Have any of you done a home re-fi lately?

[Scott S]

Hoping to get a lower rate and after two and a half months of waiting we were denied for the first time ever.

We have great credit, substantial reserves, a new appraisal with over 25% equity and we were turned down because our 5 acres and home is on farmland.

We have used the same broker for over 10 years who specializes in middle to upper markets. She tells us that we are not unusual, the loan underwriters are turning down 9 out of 10 applications for the most trivial of reasons. She believes the home credit market may be this tight for a very long time..

If the best qualified buyers can't get loans, if will take years to get out of this mess.

Scott S

[Joe Wicked]

yea I tried to do the same and got turned down. I am not in the top 10% as far as credit goes, but I am not bad off. I was told though that if I start missing payments and can prove that I am trying to make the payments, they have a program to lower my rate, as long as my credit score stays high. I asked what will they do if I miss a payment, and the answer was report it to my credit, thereby lowering my score. Of course they did not see the irony in that. I guess I can just say "See my sig below".

[dave from mesa]

Yep
In the process now. What a PITA. Guess if you have good credit they don't want you. Have a cousin with iffy credit just buy a Condo in So Calif and didn't go thru all the BS that we have. Never missed a payment on anything. Just found out they want Comps from 90 days ago and nothing has sold in our zip code that is even close to our house/property. Getting real close to telling them to take a flying leap.

[blykins]

I just did one a few months back. Dropped my rate by 1.5%.

[BlueRooster]

I was lucky and timed it right. 4.75%...not bad. It took at least three months to close on that sucker. It took so long to get done they asked me for another pay stub at the end just to make sure. I feel that the appraisal that was done has never been more correct and relevent. He walked through every room, took pictures of every room and wrote two pargraphs about every room on his report. He used over 10 "comps". I'm glad it's done, I'll never do it again...........unless, of course the rates go to 3%

[jams]

I just got 4.75 myself. Great if you can get it.

[cobra de capell]

Originally Posted by Scott S

Hoping to get a lower rate and after two and a half months of waiting we were denied for the first time ever.

We have great credit, substantial reserves, a new appraisal with over 25% equity and we were turned down because our 5 acres and home is on farmland.

We have used the same broker for over 10 years who specializes in middle to upper markets. She tells us that we are not unusual, the loan underwriters are turning down 9 out of 10 applications for the most trivial of reasons. She believes the home credit market may be this tight for a very long time..

If the best qualified buyers can't get loans, if will take years to get out of this mess.

Scott S

What reason was given as to why you were denied?

RE lenders are being very conservative now, as they were prior to around 2002, but money is available when credit/equity/ability to pay is apparent.

[Joe Wicked]

The reason I was given is the Civil Judgement on my credit report. I got sued over a car accident and it is still being paid. That is it. No late payments on my credit report, no defaults, I don't have a lot of equity as the home is only a couple years old, I just wanted to take advantage of the lower rates.

[cobra de capell]

Originally Posted by Joe Wicked

The reason I was given is the Civil Judgement on my credit report. I got sued over a car accident and it is still being paid. That is it. No late payments on my credit report, no defaults, I don't have a lot of equity as the home is only a couple years old, I just wanted to take advantage of the lower rates.

Is it possible that you've ended up with no equity, given the decline in housing prices - especially relating to houses purchased since 2004?

Also, sound like that Civil Judgement is has bummed out your entire credit report.

[Scott S]

Originally Posted by cobra de capell

What reason was given as to why you were denied?

RE lenders are being very conservative now, as they were prior to around 2002, but money is available when credit/equity/ability to pay is apparent.

My home is on 5 acres surrounded by farmland, here in Oregon we have some very whacky land use rules that screw up a lot of real estate deals.

Scott S

[cobra de capell]

Originally Posted by Scott S

My home is on 5 acres surrounded by farmland, here in Oregon we have some very whacky land use rules that screw up a lot of real estate deals.

Scott S

Same as in CA - but, once farmland is re-zoned for housing - for example, one house and a small second house per 5-6 acres there is no problems in CA getting a loan. If your land is still zoned for ag use even though you have a house on it - that may be the issue.

Perhaps your current lender will lower the rate to market? I doesn't hurt to ask.

[fsstnotch]

I refi my rental property before I officially had moved out. I went through the VA though. I went with a VA Hybrid loan which was pretty unique. I am paying 3.5% now!!!

For those that aren't aware of the VA Hybrid: http://www.valoans.com/arm.cfm

yes it is an ARM loan but since I started out at 4.5% which was down 1.5% from my original fixed rate. The rate can only change annually and no more than 1%. it also can not rise more than 5% over hte initial rate for the life of the loan. I actually dropped 1% to 3.5% on my first adjustemnt. So even if the rate went up every year for the next 6 years to teh cap of 9.5%, my payments will still be less than if I had paid 6% thorughout the life of the loan.

If any of you have VA access... it's definitely somehting to look into.

[Rick Parker]

Needless to say the Banks have taken and continue to take some huge hits with real estate and we are ALL paying for it now. Consequently they are going to be very very conservative with any subsequent loans. They are now going to be fully and safely collateralized and protected for all unforseen circumstances. This means large equity or conservative Loan to Value ratios will be required in many cases. The favoritism that was previously rampant in many lending circles will be strangely absent. The regulators are only going to permit a round peg in a round hole, no more square pegs being made to fit by fudging on various factors, such as stated income etc. If it doesn't "Pencil out", it isn't going to happen. No one wants to be made an example of or get any bad press.