Refinancing mortgage with Bank of America ripoff?
A little background: my fiance and I bought our first home in February 2008. We qualified for a first time homebuyer loan. The interest rate is 6.3%. We do not pay PMI. We have about 11% equity. We have paid on time every month, and even paid a little extra towards principal.
A couple of weeks ago, I checked BOA’s mortgage rates and a 30 year fixed were at 5%. Refinancing into one fixed mortgage at that amount would save us a significant amount of money each month.
So I call to ask if we can refinance. They said we wouldn’t have to pay PMI, but the rate they offered me was 6.6%! I asked why I wouldn’t get 5%. They said it was because we didn’t have a whole lot of equity yet. But I feel that’s unfair because if I were a new customer just buying now, I would be getting 5%. Is this typical?
I’m pretty unhappy about this. I am contemplating applying for a mortgage at another (local) bank so we can refinance to a lower rate, but that means I’d have to go through that whole horrible loan process again! It would have been much easier with Bank of America since we already hold the mortgage with them.
Should I be more persistent with them? Or just accept my fate and let the “historically low” interest rates pass us by?
Hi, yes you’re right, we have a split loan, I forgot to spell that out. The interest on the larger chunk is low-ish but the smaller one is higher. Combined, the weighted average is 6.3%. I did suspect that they might tell us we would have to pay PMI if we got a regular 30 year fixed, but they said no, they just offered a ridiculous interest rate higher than our current. They did say, well yes, new customers will get a better rate. But how then are people refinancing at low rates? I guess they are going to another bank?
I’m trying to understand one particular comment…
“Refinancing into one fixed mortgage at that amount would save us a significant amount of money each month. ”
Are you implying that you have 2 mortgages? Maybe you did an 80/10 type of loan where 80% is your first, 10% is on a higher rate second? And the balance of 10% was your down payment?? Many loans are structured this way to avoid PMI. It works, but you’re stuck with a higher interest rate on the 2nd (usually in the 8-9% range).
It is likely that at 6.6%, they are figuring PMI into the interest rate if they end up refinancing at less than 80% loan to value.
How do I find a good mortgage lender?
I have been paying on my 30 fixed mortgage for 8 years now. Haven’t been late with a payment since 2006, but had a few late payments in ’05-’06 when my wife lost her job following a move to a different state. My credit is “good” at just under 700, last time I checked (last Aug). The mortgage I currently have is a VA loan, but it is at 7%!
I only want to shorten the term to a 15 year mortgage and continue paying about the same, or even a little more monthly, but at a reasonable interest rate (~5%). I just want to build up equity faster and pay it off sooner. I’m NOT trying to reduce payments or get a consolidation loan/line of credit.
One other key factor is that I no longer live in the home. It is a rental (single family home) which I maintain very well.
Bank of America won’t budge on refinancing or renegotiating the rate. I paid $168k for the house (brand new home) and owe just under $150k. I think the house would likely appraise for $180 – $185K.
Problem is that I get all of this junk mail which appear to be “bait and switch” tactics from nefarious lenders. I want a legitimate company to give me a reasonable loan with no hassle. Is that too much to ask?
The problem is that it is a rental property! VA does not do non-owner occupied, nor does FHA. Conventional will with higher credit scores (740) but not at the loan to value that you need. Rental properties max out at 75% L.T.V. Which you need more than that. Sorry!
My mortgage is not on my credit, i am about to default can the creditor put negative info without adding good?
After Hurricane Ike I made a decision to buy a house which turned out to be the biggest mistake in my life. I was a first time home buyer and had absolutly no experience in purchasing real estate. I had been denied by several banks due to my poor credit score at the time which was a 540…it has now improved to a 687. I was given an extremely high interest rate f 10.9 %. The closing of the purchase was done in the builders office with no closing company, lawyers , or bank present. Several months after living in the property I got a letter from the county showing back taxes. I contacted a title company to do a title search as well as to obtain a title certificate. The title showed 12 liens one of which was for a massive real estate loan for 20 million dollars. The tax certificate showed 5000 in back taxes. I payed the back taxes, but the leins are still there. The 20 million dollar lien has now been satisfied due to the lien holder forcibly taking possesion of the home. They accepted my payments and have since sold the loan off to another mortgage company. The mortgage has not been on my credit for over two years now .I have recently found out that my neighbor has not payed her mortgage since she recieved the same letter from the county showing back taxes, that was in may 2009. she has not been evicted/foreclosed , but is choosing to move on her own.
I am currently suing the builder/financer for deceptive trade practice act violations, but there is now no end in sight, the defendants counsel has quit, due to their lack of cooperation. this presents an indefinate legal process.
I am interested in buying a new house, but dont have money for a downpayment without stopping paying my mortgage so that i can save up.So far my mortgage has not been on my credit report i pay for credit monitoring and check it quite often. it has never showed up nor has there been any inquiries for a mortgage. can the new loan servicer put negative info on my report if i stop paying , since they have not made an effort to put the positive information.
