Refinancing a house what should we watch for?

Eric
My fiance refinanced his house years ago with an adjustable interest rate. Now, it's at 12.75% (insane!!) He wants to refinance, and is checking into a FHA secured loan through refinance.com, however his credit is flawed, and I am worried about predatory lending. This is in Minnesota, does anyone have any suggestions?

Danial
I would try and get a fixed rate mortgage before the variable rate goes up again. Unless the credit is below 600, I would think that you could still get a decent rate - it all depends on the credit and what loan amount you want.If you don't qualify, see if they will qualify you with a 75% loan to value.A couple of things to watch for are the fees that the mortgage broker or bank wants to charge you. Some of these are obvious, like Points (prepaid interest) and others are not: early payoff penalties, backend points, etc.

Johnny
Go directly to a reputable local lender - smaller banks are often the best. Stay away from brokers and ARMs.

Amal
FHA is not credit score driven, however, your fiance must have a clean mortgage history for the past 12 months - which means there wasn't any late payments that were 30 days or more past due. Although I am a mortgage loan officer in Maryland, FHA credit guidelines are the same nationwide. In addition to having any mortgage late payments, any other late payments on his credit report within the last 24 months must be explained in detail to show that he doesn't have a total disregard for his credit. FHA does understand that sometimes circumstances occur that are beyond our control, but they need to be reasonably sure that they won't happen again.When he is shopping for a mortgage, be sure and get a written good faith estimate from each person he talks to. He can compare their different fees and make a decision accordingly. All of the lenders/brokers have fees which will vary - some are much higher than others. One last thing...make sure that his property value is there in todays market. If he wants to take out cash, the maximum loan to value will be 95% of the value. And, of course, income must be documented to support the higher loan amount. Please feel free to email me with any addditional questions.

Margurite
With FHA his credit doesn't matter. Those loans are backed by MIP. He will have to pay MIP (mortgage insurance premium). As long as his income is sufficient he shouldn't have a problem.Try this link to find a local FHA approved lender. http://locator.fha.gov/cgi-bin/answers_h…