Chase’s Streamlined Refi/Mortgage Rate Reduction Program for ‘good’ customers

I just ran into this program recently and thought I would discuss what I know about it so far.

Consumers with Chase mortgages have started receiving Fedex packages on their door offering them the ability to refinance their existing mortgage into a lower rate and payment, with no closing costs. Obviously, you think there is a catch to the offer, as I too would, but after investigation, you find that it’s not. Let’s take a look at the "Chase Rate Reduction Program" as it is called.

Chase is offering in effect, a no closing cost mortgage for customers that have equity in their houses, and have been making payments with no late payments; don’t know how far back their history goes, but if it’s been a while since you had a late payment, it may be worth looking into. This is a screaming deal because the offer comes to you and you don’t have to go hassling with mortgage brokers and banks looking for the best deal, unless your adventurous and like hunting for the deal.

So this is how it works, you receive a Fedex package in the mail from Chase with a number to call and reservation number. You call the phone number and bam, your moving along. Chase is doing this from what I see, you have a week to respond. The process seems pretty painless too because they are looking for a 1 page authorization form and proof of your homeowners insurance and BAM! New mortgage with a lower payment!

Once you fax in your forms, you’ll receive a Good Faith Estimate, or a GFE, with everything outlined and instead of having to send anything back to Chase, you get a call to schedule your closing and hello new mortgage with no costs! This sounds like a KILLER deal right now, but I’m with Wells Fargo right now.

If you haven’t received the package yet, don’t fret. People are reporting they called asking about the program and one person stated that Chase called back with a ‘new offer’ that did decrease his interest rate and his payments! The phone number to call is 866-818-7033. Another number that may be associated with this program is 800-550-7485.

Now if I was a Chase customer that fit this profile, I would get on it, but I’m not, but I would like to share the word with people and get the word out about this program. Does Chase have the best deal out there? Maybe they do, and maybe they don’t. There could be deals out there that is better than Chase’s, BUT, Chase’s deal is pretty simple and painless. Who wants to dig out their pay stubs and tax forms and hope the appraisal comes up with a value that will allow you to refinance?

From my analysis, the interest rate that you are offered is based on what the rate is when they mail out the letter to you. I don’t know if you can haggle on the rate, but, I would like to know if it’s possible or not.

Another plus on the deal is that if you do an autopay for your mortgage, they will give you 1% cash back. I’m unclear if they give that money to you or if they apply it to the mortgage. It’s definitely not very much money, but it’s a little extra. I also am unsure if you have to autopay from a Chase deposit account or if you can autopay from any account.

Now to the why they are making this offer to existing customers, well, a couple possible reasons the way I see it.

First, this is the part where they can show to the government how they are helping the homeowner, and this is benefiting those of us who are still making payments diligently and doing our part for society.

Second, they don’t want all of these high quality loans to get refinanced with other banks and then they lose out on their ‘A’ mortgage paper and this is a way for them to keep your mortgage on their books.

THIRD, I’m smoking a crack pipe and somebody thought they would do of their customers.

Now some things that will disqualify you from this program/offer from Chase.

- It cannot be an investment property.

- You probably can’t have any late payments, or at least not in the recent past (I don’t know how far back they may go.)

- You need to have equity in your house, probably a good portion of equity too.

- You can’t have another loan on your house like a Home Equity Loan or a Home Equity Line of Credit; HEL or HELOC. This may be OK if the loan is with Chase, but if the second loan is with another bank, the answer is no.

Regardless, this is an AWESOME deal; first because of the ‘no closing cost’ refinance characteristics and because it’s simple and easy, remember, authorization form and proof of homeowners insurance.

Now that I’ve talked it up, let me bring some downers to the table otherwise it wouldn’t be fair now would it.

First, your going to reamortize or redo the loan for the new length of the mortgage. The negative is you could potentially pay more in interest for the lower rate. The fix to that is to continue making the old payments and pay off the loan sooner. If your monthly payment savings are substantial, you could potentially pay off your loan much sooner than if your payments were lower.

Second, if the mortgage you are refinancing is a purchase mortgage, or you used the loan to purchase the house, your mortgage now becomes a recourse loan. Some states, California is the only one that comes to mind right now, do not allow the lender to come after you for any difference between the auction price of your house if you are foreclosed and the amount you owe. If however, you refinance the loan, it now becomes a recourse loan and the lender, in this case Chase, can come after you for the difference between what they auctioned the house for and what you owed.

