Two part question...PMI and refinance
We bought our (1st) house in 2003. We had terrible credit then. We were able to take a loan out for $122k with a 7.37 interest rate for 30 yr fixed . And the PMI. I didn't think much of it then because we had such bad credit and were just happy to buy a house. Everything going great for the past 6 yrs. No late payments at all. We worked on our credit and it's much better now.
Last month, 5/3 called us and assured us we could refinance with them at 5.25 percent interest and no pmi. When he found out we were paying $300 per month for PMI, he said he never heard of anyone paying that much. Me either, but I never compared it with anyone else. Three hundred bucks for PMI a month is outrageous!
Hubby's credit score is at 679 now and mine is 697. Fifth third turned us down. They only said something about collateral and that we'd be getting a letter explaining it. We never got that letter. They also never informed us we were turned down, I only found out because I called and asked what was up.
We'd like to try to get refinanced again, this time through VA. Hubby is a retired army vet. We'd like some advice on how to go about this. Yep, stupid people need to learn the hard way sometimes, but we really need a break here. This $300 pmi each month is killing us. Our credit scores aren't that bad. What do we need to do to get a decent interest rate with no pmi?
So glad I found this board and I hope to get some good advice.....and yeah, go ahead and tell us how stupid we are/were....we know it...but we're trying to get smart.
by MChris99
from ,
. Aug 4th 2009
Debra Clark (Debra Clark)
#146 ranked lender in California - 42 contributions
$300 per month for MI is hard to compute on a $125K mortgage. Are you sure you have this amount right.VA is not a bad alternative for refinancing - you'd avoid LLPAs (read that as higher cost) for your FICO scores. Your scores have improved but with conventional standards and costs have been raised. Biggest downside with VA funding fee. This is a bit of a stealth cost since it is 100% financed but still it's a cost. Google "26-7" and you can read more details of eligibility, underwriting, etc. VA has a strange site name and maybe I'll be able to post the address here www.warms.vba.va.gov/pam26_7.html . Don't think it will be deleted.Before you do anything, get some details in writing from 5/3rd including a copy of your appraisal. Since there was an indication that collateral was an issue, you may be "upside down" which would make any refinance extremely difficult to impossible.Be aware that 5.25% with no points is just a fond memory right now. Rates have really shot up.
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