is streamline refinance a good choice?

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HELLO TO EVERYONE OUTHERE I HAVE A QUESTION ABOUT A STREAMLINE REFINANCE, I OWED 268,000 ON MY CURRENT MORTGAGE I BEEN PAYING IT SINCE AUGUST 2008 NOW I LOST MY JOB AND MY INCOME IS LESS THAN WHAT I HAD IN AUGUST 2008 AND I WANT TO DO A STREAMLINE REFINANCE AND THE LOAN OFFICER TOLD ME IS THAT ALL THE MONEY I NEED IS MY MORTGAGE MONTHLY PAYMENT TO DO MY REFINANCE WITH NO CREDIT CHECK, NO APPRAISAL,NO INCOME CHECK AND MY QUESTION IS, IT’S THIS A GOOD CHOICE, IF I DON’T PUT ANY MONEY FOR CLOSING COST HOW ARE THEY ABLE TO PAY THE ATTORNEY, AND THE PLACE WHERE THE CLOSING TAKES PLACE? WHERE DOES ALL THAT MONEY COMES FROM? DOES THIS WORK? IS THERE A CATH TO IT? WELL I HOPE I CAN GET SOME ANSWERS FROM THE GOOD PEOPLE AT YAHOO ANSWERS THANK YOU AND HAVE A GREAT DAY.

My mother signed on my home loan for me last year for me. My credit was not awful or perfect but it was ok I would say, maybe around the 630 range; but I needed a little more income and I couldn’t use my husband because his credit was not as good at the time. So my mother did this for me and I am and will always be grateful to her for this, no matter what the outcome is. Anyway, I refinanced in January in order to get a lower rate. Okay, so now 6 months later, my mother wants to refinance her house. She has an 80/20 loan (if that makes sense), so she is making two payments. She wants to refinance so that she can have one payment that is a lower amount. My loan officer had told my mother that when I refinanced my house, she would do my mothers so that it would be at the same time and it would go through. Only when they did the appraisal for my moms house, the houses in her neighborhood that sold for 220,000 in 2006 are now selling for 180,000, so she told my mom that they had to wait 6 months and then they could use other properties outside of her neighborhood (A house was bought in the neighborhood in October and she told me that you have to wait 6 months when a house is sold to use outside appraisals, its been over 6 months and she hasn’t called my mother despite calls to her) My mother is a retired teacher so she gets her retirement benefits from TRS every month and its about 2500 I would guess. Anyway, my mother decided to go to someone else today so that she could get this done ASAP so she would only have the one payment going forth. She called me all upset because the guy told her that she wouldn’t be able to do it because of her being on my loan and that she would have to make about 2 or 3 thousand more dollars a month. She said that the guy told her that the reason my loan officer was not calling her back was because she knows that my mother won’t be able to refinance since she is on my loan and even though she doesn’t pay my note, it is on her credit and essentially she is responsible for it (my mother has never paid anything on my mortgage, Ive never been late on my mortgage, I actually give my mom money so that she can do extra things that she has a desire to do, I do this because she is paying an extra 500 per month to pay for her husbands funeral; he died last year and did not have any insurance…they had only been married 3 weeks and had not finalized insurance, medical, dental, etc). The new loan officer guy told my mother to tell me that I needed to do a streamline refinance without the appraisal in order to take her name off of it. I don’t think I can do this because I won’t qualify by myself and I know my credit is not the same as it was when I first got the house in June 2008. I did a streamline refinance in January when she refinance with me for the lower rate but someone did do an appraisal. I can’t use my husband again because of his credit due to old blemishes and then 2 rental properties in his name…his income ON PAPER just wouldnt support it. I am seriously stressing out because I want my mother to be happy and I want to do whatever I can to make it easier for her. However I don’t see how I can refinance by myself, it just wont work. I can afford my house perfectly and make enough money to make my payments and other bills comfortably…I know credit is a tricky thing when it comes to what things look like on paper. Can anyone help me with this in terms of what else we could do? I know that different loan officers and different companies do different things and what one can’t do, another may be able to. What could I do to help my mom? I am sorry this is long and has so many details. I just wanted to give as much info as I could to help anyone understand the situation and give me some advice. Please help!!!

8 Comments
  1. Reply
    al t
    February 19, 2011 at 1:54 pm

    A “refinance” is a whole new mortgage (you will not qualify because you are unemployed)….a “streamline” stays with the current lender, but all they do is change the rate or term of the loan. If you bought the house in August ’08, you probably don’t have achance in Hell for either….try selling it and just bail out before you screw up your credit.

  2. Reply
    vette802002
    February 19, 2011 at 2:18 pm

    first guy is right….streamline is the same bank redoing your mortgage for new interest rate and years..without any charge..

  3. Reply
    LuxuryBanker
    February 19, 2011 at 2:29 pm

    It sounds like you have an FHA mortgage. If that is the case, the loan officer is correct in that you can be approved without income, assets, appraisal or credit report. As a side note, however, some lenders give better rates when the borrower has a score above 620. And contrary to the previous answers, it doesn’t always have to be refinanced through the same bank. Your balance stays the same, and the money for closing costs is paid by the new lender for the new rate you will have.

  4. Reply
    ☼AstrologerJuliAnne☼
    February 19, 2011 at 3:08 pm

    Please do yourself a huge favor and do NOT pay some company to help you modify or refinance your loan. Call your lender and talk to the loss mitigation department. Save the money this company wants to charge you, and use it to pay your mortgage if you get your loan modified etc. The whole bit about them not needing a credit check or appraisal etc tells me that this is a scam and you are going to be sorry if you sign something or hand over a fee. DO NOT DO IT. You will rue the day you ever met these people.

    Go to these forums and read how others modified their loans on their own, and didn’t get ripped off by these fly by night companies:

    http://www.loansafe.org/forum

  5. Reply
    David B
    February 19, 2011 at 4:03 pm

    if your story is that dang long, you need professional advice, not from anyone on here

  6. Reply
    J. Mark
    February 19, 2011 at 4:52 pm

    You could consider co-signing on hers or she may need a loan modification.

  7. Reply
    Spock (rhp)
    February 19, 2011 at 4:56 pm

    difficult and tricky indeed. here’s what comes to mind, but it’ll cost —

    with the support of your present mortgage company — they’ll need to allow an assumption and issue a release — you sell your home to an investor. This gets rid of the debt [your mother’s co-signing your loan].

    Then you turn around and buy the house back from the investor on some sort of deal that approximates a land contract or lease to own arrangement. [He finances you without paying off the underlying mortgage. This has become tricky as mortgage companies don’t want to allow them and rewrote their agreements to try and force repayment on anything close to a “sale”.] Legal details depend on the state where you live and you’ll NEED serious advice to pull it off.

    The idea is that the investor gets the assumption because he has a tenant in hand [you]. He’ll probably have to agree to an increase in the interest rate to do this, which you’ll be paying. He’ll also want something for himself for, in essence, letting you use his credit.

    When the co-signed loan is gone, you mother’s re-fi will be in much better condition. Absent knowing a lot more about her credit, I have no idea if it’ll actually happen or at what rate — or even if this will make it possible.

    GL … and finding the investor will also be tricky — ask your RE attorney for help with this.

  8. Reply
    Michael T
    February 19, 2011 at 5:10 pm

    Even though she doesn’t make any payments on the loan, your loan is included in her debt ratios and she will be responsible if you default on the payments. Also if you miss any payments, those will be reported on her credit report as well as yours.

    The only thing I can suggest is that you and your husband build up your credit so that you can refinance your home without her as a cosigner. You should do as much as humanly possible because she is only in that situation because of you and your husband.

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