In simple terms, if you owe $100,000 on your loan, and they auction your house for $75,000, the lender can then come after you for the $25,000 difference.

The Chase Rate Reduction Program has the following conditions:

* you are employed and/or have a steady source of income along with sufficient assets to close on your new loan
* you do not currently have a second lien mortgage held by a company other than Chase (other options are available if you have a second lien mortgage at another financial institution - call us for details)
* you have no bankruptcy, foreclosure, judgments or liens
* borrowers on the new loan should remain the same as the original loan (some changes in borrowers are allowed with the new mortgage, call if you have questions)
* your property is a detached single-family residence (other options are available for co-ops and condos - call us for details)
* your property is not held in trust
* you current mortgage loan does not have mortgage insurance
* there is a net benefit to you such as reduced principal and interest payment, a lower rate, or converting to a more stable product (such as moving from an adjustable rate to a fixed rate)
* you will sign the required closing documents

Folks with Chase mortgages, there you have it. I’m fairly certain this is applicable Nationwide so go forth and take advantage of a good deal if you can.

I’d like to hear back from you if you’ve gone through the program and hear about your experiences. Just add comments below.

No Closing Cost Mortgages from Provident Funding

Folks, while Provident Funding does not offer a no closing cost mortgage per se, they present you a rate sheet of the rates and allow you to pick, in effect, the amount of closing costs you want to pay, regardless if it’s $0, or the whole kit and caboodle.

A little about Provident Funding, they are a lending institution out of Burlingame, California; and are also know as Provident Funding L.P. They loan in what appears to be the contiguous 48 states which excludes Alaska and Hawaii. They loan direct to you and me, the consumer, but they also loan through mortgage brokers as well through their mortgage wholesale section. While I am no mortgage ‘insider’, they claim on their website that they are the 10th largest wholesale lender in the US and service over $25 billion in loans.

You can go to their website and see what kind of mortgage interest rate you qualify for by running your numbers through their ‘Advanced Calculator’ option on their website to see what kind of rates you may qualify for. You will get a wide range of rates with the rates on the top being the lowest rates you can get by paying closing costs or buying points. As I write this, the lowest rate for my state is 4.25%, but that will cost you regular closing costs AND 3.125% in points. You could go all the way up to 5.5% for your mortgage rate and get a no closing cost mortgage, which is labeled as ‘No NRCC.’

What does ‘No NRCC’ mean? Well, it means that for that interest rate, there are ‘No Non-Recurring Closing Costs’ associated with that interest rate. Or, what I like to refer as a no closing cost mortgage. Now, if you are paying real estate taxes or insurance, that is not considered NRCC because you will always those costs year in and year out.

Funding fees however, title fees, mailing costs, lawyer fees, whatever however, that you only pay in the course of getting your mortgage is covered under the ‘No NRCC’ option which is what this website is about. We want no closing cost mortgages because they allow the most flexibility to us as the consumer.

I’ll restate it like I have in the past, BUT, if you are moving into your forever house, then you may look into paying closing cost and even potentially purchasing points to get that lower interest rate, but if you are like most Americans, you won’t be living in your forever house and will move in short order, so it would be best to get a no closing cost mortgage if it is less than three years as I pointed out in a previous post with the analysis.

If you decide to go with the ‘No NRCC’ option however, you do also have the option of taking a bit lower rate for just a tad bit in closing costs. For instance, looking at my situation, if I wanted to pay no closing costs, I would be looking at a interest rate of 5.5%. If however, I paid $145.40 in closing costs, I could get the one lower interest rate of 5.375%. Heck, looks to me like I could potentially get 5.25% for only $290.81. Sounds like I need to give Provident a call and look at refinancing my mortgage again from when I refinanced with Wells Fargo back in April. While I will admit that will re-amortize my mortgage, it will save me about $22 a month, or $264 a year. Not a large sum of money I will admit, BUT, that is money in my pocket today which is what I am after, cash flow today. If however, you want to pay off your mortgage as quickly as possible, then you may want to pay it off quicker, or with larger payments. BUT, you could refinance, apply the payment savings to your mortgage, AND add in the payments you were making.

