VA Loans

[C-21.Pilot]

We closed a year ago with Alan Scarpa from NBOKC....3.75%. Not too shabby....def beats the original 6.5% we took back in 2006!!!

[Buenos Diaz]

Just closed with Dave Devine from NBOKC. Best customer service seen to date! I have closed several loans with USAA and other banks and have to say that Dave and NBOKC completely put them to shame. I closed in half the time USAA could and he beat their rates. He always returned emails and phone calls, most of the time on the same day. I can't say enough good things about him.

Buenos

Edit to add: I was sent on a 10 week tdy with only 3 days notice and Dave worked hard to move my closing date up by a week so I didn't have to close with a power of attorney. I doubt USAA would of been able to do that.

Edited January 18, 2013 by Buenos Diaz

[Shakey]

Closed with Greg Mealman from NBOKC on Wednesday, customer service was exceptional! The 3.25% gave us reduced monthly payments by ~$150an and overall net gain on closing.

[Swizzle]

Closed with Dave Devine from National Bank of Kansas City on 25 Jan @ 2.875%, $2k spent on points. Extremely happy with how everything went and how Dave handle all the paperwork/transactions. I highly recommend him and will be going to him for an investment property in the next few weeks. He was organized, personable, reliable, and timely with everything. I'm extremely pleased...

[Cap-10]

Closed today with Aspen Hill from NBOKC...30 year VA Loan at 3.25%....NBOKC covered the funding me and a bunch of other odds and end fees...I only paid $869 out of pocket.

Customer support was outstanding!!! Paperwork was done right and on time. My realtor has dealt with banks from BOA and USAA to the local credit unions and both she and the title company people said dealing with NBOKC was an absolute pleasure....in fact, my realtor said she was actually going to start referring her new clients to NBOKC.

Cheers,

Cap-10

[HossHarris]

I plan to use them in about a month. Glad to hear all the glowing reviews!

[bronxbomber252]

Just got my pre-approval with Amy Paterson. Very helpful, took 20mins on the phone, no issues whatsoever, she was very pleasant! This will be my first house, I'm an O-2 with good credit but not a lot of credit, 3.25%! can't complain at all! Thank you all for turning me on to this bank!

[Dupe]

I'm in the middle of closing with NBOKC. 3.25 % with $3K lender credit. I bring nothing to the table, and my payments drop by $250/mo. There's never a free lunch: I had 26 years remaining on my original note; this is now a 30 year note (though the total amount paid is substantially less).

[Jughead]

I'm in the middle of closing with NBOKC. 3.25 % with $3K lender credit. I bring nothing to the table, and my payments drop by $250/mo. There's never a free lunch: I had 26 years remaining on my original note; this is now a 30 year note (though the total amount paid is substantially less).

You can "create" the free lunch for yourself by amortizing it over 26 years and paying the difference toward principle. You make the same number of payments (26 years) at a lower rate (I'm assuming 3.25% is better than what you had), thus getting done sooner, less total outlay (less even than the 30 year note calls for, which was already "substantially less"), and maintain the flexibility to reduce your monthly payment to the 30 year amortized amount if you're in a bind in any given month....

ETA: OBTW, if you really want to get ahead, keep paying the same payment as you've been making up to now. You'll be done well ahead of your original loan and tens of thousands of dollars ahead on total payments....

Edited March 4, 2013 by Jughead

[nsplayr]

ETA: OBTW, if you really want to get ahead, keep paying the same payment as you've been making up to now. You'll be done well ahead of your original loan and tens of thousands of dollars ahead on total payments....

Just set this up with my recent refi. We gained 4 more years on our new note vs the old one (had had our original loan for 4 years) but we'll continue to make the same monthly payment despite saving about $250 per month due to the lower rate, with the extra each month going to principle. The break-even point of being back to the same level of principle remaining, even including closing costs that got rolled in, was 7 months. It's all black after that so when we do eventually sell, we'll be well ahead on paying down the principle vs the old loan.

[Dupe]

You can "create" the free lunch for yourself by amortizing it over 26 years and paying the difference toward principle. You make the same number of payments (26 years) at a lower rate (I'm assuming 3.25% is better than what you had), thus getting done sooner, less total outlay (less even than the 30 year note calls for, which was already "substantially less"), and maintain the flexibility to reduce your monthly payment to the 30 year amortized amount if you're in a bind in any given month....

ETA: OBTW, if you really want to get ahead, keep paying the same payment as you've been making up to now. You'll be done well ahead of your original loan and tens of thousands of dollars ahead on total payments....

Good point and true statement. This house will be a rental shortly, and I'll be rolling most of the profits back into covering the principal.

