Tuesday, July 10, 2012

Refinance Part 2

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.

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