Let me illustrate, and I’m using round numbers again because that’s how I operate, my brain is simple although randomly it will do semi-complex numbers, but we’re keeping it easy today.

If my mortgage is $1,000 a month right now. If I refinanced, I could potentially save $150 a month at a lower interest rate, but make payments for 30 years from the day my mortgage closed again. Well, I could keep making payments of $1,000 and pay my mortgage off that much quicker, less than 30 years because I’m making more than the required payment. And you’ll pay less in interest over the life of your mortgage.

Provident Funding charges a $1,099 funding/commitment fee to do a loan for you. This fee is flat and does not adjust like it would if they charged a 1% fee like many mortgage brokers do. If we divided the $1099 fee by 1%, we get $109,900. If your mortgage is $109,900 or less, the fee would be the equivalent of paying a 1% funding fee. If however, your mortgage is larger than $109,900, that is when you start saving money over going with a traditional mortgage broker that charges a 1% funding fee. If your mortgage amount is $200,000, Provident Funding Mortgage will still only charge you $1,099. If you go with a mortgage broker however that charges you 1%, then you’ll pay $2,000. You can see that you’ll pay $901 more to a broker over directly going with Provident Funding.

Why am I talking about Provident Funding though and what do I know about them? Before I refinanced my mortgage with Wells Fargo, I had refinanced prior to that with Provident Funding with a conventional 30 year mortgage. It has been some time, so the statements I am about to make are from my memory which may or may not be accurate.

They were easy to deal with and my mortgage refinance went relatively painlessly except for the issue in which I asked to close with one group and they tried to close with a notary. While I would probably go that route NOW, I didn’t then and my mortgage closing had to be rescheduled until the people I wanted to close with could get the documents and close.

Otherwise, the application process, lock process, everything was pretty painless. My processor was responsive and was pleasant to deal with. I unfortunately don’t know if she still works for Provident Funding, but she was all right to deal with. Another thing that I enjoyed about Provident is the fact that in the five years they held my mortgage, then NEVER sold my mortgage. I always made my payments to them the loan was never sold.

Because of this reason however, Provident may be a little bit more conservative in their lending criteria, so unless you have awesome credit and a stable income, they may or may not be the lender to go to.

If I remember correctly, from application to closing took me about two months which isn’t out of the ordinary, I believe it’s about average as far as mortgage refinancing goes.

While visiting their website, they are associated with a bank now out of Colorado and are offering a high yield savings account currently running 1.7%. For a savings account with no minimums, that is a respectable rate. Even Ally bank where you see those funny commercials on TV about the restrictions and no fees, is running a lower interest rate than Colorado Federal Savings Bank.

Enough about Provident, post your experiences with them if you have them or are looking at using them. I’d be interested to hear what you have to say about them and see if they are still right for me to refinance with. I will of course be calling them to inquire further on the rates.

Speaking of rates though, they have gone down a bit recently and if you have a no closing cost mortgage, you may be looking to refinance again to lower your mortgage amount.

Update to Wells Fargo's No Closing Cost Mortgage

Folks, I called Wells Fargo tonight because mortgage interest rates have fallen again and just wanted to see what the rate on the no closing cost option was, because after all, I can seeing as how I have no skin in the game in regards to closing costs, and I was told that Wells Fargo did away with their no closing cost mortgage program, the internal program they used to offer.

The only available option left for a no closing cost mortgage through Wells Fargo is the "Home Affordable Refinance" program that was instituted to help out underwater home owners. This program appears to be tied to the federal government and is one of the many programs they have going trying to help out home owners. This does not appear to be a mortgage modification program, but instead a straight up refinance program, but you don't have to pay any closing costs for this program. To determine if you qualify for this program, visit the eligibility questionnaire to see if you qualify.

While I am disappointed that this program is no longer available via Wells Fargo, there are other lenders out there that offer similar programs, like the option offered from Fremont Bank and other banking institutions. My goal with this website is to find those lending institutions and highlight the program highlights so that people can easily find lenders that offer these programs. If you know of a program, let me know so we can spread the word.

UPDATE: After further 'investigation' on my part, it appears that the program is still alive and well. They have just tightened the requirements to qualify for this program. You just need to call them and find out what those requirements are and see if you qualify.

Is a no closing cost mortgage right for you?

In short, a no closing cost mortgage depends on your situation. It depends on a number of factors which I will discuss in this article.

