mortage guys, help.

[look 171]

My first is with BofA. THe balance is 118,000. I am about to refinance my home but I have a line of credit with a smaller bank, Bank of the West. I used all of the funds, 250k for an investment property. I want to shorten my first to 15 years due to the low interest rate. My current home is worth about 650-700k. My question is will BofA force me to cancel my line with Bank of the West so they will control the total amount. The interest with bank of the west is so good that I do not want to have to reply again. I do not want to lose me line of credit. It will all be pay back by march or April this year. It is revolving. My rate is always one point below prime. Bof A want Bant of the West to sign a Subordination requirment. What does that mean? They stay as the 2nd lender?

Jeff

[ths911]

I am a few years out of the business but it is a pretty straight forward situation.

The subordination agreement will keep Bank of the West in second position. If B of A is willing to do the loan with a second left in place, that is a good thing. The question is will Bank of the West sign it? They may not. Have you approached them yet?

Good luck.

[look 171]

I talked to their loans guy at my home branch at B of the West and he claims they should keep everything the way it is. But then again, it isn't up to him. Normally, is this what Bof A would do in today's economy, leave the 2nd in place? Why would they not? That means more money in their pocket if they don't.

I have started the process and opened escrow only to realized after reading a page that would required Bof A to freeze my line with Bank of the West. I started to think about the outcome. What if I decided to bug out right now? I only loose the handeling or loan fee of a few hundred bucks. That's well worth the money if I could keep my line with B of the West unchanged. So I have been told from the agent at B of the West that they will keep everything exactely the same if I were to refi through them. Only thing is that they are about 1000 bucks more in closing with .3 point. Bof A had no point and no apprasial. I am thinking about going with Bank of West just to be safe. If I go through with Bof A, when the process gets to the end of escrow should they force me to close my line, can I pull the plug and not go throught with the refi? THis way nothing will change and everything is reversible, right? Can I go through the same process with Bank of the West and use the same escrow co. to avoid escrow and title fees. Thanks

Jeff

[RANDY P]

Originally Posted by look 171

My first is with BofA. THe balance is 118,000. I am about to refinance my home but I have a line of credit with a smaller bank, Bank of the West. I used all of the funds, 250k for an investment property. I want to shorten my first to 15 years due to the low interest rate. My current home is worth about 650-700k. My question is will BofA force me to cancel my line with Bank of the West so they will control the total amount. The interest with bank of the west is so good that I do not want to have to reply again. I do not want to lose me line of credit. It will all be pay back by march or April this year. It is revolving. My rate is always one point below prime. Bof A want Bant of the West to sign a Subordination requirment. What does that mean? They stay as the 2nd lender?

Jeff

1) If you are not taking any additional cash out during this refi that should be OK

2) Bank of the West will want to know what the new payments will be if you go to a 15 year note- if the new payments exceed their guidelines they may ask you to shut it down. If that happens, go with a 30 year note and just overpay it monthly- same thing and a slight rate hit.

3)- the suboordination agreement is an agreement that says Bank of the West will step aside and go back into 2nd lien so B of A can retake 1st lien. It's necessary.

Also- my experience is before they shut down the line (usually due to excessive new debt) they will call you and ask you to verify that is what you want to do.

Based on what you're telling me, no they shouldn't cut it off- assuming the new house payments aren't astronomical in relation to your income.

rjp

PS screw B of A they are hideously expensive and painfully slow. If the Bank of the West says they can do it and leave all terms alone, go for it.

Maybe you're HARP eligible. Ask.

rjp

[look 171]

Thanks Randy and Tom. That makes me feel better.

[911Freak]

Originally Posted by look 171

If I go through with Bof A, when the process gets to the end of escrow should they force me to close my line, can I pull the plug and not go throught with the refi? THis way nothing will change and everything is reversible, right? Can I go through the same process with Bank of the West and use the same escrow co. to avoid escrow and title fees. Thanks

Jeff

Yes, it's call 3 day right of rescission. This applies only to refinances. This 3 day rule gives you 3 days after you've signed your loan docs to back out....

[Schrup]

Originally Posted by RANDY P

1)
PS screw B of A they are hideously expensive and painfully slow. If the Bank of the West says they can do it and leave all terms alone, go for it.
rjp

I received a letter about a week ago from my faltering bank stating the BoA was assuming my mortgage. I vowed 10 years ago that BoA would never see another penny of my money because of their predatory way of doing business.

I'm currently refinancing a 15 year mortgage with USAA as well as dumping my bank. USAA will now be my bank, mortgage, credit card, & insurance company. BoA can kiss my lilly white ass.

[RANDY P]

they do suck. B of A can rot for all I care.

rjp

[look 171]

Originally Posted by 911Freak

Yes, it's call 3 day right of rescission. This applies only to refinances. This 3 day rule gives you 3 days after you've signed your loan docs to back out....

Great to know. Thanks you sir.

[look 171]

Originally Posted by RANDY P

they do suck. B of A can rot for all I care.

rjp

Yeah, they all suck; all of the big banks. The are so many of them around, and it makes it easy to get into any branch to do business. That's why I still stay with them and the rate was not bad at all. I do love my lilttle Bank of the West. They are the best. They call me personally if they see any problems.

[911Freak]

Originally Posted by look 171

Great to know. Thanks you sir.

My Brother has been with Bank of the West for years... very nice little institution, although they couldn't match WF rates on his home purchase last fall, so I did his financing through WF for him..

btw- we use USAA for the majority of our banking as they have the best customer service, bar none, great programs from auto insurance to mortgages to cc etc.

Good Luck hope it works out for you

[911Rob]

Good for you reducing to a 15 year term!
that is very smart.... take my word for it.

Second cudos for using an LOC to invest in a RE investment;
That is also smart. Heh, heh.

Keep those repayment terms to 10 or 15 years and you'll always do well imo.

My two canadian cents worth.

[john70t]

There are a few good mortgage calculators on the net. Be sure to keep a safe buffer, and plan for a combination of the worst to happen at some point.
-Can you transfer your first mortgage to Bank of the West?
-Do they have penalty for extra payments?
-Do the extra payments apply towards the principal or interest? Remember, interest is the majority of the total cost of real estate.