a bit of a bummer

iVillage Member
Registered: 06-25-2006
a bit of a bummer
10
Tue, 02-03-2009 - 4:41pm

DH and I went to refinance our mortgage and take advantage of the lower rates (we now have a 7-year adjustable mortgage and want to get into a 30 year fixed). Imagine my surprise when I found out that our credit scores had dropped since we purchased our home in October. Nothing drastic but enough that we could not get the best rate.

iVillage Member
Registered: 12-29-2008
Tue, 02-03-2009 - 5:00pm

I'm sorry about this...disappointing.


It doesn't really sound practical to refinance today...the costs eclipse the savings.

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Tue, 02-03-2009 - 6:36pm

Oh no.

All my best,
Danni

iVillage Member
Registered: 11-17-2007
Tue, 02-03-2009 - 7:14pm

About a year or so ago our credit score was mine was 820 and Raymond's was like 810 Then I went to transferring thing around to get a lower interest rate and it went down to like 720 for a while. I started reading about you should never be more then 50% of your limit that is when I started snowflaking on the 3 I had left to make sure that they were like 50% or close to it. One card I knew I was under that.


I got to watching Carmen and that board she has on her show. And they started talking about 30% and that is why department stores are so bad because the limit on them is so low You could have a 500.00 and buy a good dress and be over the 30% So then I started to really go for the cards that was higher then 50% to make them all as close to the 30% as I could. All the cards are under the 30% mark now.


Anyway it

iVillage Member
Registered: 03-07-2005
Tue, 02-03-2009 - 7:24pm
I just read today that to qualify for the best rates on refinancing a mortgage that the lenders want the scores at 740. I guess it's possible to refinance with scores under that but to get the best rate they wanted the score to be that high.
iVillage Member
Registered: 04-10-2003
Wed, 02-04-2009 - 7:17am

Sorry to hear this. I really have no advice to offer since I don't think credit scores are as important here as they are in the US. You need to have a good one in case you ever want to go for a loan, but I don't think it really impacts anything else. Although, I supose that could


Bex -

iVillage Member
Registered: 08-04-2008
Wed, 02-04-2009 - 10:05am

Arrgghh - no, not good enough a deal to refinance right now.




iVillage Member
Registered: 06-25-2006
Wed, 02-04-2009 - 12:34pm

Hi Marie -


We most defintiely do have a plan for getting our credit card debt down and for saving some money toward the closing costs so we don't have to take it out of savings. Ideally I would like to find the best rate in town AND a bank that will let us roll the closing costs into our payments so we don't have to pay the lump sum up front but that might be asking for a lot!


We are execting at least $9,000 back in taxes this year and that should allow us to pay off (and close) one card entirely and pay down the other two so that they are below 50% each.


That's our plan and we are sticking to it as they say!


Thanks for the support it most definitely helps to not feel like I am the only one struggling ....


iVillage Member
Registered: 08-04-2008
Wed, 02-04-2009 - 1:19pm

Wow a $9000 tax refund!




iVillage Member
Registered: 06-25-2006
Wed, 02-04-2009 - 1:42pm

I should clarify...


$7500 of the $9000 is the First Time Home Buyer tax Credit that we have chosen to get specifically to pay down our credit cards. I know some people feel strongly against this credit but for us it is a smart choice.


First-Time Home Buyer Tax Credit at a Glance



  • The tax credit is available for first-time home buyers only.
  • The maximum credit amount is $7,500.
  • The credit is available for homes purchased on or after April 9, 2008 and before
    July 1, 2009.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
  • The tax credit works like an interest-free loan and must be repaid over a 15-year period, at approxiamatey $500 a year.
iVillage Member
Registered: 09-26-2006
Wed, 02-04-2009 - 1:43pm

The mortgage banks seem to have established higher and more finely graded requirements for loans, that is for sure.

Last month I tried to refinance and consulted a number of lenders. To get the best rate, one lender required 30% equity (as opposed to the 80% that is often required for the best rate) plus a credit score of 760!

Two of the things that lowered my score were a number of recently opened credit cards (store cards so I can receive the coupons) and too many inquiries into my credit score. I'm a little annoyed at this drop in my credit score since I am actually making more and have much lower CC balances and debt ratio than in the past six years. I have been working hard on saving and it feels like I'm being penalized for it!

The lender that I chose employed an appraiser who made a number of mistakes, and the appraisal ended up coming in too low for me to qualify for 20% equity. By the time she amended the appraisal, the rates had slid, so it turned out better for me, although I lost my $350 appraisal fee in going to another lender.

I did end up qualifying to apply for yet another loan at a lower rate, and the appraisal was above 20% this time, so I hope I'll be closing on it soon.

I heard on the radio that 50% of loan applications are refused, currently. A significant number of people who inquire don't get as far as an application, which means that for the people who formerly had the potential and want to refi now, the chance of success is quite a bit slimmer than 50%.

Good luck on your debt reduction plan. It sounds like you'll be going back successfully to the refi process in short order!