. So you made $1,000.

Where I work, Wells Fargo will pay me as a broker 2% YSP, and I take 1% origination. I would as a broker make $6,000 minus 350 bucks I pay the broker.

Brokers can get better deals then the retail side of the bank offers their own clients. The reason is simple. Banks normally will give better rates to the brokers then to their own loan officers. Ive worked on both sides. The reason is because brokers do 95% of their business.

I have a friend that works at say *Bank A* Large Bank. She is a loan officer at *bank A*. She hasnt trained enough to be on her own. She is working on it. She was doing her own loan and *bank A* was waiving the Origination fee because she worked there. She did it through me, and we took it back to wells fargo. Why? Because I still make 3,000 and she saved 1,000. Even though she worked there. She couldnt even come close with her rate sheet to what I was doing. Same bank.

There is alot you will learn over time.

Chris asks…

How to check if that employee really works for that company?

I called an out of state bank that i have my mortgage with for a refinance and they said they will call back later on within 1 week. It’s been 2 months and a rep called back today said that he is with that mortgage company. My question is, how would i know he is not some sort of scammer or people out to get your money and information?

he did provide his full name and a direct phone number.


John answers:

The easiest way would be to call the mortgage company on the regular telephone number and ask for him by name. If he comes on the line I would assume that he works there. Another alternative would be to call the personnel department and ask to verify employment.

David asks…

how can can i hold off a repossion order for 6 months?

the mortgage company got a repo order (28 days) because i had a buyer for my house,but the day after the buyer started being silly and i think he has gone.i now feel i can just make the normal payments plus a bit extra towards arrears. i need the mortgage company to accept this amount just long enough for me to get to feb when the redemtion runs out so i can remortgage or sell without a loss/ccj. how can i hold them off?

John answers:

Most lenders will do anything reasonable to stave off a foreclosure. On the other hand, they are going to want some evidence that you can now make the payments, and why you can make it now when you couldn’t before. They are also likely to ask you to agree that if it doesn’t work out, they can proceed from this point without starting the process all over again.

If you cannot persuade them voluntarily, a lawyer may be able to, but that’s likely to cost you more than just letting it go. Once the Notice of Default hits, the lender generally has the right to demand you bring the obligations fully current in order to rescind it. Not to mention thousands of dollars they have already dinged you for being in default.

Note: If you’ve got 120 days late, the chances of you refinancing on better terms than you have now is small.

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