Refi's and the bailout

tishtoshnm Zone 6/NMFebruary 23, 2009

Any idea on how the bailout will affect banks and their refinancing. Will it make it harder to get a traditional refinance, raise rates for everybody not on the incentive program?

Dh and I are about to begin the refi process but he does not want to use the government program so I am naturally concerned. So, can someone please pull out their crystal ball or at least, their professional judgment? Thanks.

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This is being discussed a few posts below and I've included the link.

Here is a link that might be useful: refi

    Bookmark   February 23, 2009 at 2:12PM
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Hi Tishtoshnm,

Any idea on how the bailout will affect banks and their refinancing. Will it make it harder to get a traditional refinance, raise rates for everybody not on the incentive program?

From the inside, I can resolutely confirm;
We're all clueless...

The government is teasing & feigning at taking steps beyond common commercial logic, and has already made several "dead on arrival" hail-mary bailout attempts that have created all kinds of perverse unintended consequences.

We can ONLY be sure, at this point, that for the most part the government & regulators are COMPLETELY clueless of what consequences & results any further bailout efforts will actually create.

We don't know what the government is going to do,
Whatever they do, we are unsure what the consequences will be,
Whatever they do, it is obvious THEY are unsure what the consequences will be.

If you wait... you may be rewarded.
If you wait... you may be punished.

We are at the complete whim of politicians who are used to doing whatever it takes to earn votes from an irrational public, and have little-to-zero experience in the on-the-street real world of finance.

ADD TO THAT, the current administration was brought into power by people who are generally not business leaders or economic entrepreneurs... people who feel disconnected from direct economic creation & production, and blame "Wall Street" for their current malaise.

We're at sea, in a storm, with ripped sails and no rudder...

Buckle up!
Dave Donhoff
Leverage Planner

    Bookmark   February 23, 2009 at 2:31PM
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and the life raft has a hole in it.

    Bookmark   February 23, 2009 at 2:42PM
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tishtoshnm Zone 6/NM

Thank you for the perspectives. We have a good credit score but our ratios are not all that favorable right now. Hopefully within the next week we will be able to get to WF to determine where to go from here. My biggest fear is that rates will start jumping to the point where we will miss an opportunity to improve our situation.

    Bookmark   February 23, 2009 at 8:53PM
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I wish I knew what to expect as well. We jumped on a refi a few weeks back when we got a great rate and now it feels like we are just dead in the water waiting for the next step. I have no idea what is going on on the inside- assuming they are just swamped. They pushed us out to a 90 day lock, and later paperwork seems to show 120- the agent I spoke with thought sometime in April. I'm not thrilled, but there isn't much I can do except be patient.

Initially I was temped to wait and see if some kind of legislation encouraging banks to make 4% loans to any credit worthy individual might come through, but in my research, I discovered a few big banks/mortgage companies are no longer taking applications for loans under $100K. Apparently with all the recent demand, they are only taking what they feel will be most profitable to them- which excludes me. My feeling is that if the 4% deal does happen, more and more banks/companies are going to limit who they will deal with, for practicality's sake. If they can only process so many loans, why not take the higher values?

    Bookmark   February 24, 2009 at 11:13AM
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I also continue to evaluate if/when a refi made sense. So far, we are holding off.

I found the posts on this topic a bit overboard on the political drivel side. The last Admin oversaw this mess, let's all hope the new Admin can clean it up to benefit all.

Frankly, my tax $ is better served elsewhere than bailing out wall streetor anyone caught up in the mortgage mess. I wouldn't have given one red cent to any bank, trading firm, autos, etc..

    Bookmark   February 24, 2009 at 1:49PM
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I'm not going to enter this "blame game", but suffice to say there is more than enough blame to go around regardless of one's political bent.

Bit I will address the OP.

We just completed a refinance on our house. It took approximately 4 weeks to complete. It was with the same bank that has held our mortgage on this house and our former house - a total of over 20 years. We went from a 30 year fixed to a 15 year fixed at 4.25%.

Having talked to our banker prior to the refi, discussion and questions about the economy were many. Our bank did not issue mortgages, car loans or the like to "questionable" buyers. They stayed true to their conservative banking principles. We still, after all these years, had to submit all our paperwork just as before - W2's, tax returns, credit card statements and the like.

So, at least in our case, the bailout seems to have no effect at all. Our bank continues to have money to lend to qualified buyers.

Enjoy the journey.
eal51 in western CT

    Bookmark   February 25, 2009 at 10:10AM
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tishtoshnm Zone 6/NM

I will leave the above political discussion to the parties involved but I was wondering if someone could explain something to me. We contacted the bank where we have our 1st and 2nd which give us 10% equity in the house. I was hoping to refi the 1st at the lower rate. That is not possible because this same bank could not resubordinate the 2nd. I have to say that I just don't get it because if we were to foreclose, all of the money would go to the same institution anyway.

Right now we have a rate lock of 4.75% with 1 point origination to combine the 2 which will save us $200 a month. The saves would be closer to $400 a month (not chump change) if we would not be paying PMI but I feel the savings is still worth it. Now all I have to do is wait for the full loan approval.

Another question, can you use a CC for closing costs?

    Bookmark   February 26, 2009 at 1:02PM
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