Currently, due to the economic situation that we find ourselves in, a no closing cost mortgage option is tough to find and rare depending on the lender that you choose, because of that, you will have probably have to ask a number of different lenders on options they may be able to provide you.

First off, let's define a no closing cost mortgage. This is when you either purchase or refinance an existing mortgage, and all you have to bring to the closing table is yourself and some identification, the closing person will more than likely give you a pen to use. You don't write a check to the closing company, you don't give cash, nothing. This is also applicable to a no closing cost mortgage refinance.

What a no closing cost mortgage is not is where you have to pay for your closing costs, OR, your mortgage amount goes up because your closing costs are rolled into your mortgage. What I mean by that is if you have are taking out a $100,000 mortgage, your balance will still be $100,000 once the closing takes place, plus the interest for the month if you are skipping a mortgage payment.

Why am I taking the time to ensure that I define a no closing cost mortgage? Because, unfortunately, too many people, to include lenders and brokers, think that when you ask for a no closing cost mortgage, you are asking to roll your closing costs into your loan amount. This is not what I discuss on this blog. Why? Because when you do that, you are going to pay interest on the closing cost for the length of your loan. If your mortgage term is 30 years, you will then pay approximately three times the principal amount in interest therefore, potentially negating any interest savings. Granted, there are other factors to look at, for instance inflation, BUT, that is not what a no closing cost mortgage is.

If you plan on staying in your house for a good long time however, then you would actually want to pay closing costs to take advantage of the lower interest rate for a longer period of time. If however, you are like most Americans, you will probably move in short order, approximately every six years, and sell your house and buy another house. In this case, you don't want to pay closing costs because it does not make sense. Not to mention the fact that if you do sell your house, your savings will be dimished and you will probably spend more money that you would have if you had refinanced with a no closing cost mortgage. What this also allows you to do is to refinance at will if interest rates drop as they have been doing lately.

For instance, let's look at a couple of scenarios based on today's interest rates.

If you take out a 5% mortgage and pay customary closing costs, your closing costs will be approximately 2% of the loan amount depending on where you live. Based on a $200,000 mortgage, you are looking at the following numbers:

Year	1	2	3	4	5
Closing Costs	$4,000	$4,000	$4,000	$4,000	$4,000
Payment	$1,073.64	$1,073.64	$1,073.64	$1,073.64	$1,073.64
Total Interest Paid	$9,932.99	$19,715.01	$29,338.35	$38,794.87	$48,076.06
Total Cost	$13,932.99	$23,715.01	$33,338.35	$42,794.87	$52,076.06

If however, you don't move, or if you take a mortgage with no closing costs, the interest rate averages approximately 0.5% more than if you were paying closing costs. Based on a 5.5% interest rate, your costs will break down as follows:

Year	1	2	3	4	5
Closing Costs	$0	$0	$0	$0	$0
Payment	$1,135.58	$1,135.58	$1,135.58	$1,135.58	$1,135.58
Total Interest Paid	$10,932.76	$21,713.54	$32,333.78	$42,784.42	$53,055.89
Total Cost	$10,932.76	$21,713.54	$32,333.78	$42,784.42	$53,055.89

Using our skills of deduction, we can see that the no closing cost option wins out until sometime during year five as the interest paid column is your total cost paid at the end of that particular year.

Seeing how we Americans move every six years, it’s a toss up in regards to taking a no closing cost mortgage option or paying closing costs. During year six, paying closing costs overtakes the no closing cost option by approximately $2,000, not a figure to sneeze at in my opinion. You do also however have to take into account how that $2,000 is worth less due to inflation and how you could potentially invest that $2,000 and make it worth much more by not paying closing cost. If you are disciplined with your money, I would argue that it would make sense to take the no closing cost option if you plan on living in the house for six years or less. If however, you will be moving in six years or less, then a no closing cost option would be the best method to finance your mortgage. This of course does not take into account a serial refinancer every time the interest rates drop and you are able to take advantage of the new lower interest rate.

Something to take note of also is the fact that as your loan matures, i.e. you’ve been making monthly payments on it for some, your loan principal will decrease. Once you get too far into the loan, your total interest expense, i.e. the amount of interest you will have paid on your mortgage will be more than if you had kept the original mortgage in place. If you are however unphased by that, because it can be in the thousands of dollars, then go with the no closing cost mortgage option. For me, I will refinance because it helps with the cash flow and doesn’t cost me anything other than some time to sign the closing documents.

