High Finance:
We’re looking at refinancing the house; there were some consumer debt stuff that built up while money was sorted over to the pay-the-medical-bills area, and it’s gotten stiff enough that we really want to get rid of it. Some of the credit cards belonged to outfits that have suddenly decided that No Matter How Good You Were, We’re Still Going To Jack The Rates To 30% and Make Up Our Dumb Losses That Way.
That, and rates for mortgages have dropped a good deal. (Our old rate was 6.25%, these rates are at least 1.25% lower)
What we have found, however, is that mortgages are now *very* influenced by the credit scores of the person taking out the loan. The ‘conventional’ mortgages only have decent rates IF you have a pretty spotless credit score.
Otherwise, they’re either (a) jacked up on a sliding scale that quickly goes astronomical the lower your score goes, or (b) available only as FHA loans, which require a monthly mortgage-insurance payment – and even then, there’s a sliding scale of how much the rates will go up depending on that all-important credit score. If you have a lot of bills, the credit score goes down…and the rates go sky-high.
We have two loan options in front of us; one has a higher rate but reasonable closing costs; the other has a lower rate but has a gazillion odd pay-at-closing fees to the loan people – along with hefty loan origination and points costs. (The difference is about $11k for us.) The actual cost of the two loans on a monthly payment basis isn’t much different; you end up borrowing more to cover the costs of the mortgage for the cheaper rate. The escrow amounts (for house insurance and taxes) are the same.
In mortgages, the lender is going to make their money somehow; in the case of the less-fees one, it’s a higher rate, and they sell the thing off shortly after they set it up to Someone Else and get bucks off of them for the loan paper. In the case of the other outfit, it’s the up-front fees. Both use a local set of go-to outfits to get the appraisal and whatnot done for them.
So I have to sit down with a family friend and go over the stuff and figure which one to go for, and talk it over with Susan. I have a slight preference to one of the lenders, and she to the other. We should make up our minds early this week, and hope to get the closing around the beginning of next month.