NATIONWIDE VA STREAMLINE RATE REDUCTION 4.5%

[jdkdan]

I am looking for some advice. I received a note in the mail and just got off the phone with a Loan Officer at Nationwide Mortgage Concepts. He is saying that he can combine my first and second mortgage at a rate of 4.5%. He said this is for Veterans only. For some reason I am skeptical about this offer.

 

My first mortgage is with National City at 6.0%, the payment is $920 and the balance is $115,707. The taxes/insurance make up $165 of the monthly payment. I have about 25 1/2 years left on this loan.

 

My second mortgage is with NFCU at 6.4%, the payment is $221 and the balance is $27,457.

 

The value of my house is around $165,000.

 

I have always paid my bills on time, but I do have a large amount of debt. I am pretty sure my credit score is about 625.

 

I am not looking to get any cash out of this, just lower my interest rate (if this is for real and will be for the life of the loan). Is there any reason I should NOT do this?

 

Thanks in advance for your advice!

Dan

[jdkdan]

I don't know if I am not getting any responses because I don't contribute to this forum, but I just don't have much experience/knowledge in this area. I almost made a mistake a few years ago and some people on this forum gave me great advice and kept me from making a big mistake.

 

I really would appreciate any advice you guys can give me. If I need to take a different approach to get advice please tell me how I should go about it.

 

Thank you very much in advance!!!

[breeze]

Patience, grasshopper - it's a weekend. This forum picks up a little more during the work week.

 

Did this new mortgage company approach you, or did you approach them? If it was telemarketing offer, I wouldn't believe a word of it. I get calls all the time - they tell everyone whatever they think will "hook" you into giving them an application.

[DallasLoanGuy]

when were you offered 4.5%

?

 

what fees are involved? did they give you a good faith estimate

?

 

 

i am skeptical too. but i dont want you to think noone wants to work thru this with you. it just seems too good to be true

[DallasLoanGuy]

btw, a streamline rate reduction is done when you already have a va loan and just streamline refi to lower rate.

 

so far, it sounds like the loan officer is very new at this.

 

was the 2nd lien a purchase money second? or did you take cash out?

[Brian B The Loan Professor]

I look at multiple rate sheets every day and watch the mortgage backed securities trading and 4.5% seems way too good to be true without significant buy down of rate.

 

Good Luck

B

[bosshaug]

This is pretty bold marketing. With a 625 score, you'll have to buy down the rate (for 4.5%) for a VA loan considerably. On top of that, you'll have to pay a VA funding fee. It is possible to combine your first and second, but you will need the property to appraise enough to include fees and closing costs--some real estate markets will not support this kind of value.

[bosshaug]

This is pretty bold marketing. With a 625 score, you'll have to buy down the rate (for 4.5%) for a VA loan considerably. On top of that, you'll have to pay a VA funding fee. It is possible to combine your first and second, but you will need the property to appraise enough to include fees and closing costs--some real estate markets will not support this kind of value.

[jdkdan]

Thanks for the responses. I will try to answer all of the questions in one reply.

 

I received a card in the mail last week offering 4.5%. I called them to inquire. The offer was made last Friday. The original offer was for just the first mortgage at 4.5% (which is in fact a VA loan). He called it a VA Streamline and said the qualifications were that my credit score was over 580 and I had a good payment record with my current lender. I asked about combining both the first and second mortgage and he said he could do it at 4.5% even though the normal rate to combine the two would be 5%. He did say that there would be about $8000 in fees that would be added to the loan. It looked to me like I would save over $30,000 over the life of the loan if it were at 4.5%. He said if I did only the streamline (1st mortgage) there would be no fees.

 

My second mortgage was bill consolidation/cash.

 

I have not sent them anything. He sent me a release form and asked me to sign and fax that along with other documents (loan papers, insurance, DD214, W-2s, etc...) He stated that once I sent him this paperwork he would work up the loan paperwork and have it approved, then send me a copy. I was thinking it wouldn't hurt to send him what he is asking for, then post what he sends me here for you guys to look at.

 

Again I really appreciate any insight and recommendations you can give me!!!