There is no hope of rectifying this situation without me getting another place to live.
the 20 million dollar lien was on the house when i purchased it, the house was 160 thousand. there was all kinds of illegal acts in the purchase of this house, including but not limited to fraudulent hud statement, fraudulent county tax records, failure to disclose . my lawyer multiple felonies in my paperwork. how can a mortgage company put negative information on your credit when your credit report does not reflect that you have a mortgage.
You borrowed 20 million against the house? That is some house for a first time buyer.
You need an attorney, an obviously can afford one.
But for your question, yes, they can report the default. There is no law that they can’t start reporting now.
Mortgage modification questions…?
My husband passed away in October 2009. Our mortgage note was in his name. I made the $1250.00 payments as long as I could. He was primary “bread-winner” so to say. And without his income it became very difficult, and no him passing away was not expected. In July of 2010 it was just not feasible for me anymore with 3 young children to raise also. So they told me to try for modification. Yesterday I received the call that FHA will modify and put the mortgage in my name. They are lowering the payment to $850. a month, lowered the interest rate to 5%, total owed is $165,000. I can handle the 850. They also want $2000.00 with the first months payment for courtesy fees, I read that through the HAMP program, a borrower wasn’t normally asked to pay for modification. When I asked about this they told me that it was for the interest that accrued while I wasn’t able to make the payments. There is a 2500 escrow overage and I asked if that could be used for the interest that needed to be paid and was told that the escrow account had a shortage of 100, which is not right because I just received the paperwork on the escrow account 2 days ago. The escrow account has always been over due to not being able to give me the overage check because the note was only in my husbands name. So my question is…is Flagstar correct in wanting this 2k? I have been through the wringer as far as this mod is going and just want to make sure that everything is right…
I don’t need to hear you got yourself into this, so pay it…this was an unexpected turn of events otherwise I would be paying the mortgage.
I know that escrow accounts can have certain amounts of overage…ours is $500…property taxes and insurance were paid in August of 2010…escrow paperwork was received 2 days ago…thanks for you’re answer.
I was in a similar situation and was successful getting my mortgage modified. I had a bank lower my interest from 7.55% to 3.8% without paying any fees and having a much less sad story than you….
Here is what you have to remember…
1. You pay taxes
2. Flag Star still owes the Federal Government $242,768,978 from the Bail out.
3. The modification departments set up the rules and those rules benefit them
Here is how I fought my bank and won….
1. I went through the process as you did, and they were jerking me around as Flagstar is jerking you around.
2. I went though the annual report of my bank and found the names of all of the leadership of the bank. I checked and their emails end in @flagstar.com. I googled this and found that their email system is first name.last name @flagstar.com. For Example, the president name is Joseph P. Campanelli, so his email should be Joe.Campanelli@flagstar.com, or Joseph.Campanelli@flagstar.com. Include both versions to make sure he gets the email. Find as many email addresses as you can.
3. Here are Emails to the people controlling Tarp funds in the federal government – firstname.lastname@example.org, President@whitehouse.gov, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, email@example.com, firstname.lastname@example.org, BettySutton08@gmail.com, email@example.com
4. Find your senators, and house reps emails and include them.
5. Send the Government an email, and copy the leadership of Flagstar.
6. State exactly what you need, and mention that you may have to foreclose or shortsell your house.
I did this and the bank gave me EXACTLY what I was asking for. My bank was jerking me around for 5 months, and when I did this, they did what I wanted in 2 business hours.
I saved over $550 a month doing this, paid no fees, and all they did was lower my interest rate to shut me up. I was able to keep my house, and my 750 credit rating.
home mortgage questions– buying a house?
I recently signed a purchase agreement for a house, a bank mortgage company had pre-approved me. In this market today, they offered me an interest rate of 6.5% with the option of buying points. The house I am buying is a fixer upper/foreclosure.great deal at 47,000, I am taking out a conventional loan with 20% down (9400.00) so my loan will be for 37600.00.
Why are they offering me a 6.5% rate when the rates now seem lower? Is it based on my credit? Would the points be 1% of the loan amount? How much would each point lower the interest rate?
Are there any restrictions to requesting a 15 versus 30 year loan (I want 15– is this based on credit, or what is it based on to get this approved?)
I am preapproved, is there any reason that I can be ‘not approved’ now in this process (other than the appraisal on the property). What documentation will I need usually? They have already done a credit check, and I do bank with them already/checking.
When should I lock in my rate? ASAP, or should I wait, closing is feb 27th.
I have the 9400.00 down payment, I have 3 paychecks yet before closing, the closing costs are to be paid for by the seller, I still need to buy homeowners insurance. Do I need to pay taxes first too in escrow (I read that somewhere). should I take out a cash advance on my credit card to buy points if I need to (spend now save later) or a personal loan?
Thanks to all who have answered any of these questions
The reason your rate is high is the small loan amount.
Your debt/income ration mat not substantiate a 15 year loan.
Paying a point ($375) may be worth it. Plug your loan amount and payment in a loan calculator and see how much you’ll save per month by investing in discount points. Then, you can see how long it will take to make up your upfront cost.
The only downside, you can’t borrow money on a credit card to pay your closing costs. They all need to be verified as yours, unborrowed.
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