“Congress has extended tax deductions for homeowners paying private mortgage insurance through 2010. But to qualify for the deduction you must have bought or refinanced your home since Jan. 1, 2007. Families with adjusted gross incomes of up to $100,000 can deduct 100% of their insurance premiums, much the same as they deduct property taxes…”

Rhonda and I have conversed with Kelly via email per her request. I agree with you that the test is, why can’t it be a lender adjustment on the sheet?

“You could also test him by asking for the “cash back” to be done through escrow and not outside of escrow.”

Could this lender be angling for higher profits on the books, and sliding money under the table to improve their balance sheet for investor review purposes? Why else would they “prefer” it close at the higher number?

Ardell has access to your email address, the rest of the RCG writers do not.

Did you ask him to put that in writing?

If you are given a check at closing for 1.9%, sending that money to the lender as a principal payment generally does not result in a re-amortization of your entire loan balance….with the end result being a lower monthly payment. Instead you would just have a lower principal loan amount.

Typically if your loan is priced a certain way, you may be getting a certain interest rate because there will be “no cash back” to the borrower at closing. “Sending you a check” after closing means that this is being done without the lender’s approval.

You could also test him by asking for the “cash back” to be done through escrow and not outside of escrow.

If he insists it can’t be done this way for “various reasons” well you now know it’s because he is trying to hide this from the lender.

Remember that the company with the lowest points or rates may not offer the best service or other terms on your other fees.

Good luck with your refi!

PS. Your recision period happens AFTER you sign your final loan documents. It would be pretty nasty of you to recind the loan after you’ve already signed closing papers for a lower rate and fee.

Homeowners usually figure all this out way ahead of signing documents.

This was not likely a good place to put this question. The lender in this older post is no longer in the mortgage business. She got married and moved.

I will forward your question to Rhonda via email with a copy to you.

We showed him an offer from another lender, and asked him to match it. (0.5% in points and a lower monthly payment). He states, that for various reasons his people want the loan to fund the way it was written (1.95% in points and a higher monthly payment) but that he will send us a cheque for the 1.9% difference in points that we can use to make a prepayment on the mortgage – and that after reamortizing this will lower our monthly payment to something similar to the offer that they are matching.

It is my understanding that a balloon payment will only create a lessening in the length of the mortgage – not a reduction in monthly payment amount.

Is this true?

Does the above all sound too, too shady?????

Help!

If you need the lower payment intitially, you can always pay the high monthly when you can afford it. Anyone can turn a 40 year loan into a 30 year loan by simply paying the 30 year payment on their 40 year loan, as I understand it. Question is, what is the difference in the annual rate of interst on the two products?