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O'brian R.
  • Investor
  • Redondo Beach, CA
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147
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Refinance - too good to be true?

O'brian R.
  • Investor
  • Redondo Beach, CA
Posted Dec 5 2014, 09:21

Hey BP nation:

Here's my situation. I bought a Homepath SFH early this summer and have since rehabbed it and rented it out. At the time, we understood that the property offered the then 10% down Homepath program. Turns out, a few months later, the bank I got the loan through cannot sell that note to FNMA because it apparently "didnt qualify", even though FNMA signed the contract under those terms. Now, the bank is holding this note that they cannot sell. They have offered to do a refinance for me at a lower rate and no costs. It seems like a good deal, but I've never refinanced before since this is my first purchase of a property anyways.

I have 3 questions:

1) In a general sense, are there any disadvantages to refinancing that I should be aware of? 

2) Related to my scenario, is there something that my lender is not telling me? The bank says they'll cover all refinance costs and give me a lower rate. Seems too good to be true. 

3) I just got another property under contract, which needs to close by the end of the month. Since my lender was quite insistent to refinance, they had sent over an appraiser a couple weeks ago. So I'm assuming the refi may happen quite soon. I'm wondering if there may be any potential issues with completing a purchase while a refi is also going on? Or should I try to post-pone the refi even though an appraisal was already done? 

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