My Wife is in the process of getting a rather large Worker's Comp settlement. Our plan is to pay our mortgage principal down and refinance.

In the past, we used a mortgage broker. Does anyone have experience with the online financing websites like Rocket Mortgage or Quicken Loans?

Thanks for any input.

Since you are not depending on them to move into you new home, I'd shop around to all for the best deal. Rate, points, misc. closing costs, etc.

I have a relative in the real estate business and her experience with the last one isn't too good. They have been less than on time, seem to use a low cost appraiser so they can mark up the fee, etc.

Whomever you talk to, get a locked in rate and a disclosure of all costs in writing before you make your decision.

Don't use your main email address when getting info because they will bug you to death with follow up opportunities.

Stay away from the Stagecoach!

quote:

Originally posted by JALLEN:
Stay away from the Stagecoach!

I agree with that one. Having worked in banking for a while and made mortgage loans, I have seen some terrible screwings. Generally, the best deals came from a local small town bank or credit union.

At least they're there to be held accountable. I'm not sure I have ever seen a great deal from an on-line lender.
Mike

Take a look at Churchill Mortgage. I got a Quicken loan, they sold the mortgage to B of A, and they sucked. They tried to foreclose on me when I was within 2k of paying off my loan, 15 years early. I had a recent experience with Churchill, and I was happy.

I've had good luck with US Bank. They don't sell the loans. As far as I can tell they service them for the entire life of the loan.

I'd suggest against this move, or at least suggest a consultation with a financial planner.

An alternative option is to invest the money for retirement. You could put into a CDs laddering it so that each one is due to contribute to your 401k and an IRA, maxing both off for the next few years. You can then take the write off for the contributions also you keep your mortgage interest write off as well.

Depending on your asset allocation you will likely earn way more returns in the market than you pay in interest. Even investing in bonds once you factor in keeping Mort int deduction and reduced taxable income from retirement accounts.

This is all dependant on risk tolerance, age, time to retirement. No way on here for me to tell you if this a good option for you. Consult a local professional.

quote:

Thanks for any input

In the context of any input, have you considered keeping your existing loan and investing the settlement instead?

Putting the loan into a "safe" investment, like an indexed mutual fund is likely going to get you a better return on your money than you'll realize by refinancing.

Of course, I have no knowledge of your situation or your reasons for refinancing. But, it's always a good idea to explore all options.

EDIT: Glad Skins2881 chimed in right before me as he certainly sounds a lot more knowledgeable. Revise my response to: Yeah. What he said!

Consider a streamlined refinance. We did one with a broker who told us upfront the mortgage would be sold to Flagstar Bank. Low cost, no appraisal fees, minimal paperwork.

http://www.thetruthaboutmortga...treamline-refinance/

Before you decide to keep the cash and the mortgage, and invest the cash, be sure you understand and tolerate the various risks.

American Greed regularly features victims who decided to make some investment that sounded really good, safe, ya know, their friends had been paid regularly for years, no problem, so the victims took out mortgages on their paid off home, and ended up losing both.

You say, 'but my advisor will take care of me.' That's what often caused the problem seen on AG. The adviser was prominent, prosperous, nice big home, new cars, well dressed, etc, and a crook. Unless you know, you don't really know.

I know dozens of folks who lost money in the real estate collapse of a decade ago, and ended up living with their kids, not always because of crooks, but due to a market change that caught them unable to avoid crippling losses.

Thanks for all of the suggestions. The reason for the refinance is to get my mortgage payment down. The settlement is replacing current income.

quote:

Originally posted by Fire Away:
Thanks for all of the suggestions. The reason for the refinance is to get my mortgage payment down. The settlement is replacing current income.

Still, consider investment that may offer a better return than your mortgage interest rate.

As an example, when a "pop star" bought her mansion in Watch Hill, Rhode Island, everyone claimed "she paid cash." I know that is not true. Instead, she invested the money and used the investment income to cover the mortgage costs and also uses the investment return to cover the cost of maintaining and running the property. (The pop star's dad is a financial guru.)

I'm not saying this is possible for you, but I'm thinking you may be able to structure it so that you're still coming out ahead instead of paying a significant amount in one shot.

YMMV...

quote:

Originally posted by Fire Away:
Thanks for all of the suggestions. The reason for the refinance is to get my mortgage payment down. The settlement is replacing current income.

The suggestion I made may not work for you then if your wife is not going to be able to return to work.

I'd still contact a financial planner to help you make the decision. Just beware the financial planner is incentivized to try and have you invest the money with him. So you may want to use him only for decision making process and another advisor for investing if it's decided that is the best route.

May I ask? Will she return to work, and pre-injury how long until retirement?

The last time I refinance it was to take advantage of lower rates. The mortagage broker we had used on two prior transactions was less than responsive - so for the heck of it, I went to our Credit Union. They offered a great rate, and as an added bonus they say they keep their mortgages in house - so I won't be changing who I write the check to every 7 months, like I have before.

Honestly, and I hope I dont step on any toes, the omly reason to use a Mtg broker now days is due to subpar credit.

quote:

Originally posted by heisrizn:
Honestly, and I hope I dont step on any toes, the omly reason to use a Mtg broker now days is due to subpar credit.

Not really true.

Mortgage brokers can be lower than banks.

To the OP, I do NOT understand your plan "to pay our mortgage principal down and refinance." I hope you don't you'll pay off your principal to zero then turn around and refinance it, right?

JAllen is right that you need to understand the various risks before you decide to keep the cash and invest. We're not saying you shouldn't do so but you need to understand the risks then you have to decide where to invest the cash.

I'm comfortable investing in stocks because I understand them. That's no disrespect to you as you could probably say you can repair your own car brakes but you would advise me not to do the same on my own.

You could pay it down enough so that you can afford a 15 year mortgage refi with lower rates and lower monthly payments than your current 30 year loan. The key is getting the lowest cost refi - no origination fees, no appraisal fees, no points, no nothing except a simple annual interest that is the same as the APR on the document that they have to show.

To answer some questions.

My Wife will not be going back to work and has ~3 years until retirement age.

Both my Wife and I have credit scores north of 800.

I will not be paying off the ENTIRE principal.

Can you not just make a large one-time payment to reduce the principal?

(assuming the interest rate on your current loan is attractive and you are satisfied with the loan otherwise...)

Yes the payment will remain the same but you will have drastically reduced the length of the loan and overall interest and do not have to go through the nutroll / cost of a complete re-finance.

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quote:

Originally posted by Sig209:
Can you not just make a large one-time payment to reduce the principal?

(assuming the interest rate on your current loan is attractive and you are satisfied with the loan otherwise...)

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I believe the idea is to pay off the loan with the cash from the settlement and a new loan in the amount of the remaining balance which new loan will have a significantly lower payment.