The biggest determinant to decide on whether to go with a no closing cost mortgage option versus paying closing costs is to look at how likely you are to be in your house for six years or longer. Once that is figured out, you should then be able to figure out if the no cost mortgage is the best way to go.

Bank of America No Closing Cost Mortgages

Bank of America is a VERY large bank that offers loans, deposit accounts like savings, checking, money market accounts, personal services, mortgage products for instance like a Bank of America Home Equity loan or a Bank of American mortgage refinance; you name a service that a bank could potentially offer, and Bank of America probably offers it. Bank of America is also usually known as BofA or BOA, using the initials from it's name, Bank of America.

The service that I'll be discussing of course are no closing cost mortgages offered by BofA and how to potentially go about getting one from BofA.

Bank of America purchased Countrywide Financial last year, in 2008, and became the largest lender as well as servicer of mortgages in one well swoop. By becoming the largest lender in the nation, the potential for BofA to offer great rates is there, their website however in my opinion does not allow for rates. Per their website, I could not find a no closing cost mortgage rate offering from BofA, no closing costs in the sense that I've been discussing in previous articles and like Wells Fargo does. Between two large, and now one lender, neither of them has a no closing cost mortgage available, at least on their website as an option.

I have called in the past to a Bank of America bank branch and asked a local mortgage representative and they made me believe that you could get a higher interest rate to get a no closing cost mortgage. Now, your rate will probably go way higher than it should because of the fees and costs associated with acquiring a BoA mortgage. Not to mention the fact that in my opinion, BofA mortgage rates are not the most competitive to begin with. While they don't appear to be too excessive, the higher fees with the higher, par, or starting interest rate on their mortgages make the proposition too expensive. Again, you may find a good deal with Bank of America because I know they do have them on occasion, but in regards to a BofA no closing cost mortgage, they don't have them.

Countrywide, who was acquired by Bank of America, did have a mortgage program that was a play on words and was promoted as a way of refinancing your mortgage with no closing costs. The details revealed however that you were still charged closing costs, but those costs get rolled into your mortgage. That was of course in the past, but I believe you still can do the same thing with Bank of America. In effect, what happens is if your mortgage was for $100,000, you would actually get a loan for $103,000, with the $3,000 going towards your closing costs. What that does though is require you to pay for your closing costs over 30 years or however long your mortgage is for. I don't know if this program is still available or not with any certainty, BUT, this program was usually only available on BofA mortgage refinance loans. I can't comment if it is or was available on purchases, but I wouldn't think so because then that would take your loan to value amount beyond 100% unless you put money down when you purchased your house. If you put money down on your house purchase though, you could always divert money to your closing cost instead of lowering the amount of your mortgage. I however think that this is not a good way getting your mortgage.

I can see some smart people reading this and saying, but if you take a no closing cost mortgage, your going to take a higher rate anyways and pay for your mortgage closing costs anyways. I say, very true! HOWEVER, with no money out of your pocket for that no closing cost mortgage, how long do you have to wait until you find another better deal before fretting about how much you all ready put towards your closing costs? How long does it require you to figure out your payback period? How long before you ACTUALLY start saving money on your mortgage.

As soon as I close on a no closing cost mortgage, I already know my payback period and I don't have to horse around with trying to figure out my payback period. I'll let you in on the secret, my payback period is 0! That's right, because no money came out of my pocket, then I don't have to try and figure out how many months to divide into zero because I had zero closing costs. Now what's the argument?

I'm sure that the next thing your thinking is, yeah, but then you'll pay for that higher rate for a longer period of time, potentially even, up to 30 years. That's true. But the average American moves approximately every 7 years. Not a concern really, UNLESS you plan on living in that house for the rest of your life or, 30 years, then heck yeah, get that mortgage with a point or two and take that lower payment and pocket or save the rest. That's where paying points and closing costs make sense, if you intend to stay in your house for a long period of time. Otherwise, stick with minimal closing costs to save cash in your pocket for other items.

