Mortgage & Refinance Questions

[benjamming]

What negatives are there to not having both spouses listed on a house loan if one spouse's score is low enough to force a rate change? Both are listed on the deed.

In a refinance, are appraisals typically paid upfront? I assumed they would be paid at closing. What happens if there aren't enough like houses around - wasted money on appraisal?

To not escrow is a 0.25% rate increase. Can escrow be removed after the refi closes? It wouldn't appear that the rate could change then.

Why are refinance rates ~ 0.25% higher than purchase rates?

Do I have to pay for title insurance? I know that I do for the lender, but for me?

Thanks.

 

[The_Jeff]

I bought initially and refi'd twice. Can only indirectly answer your questions. Am naturally annoyed at paying "the man" three times over on title insurance, appraisals, etc but pragmatically went along with it. Incidentally I timed my first refi right, my house was up in value, and I dumped PMI.

Appraisals are paid up front. In 2003 it was a drive-by. In 2010 it was a thorough in-house experience. When I was on the phone with, IIRC, E-loan, they took my info and immediately wanted $400 on my credit card to do the appraisal before even conditionally approving me. I think they were trying to lure me in with "money already spent". I ran away screaming.

I had to escrow my insurance/real estate taxes on my initial loan but not on either refi. Sounds like bank preference.

My first refi was actually technically a HELOC. I got the advertised (on bank website) "mortgage rate", not .25% over.

Sounds like this bank is trying to rip you off.

 

[bepperb]

I don't know because in Wisconsin you're basically one legal entity after you're married.

Yes, paid upfront by you or the lender. They will find comps. We closed last October and they were barely comparable, but that's their job and they will make it happen. Really they just need something nearby about the same quality and then they can do a price/sq foot analysis, and a cost to build analysis (requires no comps) and easily value your home.

To escrow taxes? I'd take the .25 in a hearbeat since the interest you get on savings is so low right now. Yes, there should be information about removing it later just ask your rep. You may need to own 20% of your home or wait some time before you do this.

??? I'd ask.

No change of title no title insurance, at least when we have refi'd.

 

[benjamming]

I've looked at 6 financial institutions, one of which is a credit union, & one is my current loan holder (citi). All but one (citi) charged 0.25% for not escrowing. Of course, we will escrow.

What's the point of title insurance for me anyway? The home was built by us in 2007.

The 0.25% increase for refi over purchase was just a passing comment for a loan originator. My purchase loan rate was 6%. Refinance will be 3.5%.

 

[The_Jeff]

Originally Posted By: benjamming


What's the point of title insurance for me anyway? The home was built by us in 2007.


You know all those fancy glass buildings in Manhattan? FIRE... Finance, Insurance, and Real Estate...

 

[JHZR2]

I wouldn't. I'd get the best rate as that is key - tens of thousands of dollars.

I refid to 2.99% a few months ago. I paid the appraisal by credit card first.

Interest rates on savings are so low that you're not making money sitting on your own escrow. Especially if you're wasting .25% for it. Do the math and figure out payback. Dumb.

Title insurance is garbage IMO if you know your history and status of your home. I'm not keen on paying to protect others in a business arrangement.

What scares me is if your spouse has such poor credit, what unreconciled debt might get you in the end. Obviously refi will free up funds; but use them for clearing debt, not stupid spending that was not affordable that caused the credit issues to begin with.

 

[benjamming]

JHZR2,

Of course, we will continue escrow if it will cost us 0.25%, or anything for that matter. Otherwise, we won't. Why would I not remove the escrow later on just to risk someone screwing up tax or insurance payments?

Anyway, the reason for the lower credit score is complete idiots in a billing department of a hospital. They billed insurance for my wife that she hadn't had in years, then sent her follow-up notices to an address that we haven't occupied for at least 7 years. We never knew about it until a collection agency rang us up. We got it settled & it's being taken off the credit report but it takes a while. I've not figured out how to have it removed as if it never happened but rather have to wait it out.

Off topic, but the latest fiasco with them was once again using an out-of-date insurance even though she just made a copy (again) of my insurance card. Oh, she also printed it several times before she realized she was printing it to a networked printer in another city! Privacy, yeah right. Anyway, I told them about, said it would be fixed. Nope. Only 2 of the 5 billers got the correct information.

 

[PandaBear]

Can you skip title insurance? I always wanted to do that.

 

[Oregoonian]

Originally Posted By: PandaBear
Can you skip title insurance? I always wanted to do that.


NO.....you can't.

 

[bepperb]

We did but it was because the old and new loans were both through the same bank (Wells Fargo). I can't see a new lender taking your word that there are no leins or HELOC's, taxes or whatever still on your house.

 

[Oregoonian]

Originally Posted By: bepperb
We did but it was because the old and new loans were both through the same bank (Wells Fargo). I can't see a new lender taking your word that there are no leins or HELOC's, taxes or whatever still on your house.





Exactly.....Title Insurance is required by any new lender.... for all the above reasons.

 

[benjamming]

I am skipping title insurance for me. Can't for (new) lender.

 

[rjundi]

My cousin got a $20000 sewer line fixed with title insurance. The neighbors tied into his(missed by title company) so it broke/backed up into his basement. The fix involved blasting, cleanup of basement and relocating neighbors on his property.

Another person I know spent $10k on a $90k condo in legal fees to sort out the sale of property a few years latter due to some serious problems in her condo setup. She skipped that box on prior sale.

It can be beneficial for its small cost.