I posted earlier this week regarding our refinance research, we have decided to apply for Refi Option #1. I just spent the last hour on the phone with the mortgage broker filling out a mortgage application. The process is much more document and information intensive than the last Refi in 2009. We've got quite a bit of work to do to put all the information together that we need to return to the broker this week.
So, at present we have locked in a rate of 2.75% fixed on a 15 year term with closing costs of about $2500, plus the $500 mortgage application fee (which includes the appraisal cost). There is no prepayment penalty for the new loan after the first six months. I had to agree to escrow our property taxes, which I am not happy about since we don't escrow, in order to get the best rate.
The lender with the best rate requires a 75% loan to value ratio for Florida. Not surprising, when we refinanced with Wells Fargo in 2009 they required a 70% loan to value ratio (a normal LTV is 80%). Accordingly, we will need our home to appraise at $348,000. The broker has some concerns that it will not appraise for that amount. When we refinanced in 2009, I was sweating bullets but the home appraised for $415,000. I assumed, perhaps wrongly, that our home would appraise for a similar amount this time around because the market is actually better now than in 2009. I guess we'll have to keep our fingers crossed and look for comps to help the appraiser. I do know of one property that is similar size (when you count our carriage house space) that is two blocks away which sold for $400,000 in June but checking the property appraiser web site that sale doesn't yet appear.