One of the reasons why no closing cost mortgages are also drying is because of the Yield Spread Premium, or YSP, is getting smaller. One way of looking at the YSP is like a commission that a lender will give a broker, in essence, for getting a consumer, that's you, to take a mortgage at a given rate. So for instance, in today's market, you may be able to get a 30 year mortgage at a fair 5.5% interest rate. Well, if the mortgage broker can get you take a higher rate, then the Yield Spread Premium is then paid to the broker as a commission. In reverse though, if the broker is playing honest, then you can pay for a lower rate. You can also see how much the YSP is by checking your HUD-1 statement that you receive at closing. Many places don't want you to pay attention to it so they will skip over it, but it will be disclosed to you at closing, just not as explicitly as I think they should, this is what the broker is going to make when you take the mortgage loan.

The YSP however is what allowed brokers to offer no closing cost mortgages. They would share the commission with the borrower and get lower closing costs for the borrower. The reason why the no closing cost mortgages are drying up is because lenders are no longer offering the fat 'commissions' that they used too because the market has changed.

That's all I'm going to say about the Yield Spread Premium at this time. I'll write another article discussing the YSP.

In the end however, I'm fairly certain that at this point in time, Bank of America, or BofA, does not have a true no closing cost mortgage. This does not mean you cannot get one of their brokers to setup one for you, it just means you may have to speak to a couple different brokers before you get it. Make sure you don't fall into the trap of financing your closing costs into your mortgage because that's a lot of interest you'll be paying for that privilege. And only get a no closing cost mortgage from Bank of America if you don't intend on living in the house for a very long period of time; because sometimes, it does make sense to pay closing costs on your mortgage financing, regardless of the lender. Just make sure the rate is competitive, unlike what BofA advertises for their mortgage rates on their website.

My Wells Fargo No Closing Cost Mortgage Refinance

I know it's been a while since I last posted, but I just wanted to say that my mortgage with Wells Fargo and their no closing cost mortgage went uneventfully. I do have some comments to share about them that I thought was frustrating.

I applied sometime at the end of March I believe. The process was relatively painless except for the fact that I felt like there was NO outreach from WF and my refi. I had to keep calling Wells Fargo's call center to find out what they needed, what I needed to do, anything to keep my process rolling. I did not even speak to my loan processor one time. This is definately NOT for the consume who needs their hands held to complete the refinance process.

In the end however, I randomly received a package from WF with my closing documents in it. There was two packets in the package that I received. Both of them were the same thing, but one had a note that the package was for my records, and the other packet was the one to be signed and then sent back to Wells Fargo for them to process. Although I was expecting a package, it was definately not like, it's supposed to be here on such and such date, it just appeared via UPS, not to be confused with USPS.

I had to take the package that needed to be signed to a notary, then sent back in the prepaid return package and then dropped off for UPS to send back to Wells Fargo. I didn't want to pay any notary fees, because I'm a frugal individual, and ended up calling one of the Wells Fargo branches here in town. At first, I would need an account to get the notary service for free. Fine, I'll slap $25 in an account to ge the service for free. Then I found out that if the documents are Wells Fargo documents, they would do it for free! Yeah, that's what I'm talking about! I drove my happy butt to the branch and signed and was out the door in about 20 minutes.

I placed the package in the envelope and dropped it off at an UPS drop site and was done. I again, didn't know how long the payoff would take, but I checked yesterday and the payoff has apparently cleared my old mortgage lender because the balance is $0.

I now am waiting for refunds from my old lender for my escrow balance and any overpayment that may have occurred to account for interest expenses that were missed. I am also awaiting for an account statement so that I can setup online access via Wells Fargo's website and then I'll be happy.

In the end though, I was expecting a little more hand holding than occurred only because mortgages are large transactions and every where else you get a mortgage, the people your working with want to get the transaction completed. If I was told I would be on my own more so, my expectations could have been set so that I wasn't caught off guard.

Now this transaction was good for me because my payment dropped almost $150 per month. Now that is a bit of a myth, but let me explain. I was paying $75.xx a month for PMI with my old lender, so there's half the savings. The other half came from a slightly lower interest rate, 5.875% down to 5.5%, and the reamortization of my mortgage back out to 30 years.

See, once you get into years 3-5, more and more of your mortgage payment starts getting applied to principal instead of the interest. Approximately $150 per month was getting applied to my mortgage principal. With the new mortgage though, I'll probably be somewhere in the high $100's again. Oh well, that's just the way things roll.

