Anyone Look at a Refi Lately?

[bflbob]

I happened to look at my bank's website a few days ago. I can refi my home for as little as 3.25% fixed, 15-years. I have to pay a couple of points, but WOW! That is low.

Then I went online and applied for the mortgage and was approved online at about 1am. Meeting to sign everything on Thursday.

Limited to 70% LTV, but that's fine.

 

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[Runum]

Sounds good Bob. I closed on my refi last week at 4.5% for 15 years, no points.

 

[Russ H]

You lucky rotters.

We've been showing no income (due to our project commitments, not being able to pay ourselves)-- so no banks want to loan to us.

All of our mortgages are paid by corps and other entities, so they're all current-- but we no longer "fit" the profile of a standard homeowner-- so no residential loans fit us right now!

Rats.

Goal is to actually get income next year, and try for a refi then.

But in the meantime, it sucks eggs.

-Russ H.

 

[rcardin]

It's been a while since I have been here on the forum, working on a masters degree has taken up my spare time. We refinanced in January at 4% for a 15 year note, down form a 30 at 5.35. 150.00 a month difference

 

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[Russ H]

Yeah, but what do ya do w/a million dollar house (the one we're living in right now), that has $850K in loans, and is prolly worth $400K, tops, in this market?

What bank is gonna want to refi that!? :smx4:

I'm guessing it'll be worth a million again some day . . . at this rate, I'm guessing 2030 or so . . .

(let's see how close I get)

-Russ H.

 

[unicon]

Russ's problem per say is a common problem, not so much being upside down in equity but the idea of having multiple entities that flow through showing little or no income personally.

This is the real problem with loan officers who either don't understand real income (producing power) or are bureaucratic packagers which must package a loan a certain way to sell it off.

As a borrower I could not care about a third party packageing requirement. If I run my business for the benefit of packagers one will not be around very long. Live by the government, die by the government.

A similiar example is tax returns which do not tell the story of your business, the management financials must have the perfect information. Tax returns are a function of the management systems not vice versa.


--- My situation is more streamlined with multiple properties (Schedule E's) each as a profit center, a wise man once said make each property handle itself (cash flow). Many will take profits from one entity and offset the losses from another - this is a bad practice in going against the grain and if lumped hiding information.

Because I shut down a couple of businesses as long as 15 years ago I was able to bring forward long term capital losses that sheltered gains for every year till 2 years ago when I had a large capital gain (6 figures) which wiped out the losses, this was a long term process.

This is only one tool to eliminate tax liability, you also can be fanatic about improving properties with every nickel that comes in. In other words you can control your net income by either turning on the spigot or turning it off.

Bankers do not put a premium on this control, nor do they understand or add back expensed items which could be capitalized.

---- Result now is that I attempted to refinance my home which was already at 5.25% for fixed 30 years to get a rate of around 4.35% at the time - I didnt even have my latest tax return down that showed over 150k in capital gains and a cash flow of over 200k. The bank would not refinance my loan.

The primary reason is that of packageing, the same problem as the housing bubble but in reverse. Both are deviations from reality.

You will never get rich living in other people's or institution's illusions.

 

[MBinMT]

We are currently about to reset a 5 year term on a commercial 20 year amort note, and it looks like we will trim over 1% from the current rate. It will drop at least $160 a month into our cashflow, and the bank officer had not one bit of a problem with our overall revenue stream, even with a lower W-2 portion of the overall picture.

On the other hand, we would like to refinance the place we live in, too, but it is a manufactured home, and it is like packing around a big bag of leprosy. Most of the secondary markets that used to buy this type of note have been decimated, and no bank is very high on the idea of carrying the paper internally. They all price a premium because they can't sell the note. Some just flat say "No. No way."

If you fit into the framework of what the banks now want, they have a lot of liquidity to put to work. Getting your situation to conform to their new requirements is the harder part.

Russ, sorry for your upside down-ness, but I know that your cash flow projections from 3 years ago allowed for you to survive this, even if the markets opinion of your current valuations is poor. Live to fight another day!

 

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