I currently have a jumbo loan that is not backed by either Freddie or Fannie. As such I am not eligible to use HARP (no idea why the home isn't under Freddie or Fannie as my understanding is typically jumbo loans tend to fall under one or the other and current loan is $620k). In any case, I am trying to refinance out of an interest only loan that is currently fixed but will evolve into a variable rate in the next 3 years. The problem is my credit score sits just below the "magic" number of 740. I'm at around 730 or thereabouts. We have no credit card debt at all. One car payment yet because of the "magic" threshold we are having a difficult time finding a way to refi that isn't going to actually increase our monthly by as much as $400-450. We are currently sitting at $4100 and pay no PMI. If you have any ideas I'd be very appreciative.
Answer Sounds like your credit is very close to the 740 mark that you are looking for. As a result of course getting the score to the threshold you are looking might be the easiest solution for you. If you have not already done so, opting out of certain credit offers can in fact improve scores in some situations, typically by 10-15 points. There is no guarantee that this will in fact improve the score however, and reviews are often mixed on how the results come out. I have seen positive results for many of my personal clients however, seeing positive results about 70% of the time. Here is a link: https://www.optoutprescreen.com/?rf=t
The second suggestion I would have is that you look at the reason for the increase to the payment. Typically the size of increase to payment that you are looking at comes from your loan maturing from the interest only to the fully amortized portion of the loan. As a result it is usually not just the interest rate itself that is bearing on that kind of a payment increase. See if additional interest only options are on the table that can buy you more time to adjust to the coming change.
Finally,the difference to interest rate from a score of 730 to 740 is usually not much, typically only an eighth of a percent. I do suggest shopping the loan as a result as you may find another lender willing to give some discounts to help out. The loan size you have is sizable enough that both mortgage brokers and mortgage bankers would want to compete strongly for the loan. Due to the Frank-Dodd act I would expect you might find your best deal from a small mortgage broker, dealing with the owner/operator of the business. They will have some flexibility that may help you get the better rate you are looking for.
I hope those suggestions help. Feel free to follow up with any additional questions.
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This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here
Can: reverse mortgage, mortgages of all types, debt management and settlement, foreclosure problems, real estate investment strategies.
Can't: real estate law, standard banking outside mortgage and debt.
2002-2004 President of the Utah Association of Mortgage Brokers (UAMB)
2004-2008 Board member UAMB, Fraud task force chair, PR chair, Legislative chair.
2002-2005 Delegate to National Association of Mortgage Brokers, Legislative committee.
1996-2008 COO Debt Free Living- Now Debt Fast Track. Founder of company- consumer debt elimination company.
1994-2008 President Secured Financial Freedom. Mortgage broker, serviced nationwide, 120 employees and handled real estate investment loans for the Carlton Sheets group and some Rich Dad clients.
2005-2011 ARES, LLC. Owner, Manager. Private money investments, business consulting.
2011- present, Reverse My Mortgage, LLC. Managing Member. Reverse mortgage education, marketing and sales.
2011- present. Salt TV Network. Financial contributor, Sales Manager.
Education/Credentials High School- Alta High graduated 1984
Brigham young University- 1986-1991 Business Finance Major
Past/Present Clients Salttvnetwork.com, Doreen Stein, PEI institute, Franklin Covey Coaching, Capital Financial Group, the rest are consumers- cannot give out names due to privacy but have had thousands of clients both for debt elimination and mortgage work.