[JS]

Just set this up with my recent refi. We gained 4 more years on our new note vs the old one (had had our original loan for 4 years) but we'll continue to make the same monthly payment despite saving about $250 per month due to the lower rate, with the extra each month going to principle. The break-even point of being back to the same level of principle remaining, even including closing costs that got rolled in, was 7 months. It's all black after that so when we do eventually sell, we'll be well ahead on paying down the principle vs the old loan.

Really, when you refinance, your choices are pretty much the 15 or 30 year loan (ARM or fixed), so unless your loan has 15 or 30 years remaining, you are either going to extend your loan terms or shorten it by paying more per month with the 15 year loan. Either way, you should have chipped down your principal at least a tad by paying it over the past four years, so even though your new loan was back to 30 years, it should have been a slightly lower monthly payment even before taking the lower rate into account.

Good on you for paying more principal up front. A word of caution - a lot of people don't really understand how this process works - especially about paying extra into principal each month. When you took out your new loan, say it was for $200K at 4% for simplicity, the bank reverse engineers the numbers assuming you are going to pay it down over 30 years, and are going to pay 4% interest on the balance yearly. In other words, you are going to pay $8K interest the first year, $7.8K interest the second year, $7.5K interest the third year - all divided by 12 months of course - or something similar to that as your overal principal decreases over the years. This math is reverse engineered assuming your principal is going down by the scheduled amount over 30 years. The "scheduled amount" gets all fucked up when you start paying extra and chipping down principal ahead of schedule. Paying down principal, of course, should favor you, but a lot of times the bank rigs the rules to favor them.

It looks like you are going to plop down an extra $3K in principal each year, but the bank is still going to charge you interest according to the original payback schedule. Usually, all they do is take off payments at the end of the loan, which greatly favors them. It just changes your pay-off date, not the yearly interest paid, which is based on the old, higher amount of principal.

In other words, say, for simplicity that you came across $100K and paid that in addition to your next payment. The numbers were originally crunched for you to pay 4% of a $200K balance the first year, 4% of a $198K balance the second year, 4% of $195K the third year, or whatever - hence my example interest numbers above of paying about $8K interest per year. If you paid the extra principal, $100K in this example, you should only be paying like $4K interest in the first year, $3.8K in the second year, $3.5K in the third year, etc. But your monthly overall payment and monthly interest payment will not change. Your loan will simply be paid off earlier, depending on how much extra you had pre-paid over the years. In other words, you are paying interest on a principal amount that is actually higher than the principal amount that you actually owe. Total robbery.

The way around it is that you have to periodically tell your bank to re-crunch the numbers, known as amortizing the numbers. I believe my bank calls it "re-characterizing" the loan, as I remember seeing that small blurb on page 69 of my stack of 150 pages of mortgage documents we went through on closing day. Most banks charge a $50 - $100 fee for the trouble of hitting the refresh button on their Excel program after typing in the new amount of principal that you actually owe. Not sure if you want to pay $100 to re-crunch your loan each year after paying it down $3K extra per year, but you will have to do it periodically if you want your extra principal payments to lower the overall amount of interest that you pay over the loan (which is the goal).

Some banks might automatically recalculate/reamoritize it for you with each additional payment, but I know a lot of banks don't.

[nsplayr]

Really, when you refinance, your choices are pretty much the 15 or 30 year loan (ARM or fixed), so unless your loan has 15 or 30 years remaining, you are either going to extend your loan terms or shorten it by paying more per month with the 15 year loan. Either way, you should have chipped down your principal at least a tad by paying it over the past four years, so even though your new loan was back to 30 years, it should have been a slightly lower monthly payment even before taking the lower rate into account.

Right, we had paid off ~$10K in principle in the first 4 years of the original loan. When I said the principle increased, it was not higher than the original amount we borrowed when we first bought the house, just higher than the amount of our payoff to the first bank due to rolling in closing costs. The break-even then for the refi is when, based on both the new rate and continuing to pay the same amount we were used to (i.e. additional to the principle), we return to the same amount of principle owed. That is only 7 months down the road. After that we benefit from both owing less principle than under our original schedule due to the extra principle payments each month as well as having a lower monthly payment so that if things change (PCS -> rental, etc.), we can in fact pay the bank less if need be.

Good on you for paying more principal up front. A word of caution - a lot of people don't really understand how this process works - especially about paying extra into principal each month.

Good advice, I didn't know it was possible to ask them to recalculate the loan or whatever they wanna call it...I'll ask them about it.

[JS]

Calculating a break-even point is the best thing you can do. Most people only look at the lower payment and then totally disregard the closing costs simply because they were rolled into the loan. As I mentioned in the other thread, closing costs are real, no-shit money flowing from your pot to someone else's without helping your equity or principal - regardless if they are rolled into the loan.

