Refinancing to conventional loan (30y fixed) - charging us $3500/ 1 point

[Anonymous]

We are refinancing our home. Original loan was VA. We have 100k in equity, lots of $$ in bank, only debt is my student loan, in which i owe less than half of original loan amount (no credit cards/car payments,etc). Our credit scores are in the 700s and 800s. According to our credit union, we are a 1% risk and they are charging us $3500.00 penalty/1 point.

This seems really unfair. Can anyone explain?

[Anonymous]

What is the value of the house? In other words, you have 100k in equity but what your percentage of equity? If it is less than 20% you may have to pay a point to avoid paying PMI each month. We just refinanced and had to do that because we only had 12% equity in the house. We did the math and it still worked in our favor given the super low interest rates right now.

[Anonymous]

You can pay points for a lower rate, or not pay points and your rate will be slightly higher. Remember points are tax deductible...shop for rates on bankrate and see if your CU will match a bricks and mortar lender. If not, take your business elsewhere. For us, our credit union was always about 1/8 of 1% higher than others, I think that is typical. Usually CUs are better about closing costs though.

[Anonymous]

On a refi I think points are only tax deductible if spread over the life of the loan (so 1/30th of the total each year)?

I would shop around-- as much as I love our credit union they don't have great mortgage rates.

[Anonymous]

Anonymous wrote:What is the value of the house? In other words, you have 100k in equity but what your percentage of equity? If it is less than 20% you may have to pay a point to avoid paying PMI each month. We just refinanced and had to do that because we only had 12% equity in the house. We did the math and it still worked in our favor given the super low interest rates right now.

the house appraised at 420k. Our loan was originally 330k. So 90k in equity. I don't know what the % of equity that is (i'm a math dummy)

[Anonymous]

Anonymous wrote:

Anonymous wrote:What is the value of the house? In other words, you have 100k in equity but what your percentage of equity? If it is less than 20% you may have to pay a point to avoid paying PMI each month. We just refinanced and had to do that because we only had 12% equity in the house. We did the math and it still worked in our favor given the super low interest rates right now.

the house appraised at 420k. Our loan was originally 330k. So 90k in equity. I don't know what the % of equity that is (i'm a math dummy)

Okay, 20% of equity on a house appraised at 420k is $84,000. So, if you have $90,000 you are fine. But, I'm confused. If your original loan was for $330,000 shouldn't you have paid it down some by now? You don't still owe 330k....you should owe less which means you have even more equity! Look at your statements to see how much you owe.

Regardless, I agree that you should shop around for a better deal.

[Anonymous]

paying for points is usually a gimmick. get at least 5 different lenders competing for your business and then pick one.

sounds like you are refi'ing from an ARM or I/O to a 30 yr fixed?

[Anonymous]

Anonymous wrote:paying for points is usually a gimmick. get at least 5 different lenders competing for your business and then pick one.

sounds like you are refi'ing from an ARM or I/O to a 30 yr fixed?

frustrating!

We are going from a VA/30 year fixed to conventional loan 30 year fix. Same CU did our original loan.

[Anonymous]

I am in a credit union, and their rates were HORRIBLE. It is a commodity business. You need to shop around. For my financing they wanted about $12,000 in fees, and that was NOT even labeled as points!

[Anonymous]

Don't use a mortgage broker for $10k-12k of FEES!
Just go straight to the lenders: Wells Fargo, Bank of America, Chase Manhattan, PNC, Citi, etc. You can try other credit unions if you want. Should be $500 or less of fees for a conforming size loan, same various loan packages and market rates.