Unable to Refi Duplex because of limit on points and fees?

Question

Hi all,

So we're trying to cash-out refi our first duplex, but the first lender we contacted (Quicken) told us we do not qualify for any type of refi because of the state limit on points and fees. The mortgage will be roughly $200K and property is located in Georgia. Is anyone familiar with this type of situation? We're just looking for some direction before wasting a bunch of time calling other lenders. Is this something we'd run into with other conventional mortgage companies and banks, or perhaps just Quicken? Should we be looking at private lenders instead? Any and all advice would be appreciated.

Nick

Shaun Weekes · Answer

You just need to find a lender that isn't charging a crazy amount of points.  @Jerry Padilla should be able to guide you on this.

Also note that you're going to be capped at 70% LTV if this is an investment property.  This is based on Fannie guidelines.

I hope this helps.

Shaun Weekes · Answer

Whoever you spoke to doesn't or can't lower their fees so most likely the QM test (Qualified Mortgage) is failing.  The borrowers can't be charged over a certain percentage in fees.  So, the lower the loan amount the harder it is to pass this test unless lenders, escrow, title etc., lower their fees.  This is one of the main reason’s lenders don't lend under a certain loan amount.  Usually around 50K

Nick Kourey · Answer

@Shaun Weekes So it's really just Quicken (and possibly others) but I'd be as likely to find someone charging less in either a conventional or private company? I'll definitely reach out to Jerry tomorrow. Thanks!