I was going to refinance about 2 years ago and got into an argument with a dude from Quicken Loans. He did the high-pressure bullshit and tried to convince me that I would save $70K in interest, or whatever. Of course, he was talking about over a 30-year period, even though I told him I estimated we would be in the house 5-10 years more. I told him the $5K closing costs were a concern, because I had to recoup that (at the time, rates were in the mid-4s and the differential between that and my old rate was not as significant, thus pushing my break-even out like 3-4 years, which was a concern if we were only going to be there for 5 years). He sent me a new estimate with negative points, which he simply told me was "no closing costs," and failed to point out that the rate was actually higher. Of course, those maneuvers with points just move the breakeven point either forward or backward, depending on how long you estimate you will be in the house. That's why I harped on the "how long will you have this loan/live in this house" in that other post - it is by far the most important thing you have to estimate when making an informed mortgage decision. But either way, you had to pay closing costs, as it is just the cost of doing business.

But good on you for at least thinking about a breakeven point instead of just blindly jumping into a new loan based on the sales pitch of saving XXX dollars per month, making it a "no-brainer," in the exact words of the high-pressure salesman from Quicken who got us into this mortgage mess in the first place.

In looking through my documents, I stand corrected. The reamortiziation thing was not in my 80 pages of closing documents, it is on their online "fee schedule." They charge a flat $100 "Recast" fee. Here is an article describing it:

https://qna.mortgagen...cast-a-mortgage

In reading that article it might not be exactly what I was talking about previously because it talks about making your loan spread out over 30 years again - sort of like refinancing without refinancing. But either way, you want to make sure if you are paying extra principal each month/year that they are taking that into account when calculating your monthly interest.

This website is pretty good for visualizing what is going on:

https://www.bankrate....calculator.aspx

Type in the terms on top, then click on the bottom blue button "show/recalculate amortization table." You can visually see what is going on, and then you can add your $250 per month and recalculate it. On a $200K loan at 4%, the extra $250 actually pays the loan off 10 years early.

BUT - as I have argued in other threads. I would take the extra $250 per month you are paying on the mortgage and invest it. That mortgage is probably only costing you 3%, plus you get a tax deduction on that interest, pusing the cost of that money down to like 2.5% or 2.75%. Most financial experts (with that idiot Ramsey as the sole exception) would tell you to invest the $250 elsewhere, because you will likely earn more than the 2.5% or 2.75% that money is costing you.

The other thing you have to balance is the "feel good" affect of paying down the mortgage (Dave Ramsey's way of talking people into losing long-term wealth) and the risk balance of having money essentially safely "invested" in the walls. floor, and ceiling of your house versus having it sit in an investment or retirement account. There are risks with putting it into the house - lower housing prices and the lack of liquidity if you need that money. Me, personally, I pay the minimum required amount on my mortgage and keep feeding the difference between my old and new mortgage into my Schwab investment account buying relatively safe ETFs and other funds. I am pretty sure I can beat 2.5%.

Edited March 4, 2013 by JS

[Duck]

So..... it looks like I won't be able to sell my home and instead will end up renting it for enough to cover my mortgage and the management fees plus a little extra left over. This is a VA loan (refinanced through NBoKC). Have any of you had success in getting another mortgage for a second home in another city (Around a 750ish credit score)? Any advice? Thanks guys.

[tunes]

Just did a 2nd refinance with Dave Devine going from 3.75 to 3.375. We added 6 months of payments getting a new 30 yr loan but our monthly payment went down almost $100 a month and it only added about $900 to our principle. We were overpaying our payment with the 3.75 and will continue to make the same payments. Very happy with the experience again. We went from setting up the refinance to closing in a week. If I buy a house at my next assignment we will be going through Dave again.

So..... it looks like I won't be able to sell my home and instead will end up renting it for enough to cover my mortgage and the management fees plus a little extra left over. This is a VA loan (refinanced through NBoKC). Have any of you had success in getting another mortgage for a second home in another city (Around a 750ish credit score)? Any advice? Thanks guys.

going through the same thing right now......from what I gathered from talking to Dave we couldn't do another VA because we only had 170k of VA money left but he said we could do a conventional with 5% down and no PMI so we are looking into going that route

[itsokimapilot]

So..... it looks like I won't be able to sell my home and instead will end up renting it for enough to cover my mortgage and the management fees plus a little extra left over. This is a VA loan (refinanced through NBoKC). Have any of you had success in getting another mortgage for a second home in another city (Around a 750ish credit score)? Any advice? Thanks guys.

If you get renters to sign a one year lease, you can include the rent as income with most banks. So, if your mortgage is $1200, and you charge $1500 rent you should be able to negotiate a good rate with most banks for an additional loan.