 

Thank you,

Dan

[jdkdan]

I wanted to clarify my last post. There are still fees invovled, whether I combine the two mortgages or just do the VA Streamlined Rate Reduction on the primary mortgage. The Loan Officer has said he will provide me Good Faith Estimates both ways to help me decide.

[jdkdan]

I wanted to clarify my last post. There are still fees invovled, whether I combine the two mortgages or just do the VA Streamlined Rate Reduction on the primary mortgage. The Loan Officer has said he will provide me Good Faith Estimates both ways to help me decide.

[jdkdan]

I got the GFE on combining both loans. I cannot seem to find a way to attach it here. If you need to look at it to give me advice, I will be glad to email it to you. Here is the way I see this whole deal.

 

*To continue with both of my currently loans, I will pay a total of $267,764.78 over the life of both loans. The monthly payment/interest (less taxes/insurance) is $976.

 

*To accept the refinance and pay for 30 years at $764.75 would be a total of $275,310. I would pay an extra $7545 over the life of the loan.

 

*If I was to pay $858 per month, I would pay it off in about 24years for a total of $247,104, which would be a savings of $20,661 over the life of the loan.

 

*If I was to keep my payment about the same as it is now, $955, I could pay the loan off in 20 years and would save $38,565. Of course this will require discipline on my part.

 

Please let me know if I am missing something or I have this correct. Again I truly appreciate any and all advice you guys can give me.

 

Thank you,

Dan

[Sofargone]

jdkdan I am in the final stages of a streamline re-finance of my VA loan which will be 4.5% 20yr down from 5.5% 30yr of which I have just under 27 years left. Its costing me about $6500 which will be tacked onto the loan. My payment will be about $13 more than it already is. But shaving 6+ years off the loan is what I am after.

 

Let me add that it was originally a 30yr 6.5. I then streamlined 3 months after closing to 25yr 5.5 and now streamlining again down to 20yr 4.5.

 

 

Sofargone

Edited February 11, 2009 by Sofargone

[DallasLoanGuy]

what is your current rate?

list all of the fees in the 800s section of the gfe for us.

[jdkdan]

Thanks Sofargone!

 

Dallas here is the info you requested:

 

Current rate is 6.0 on 1st mortgage/6.4 on 2nd

 

800 Fees:

Loan Origination: 1501.80

Loan Discount: 3018.62

Flood Cert: 18.00

 

Thanks!

Dan

[VA loan source]

In the years that I have been doing VA loans, there have been numerous times where my clients were solicited by lenders that do nothing but "troll" recordings for VA loans, looking to do VA IRRRLs. Unfortunatley, many of these companies charge high fees that mitigate the benfits a Veteran realizes from the refinance. I had one Veteran contact me that had done an IRRRL through one of the companies known for type of "marketing"...he was charged over $13,000 in fees, and saved around $30 per month in payment. He will not re-coupe his costs over the next 30 years.

 

It sounds as if you have done some good analysis on the payments both short term and long term.

 

As far as the rates, they have taken a big dip this morning, so it may be a good time to shop around and contact the lender you have spoken to to see if their rate has also decreased, as it should have.

 

Good luck and Thanks for serving.

[jdkdan]

Thanks again to everyone for your responses. To the folks asking what company, this particular offer was from NATIONWIDE MORTGAGE CONCEPTS in Kennesaw, Georgia, and it only applies if you have a current VA Home Loan.

 

I decided to talk to my current mortgage company, NATIONAL CITY MORTGAGE, and see if they could make a similar offer. I got the GFE from National City and the fees are less, but the interest rate is 4.75% vice the 4.5% I was offered by Nationwide. So with National City it actually comes out to about $20 a month more, which would be about $6500 if I took the 30years to pay off the loan.

 

I cannot really find any reivews or comments concerning NATIONWIDE. They are the best overall deal, but I would really like to know that I am not going to be sorry for chosing them over NATIONAL CITY for $20/month.

 

Again any comment will be greatly appreciated. I intend to make a decision tomorrow.

 

Thanks!

Dan