Financing in 92701>Question Details

jljuan99, Home Owner in 92701

I have a 3 yr. fixed loan @ 4.21%, I was told by the bank after 6 months i would get refinanced into a 30 yr fixed, would i keep that same rate?

Asked by jljuan99, 92701 Tue Mar 8, 2011

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Keith Jones’ answer
What you may have is an adjustable loan that is fixed for 3 years and that you will be eligible to refi in 6 months, not that you are guaranteed a refi in 6 months. Find out now, If that is the case I would advise exploring fixed rate options with a comfortable long term payment at the 6 month period. You also need to find out if there is a prepayment penalty and if so, address that with your lender. A lot can change in 3 years. Proceed with caution. Many people who have lost their homes started with the "Take this loan now and there will be something better for you later" promise. For these people, later never came.
0 votes Thank Flag Link Sun Aug 21, 2011
It will depend upon the terms specified in your documents. In some cases, the loan is simply convertible for a specified period to a 30 year fixed rate (at a specified index plus .625, for instance) at no cost, which in the current market, is probably a very prudent move for you.
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0 votes Thank Flag Link Wed May 18, 2011

You may want to call the person you did the loan with and ask them. I would bet that they told you 6 months to REFI so they could use a new appraisal or if it is an FHA loan, that is the length of time needed in order to do a Streamline refinance. Rates are very low, so my advice to you would be to get out of the ARM and into a FIXED mortgage.

Good Luck
0 votes Thank Flag Link Mon May 9, 2011

Your loan will most likely convert to an adjustable rate, which will be determined by combining a fixed margin, plus an index (a variable that tracks an economic indicator). There are generally no loans that trigger a definite refinance after any time. You CAN refinance, but you're not forced to and there's no guarantee (usually) that you would qualify at that point.

The best thing to do is not panic. Review your loan documents either with your loan officer, or someone new who you feel can help. Get an understanding of your current loan first, then determine if it will suit your needs going forward. You may just find that you're OK with the terms you have and can reasonably foresee. If not, you can then also begin to research your options.

I am here in CA as well and would be happy to help. There is no cost or obligation to inquire further. I help clients convert from adjustable rate loans all the time, and I also tell a good number of them to stay put and keep the current loan.

Thank you,

Rob Spinosa
0 votes Thank Flag Link Tue Mar 8, 2011
Hi there,

No your rate will most likely go up...and might go up quite a bit. Get your loan documents and read what it says. There are some nice rates out there, so if necessary you can look into a refinance. I am not a mortgage broker, but there are many very good ones here on Trulia....they can also help you read your documents and make decisions.

good luck to you,

0 votes Thank Flag Link Tue Mar 8, 2011
This might be a question you should be asking the bank...

Good luck,
0 votes Thank Flag Link Tue Mar 8, 2011
No. There is no such program. More than likely the loan officer was simply telling you that you could (with a whole new requalification process) refinance into a 30 year fixed rate. This would simply be a standard refinance and you would have access to whatever the current market rates are. It'd be interested to hear why you have a 3 yr fixed rate when (as it seems) you are interested in a 30 year fixed rate.

Frank Sandoval
California Dept. of Real Estate #: 01371776
NMLS #: 271709
0 votes Thank Flag Link Tue Mar 8, 2011
Hi jljuan99:

You need to find and pull out the loan documents the escrow company provided you (specifically, the Promissory Note and the Adjustable Rate Rider) to understand what your loan's index and margin are. These docs will have all you need to determine what will happen to your rate.

Looking for a short-cut to the answer? Call the loan person you worked with and ask!

Best, Steve
0 votes Thank Flag Link Tue Mar 8, 2011
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