[HU&W]

So..... it looks like I won't be able to sell my home and instead will end up renting it for enough to cover my mortgage and the management fees plus a little extra left over. This is a VA loan (refinanced through NBoKC). Have any of you had success in getting another mortgage for a second home in another city (Around a 750ish credit score)? Any advice? Thanks guys.

Yes. I just did what you're doing. First home was VA loan, and I'm now renting it out. Second house was also VA, but I greatly minimized closing costs by putting around 5% down. Painless to get the second mortgage.

[nsplayr]

JS,

Good discussion on all points.

BUT - as I have argued in other threads. I would take the extra $250 per month you are paying on the mortgage and invest it. That mortgage is probably only costing you 3%, plus you get a tax deduction on that interest, pusing the cost of that money down to like 2.5% or 2.75%. Most financial experts (with that idiot Ramsey as the sole exception) would tell you to invest the $250 elsewhere, because you will likely earn more than the 2.5% or 2.75% that money is costing you.

I would agree although in my situation in particular I'm putting it toward extra principle on the house in an effort to erase negative equity. Even buying in 2009 the market continued to go down and although there's been some nice recovery lately we're still slightly underwater. What I'm trying to do is accelerate my principle paydown schedule so that, in my assessment of my life situation, the market can continue to rise, my principle can continue to fall faster than before, and they can at least meet in the middle before I get PCS orders and/or decide to sell the house otherwise.

If I had positive equity and could sell the house today and break even or even make money I probably would invest that extra principal payment money and likely will if the market recovery and/or my own extra payments put me in a place where I could punch out from this house and not lose money in the process. The way I figure it the weakest link in my financial situation is being underwater in the house so I think it's justified to put extra money toward rectifying that even if I could do slightly better by investing that money elsewhere. This is especially since (hypothetically) having sell the house at a loss would be a significant problem in the short- to medium-term whereas the gains from investing rather than paying down principal is more of a long-term benefit.

[JS]

JS,

Good discussion on all points.

I would agree although in my situation in particular I'm putting it toward extra principle on the house in an effort to erase negative equity.

Oh, yes, having negative equity can be bad. I assume you have a VA loan, like the title of this thread, or you are paying PMI, which I was set up to do before I put down an extra $15K or so from my savings like I detailed in another post. PMI, or the inherent higher rates from an FHA is really pissing away money without adding to your long or short term wealth in the form of equity or whatever. Dave Ramsey would be proud. That's probably the best thing about the VA loan - you are pretty much going to get the same rates and terms whether or not you have 20% equity, correct??? Or is there a penalty/higher rate of some sort if you don't have any equity?

Either way, we got a good deal with a non-VA loan after weighing all the options and just plopping down the extra $15K in order to get us right at the 80% LTV, thus avoiding pissing away the PMI money. I chose that instead of paying the crappy "funding fee" I would have had to pay for a first VA loan.

[Jughead]

Some banks might automatically recalculate/reamoritize it for you with each additional payment, but I know a lot of banks don't.

I have been under the impression that what you're saying is illegal. I'm not certain of that--you may well have seen examples where the interest is charged on the forecast vs actual amount of principal remaining--but no loan I've ever seen has had it. I assume that would be a form of pre-payment penalty, which are no-gos in many states, as well as any loan that Fannie or Freddie Mac are involved with (which most larger lenders follow, since they want to sell, not service, your loan).

Are you perhaps thinking of the payment staying the same? That's absolutely typical--without a recast, your required monthly payment will stay the same throughout the life of the loan. However, that payment will represent more & more principal as you go along, ultimately representing quicker payoff and less overall interest paid. You could make *one* extra payment now, then continue to make your normal payments per your loan agreement, and shave six months to a year off of a typical loan....

[Duck]

Thanks guys! Exactly what I was looking for.

[RASH]

Quick question for everyone who has used NBOKC for their mortgage--once closed, do they turn around and sell your mortgage to another bank or keep it? I've refi'd twice with another bank in the KC area, and each time they've worked a great rate but then sold the loan to Wells Fargo within a month.

[Jughead]

Quick question for everyone who has used NBOKC for their mortgage--once closed, do they turn around and sell your mortgage to another bank or keep it?

They used to sell all (100%) of their loans. They recently (w/in last year or so?) have begun servicing some & selling the remainder. Unknown what percentage (that will be disclosed on your loan docs) or what formula determines "keep" vs "sell" (which I assume is proprietary). Pretty standard.

[tunes]

Quick question for everyone who has used NBOKC for their mortgage--once closed, do they turn around and sell your mortgage to another bank or keep it? I've refi'd twice with another bank in the KC area, and each time they've worked a great rate but then sold the loan to Wells Fargo within a month.

Mine went right back to wells Fargo