Refinance and HELOC question

5 Replies

@Alfredo Martinez , my pleasure.  I agree with you.  I would just scrutinize the docs myself and address any question you have with your loan officer/mortgage broker.  It's their/our job to make sure you fully understand the terms.  Don't be afraid to push them hard on any specific issue because they definitely want your business and should be able to explain anything that seems iffy to you.  

As with any refinance, 2 things I'd just like to point out that you'll want to full understand or ask detailed questions about are:

1.  ADJUSTABLE RATES- If its an adjustable rate mortgage at some point during the life of the loan, you want to understand which index they use and what the margin/caps are.  

2.  PREPAY -  You definitely want to understand the prepayment penalty system for the new mortgage as it could dictate your future plans with the property.  

Hope this helps a little.

@Alex Bekeza So we are doing a cash out refinance, with a heloc. We are going from an FHA to conventional with a fixed rate. I asked the question about the interest only payments and this is his response. “Like most heloc it is an interest only payment is based on 30 year term, 10 year draw, and 20 year repayment. No prepayment penalty” Thoughts?
@Alfredo Martinez There should be no prepayment penalty. Not sure what bank you are refinancing with but I believe this is a good move for you based on the new tax laws not being able to write off HELOC interest anymore. You do not need an attorney to review your documents as you will have a closing agent that does not work for the bank that will represent both parties. My best advice would be to closely review your initial disclosure, your rate lock disclosures, and your closing disclosures. Most times clients hair fly through them without review. Hope this helps!