Re-fi question - Posted by Obi

Posted by Obi on February 05, 2002 at 13:36:08:

I derived the 10k pre-payment penalty from my existing lender. I’ll email you for more help.

Re-fi question - Posted by Obi

Posted by Obi on February 04, 2002 at 18:29:28:

I recently purchased a house last June. It was 296k. We owe 240k on the first mortgage @ 9.375%. There’s a second for 7k @ 10%. The first mortgage is a 5 year fixed. I filed for Chapter 7 and it will be 4 years in June. I’d like to re-finance but was told by a lender that it would not be a good idea because of my bad credit history and that I would pay alot of pre-payment penalty…about 10k. He also said that I would not probably get a lesser rate. Is there anyone out there that would help me to re-fi for a lesser rate? My house is currently appraised for 330k. Ultimately, I’d like to pull out some money to use it for REI and lower my interest rate. Any feedback would be appreciated. Thanks.

Re: Re-fi question - Posted by Shane

Posted by Shane on February 05, 2002 at 19:42:33:

If you purchased a home last June from a subprime lender there is a good chance you have a pre-pay. I would be conscerned about any potential solictor that doesn’t understand that. However that doesn’t mean it might not be worth it to refi. I would suggest waiting until June so it is four years since your BK so you can be elligible for a conforming loan. Or you may be able to qualify for an FHA mortgage depending on your area and loan limit regulations there. It makes no sense to refi from one bad loan to another. Have you reestablished credit since the BK? Have you been paying your mortgage on time? If you have been paying things on time since your BK and have established lines of credit you can qualify for the same mortgage rates as people who have never had a BK. Is it possible that your credit score is still bad because some of your old creditors didn’t zero out balances that were included in your BK. Many times people think that after a BK all of the former creditors due the honorable thing and clear up the deragatory marks they have placed on your credit. Sorry it ussually doesn’t happen that way. Often the real fight comes in having things removed that were included in the BK but not being reported that way. Many lenders don’t tell you this because it is in their interest to “have one on you” and stick you with ridiculous rates and obscene pre-payment penalties. Any questions or anything I can do to help please feel free to email me. Shane

Re: Re-fi question - Posted by Bob

Posted by Bob on February 05, 2002 at 13:08:48:

Its sounds like you have a lot of equity in the property and your bankruptsy has been over two years. Your credit score might not be as bad as you think and I know quite a few lenders who would take into consideration all the equity in the home and give you alot better rate. No way would the penalty be $10000!!! Email me I would love to help you out.