I only did it because I wanted to increase my cashflow. If I want in the future, I can always pay more money to principal and get the loan paid off quicker. Right now though, it's all about the cash flow! With the economy the way it is, a smaller mortgage is easier than a large payment. The other benefit now is my taxes and insurance is no longer escrowed. I can now put that month amount into my OWN savings account and collect the interest for myself.

In the end, I got what I wanted which was a no closing cost mortgage with a lower interest rate and a lower payment amount by about $150.00. If your looking for cashflow, I would highly suggest you look at Wells Fargo's no closing cost mortgage because it is pretty painless after all and requires NO money for your closing cost. Your loan balance doesn't even get increased. You do however have a higher interest rate to pay for that benefit, but if you don't know how long you'll be in your house, in a falling interest rate environment, and a house you will not own for a long time, a no closing cost mortgage is the best way to go. If however, rates are pretty stable or they are going up, and you will be staying in your house for a while, then pay points and closing costs will be the way to go.

In the end, my Wells Fargo no closing cost mortgage went well and I do encourage others to go with the program if it fits your needs and you do it for the right reasons that I mentioned above.

How does a mortgage refinance work?

If you’ve decided that you want to refinance your mortgage, for whatever reason, some examples of reasons to refinance are annotated over at Boston mortgage refinance, but you can refinance with a no closing cost mortgage by taking a higher interest rate. Like I’ve mentioned in prior posts, if you don’t believe you will be in your house for longer than a few years, a no closing cost mortgage is the way to go so that your not sitting on large closing costs that you incurred by refinancing.

So how does a mortgage refinance work? I’ll try to explain it in a way that is easily understandable and you can use this information while you refinance your mortgage. Be mindful that different states and localities have different ways of doing business, so if you live in Philadelphia, you may want to check up on important Philadelphia refinance information.

In the beginning, you found a house you wanted to purchase and used a purchase mortgage to acquire said house. You went with a broker or lender and filled out the paperwork and everything worked out well and now you ‘own’ your house, or are making payments towards owning your house. Since you purchased your house the mortgage rate has gone down or because of reasons listed above, you have decided that you want to refinance your mortgage to a lower rate.

You should research different lenders and speak to a couple of mortgage brokers to get a handle on the fees they charge to give you a loan. When it comes to fees, there are lender fees, and then there are third party fees. Lender fees are the fees that the lender charges you to give you a loan. They do of course have employees that they have to pay and overhead that they have to pay for as well. The third party fees are the fees charged by people or companies to do work on your loan, for instance the appraiser or title company. Lender fees are controllable by the lender and you can work on those fees with the lender. Third party fees however are not controlled by the lender and they can’t do anything about those fees.

Once you have decided to apply for a mortgage, by law, you are supposed to receive a GFE, or good faith estimate, from the lender outlining all of the different costs or fees that they are guessing will be incurred to give you a loan. Now, I say three days and it is required by law, however, many brokers don’t usually take the time to give you a good faith estimate for whatever reason. This could also potentially be a reason of concern because in my opinion, it could be reflection of the quality of institution or person you are dealing with.

Once you receive that GFE, or get off the phone with the broker and or lender, they will request some documentation from you. The usual documentation requested is your paystubs for the last two months, your W-2 from the last year to see if you earned what you said you earned the year prior, and IRS form which allows the IRS to share your tax information with the lender, and a couple other forms for you to fill out. They may also want all or a few of your checking and or savings account statements to see if you have any money in the bank. They also will need to know who your current mortgage lender is so that they can request a loan payoff and ensure that the amount you are asking for is in line with what you owe unless you are wanting cash out of your house. Now this is not an all encompassing list of the documents they may request, but these forms are normal and you shouldn’t get worried about sharing this information with the lender.

While you are gathering your information, the bank will order an appraisal to find out how much your house is worth so that they are not giving you more money than what the house is worth. The appraiser may want to see the inside of the house, or they may just drive by the house, possibly take some pictures of the outside, and come up with a value for your house. If they want to see the inside of your house, they will make an appointment with you so that they can get into your house and see what it looks like. Coming up with a value for the house is not just what this person may or may not think it’s worth, but they use information from houses around you as far as how much have they sold for, then they make adjustments to come up with a value for your house. The easiest way to come up with a round about figure is find out how much the houses around you sold for on a per square foot basis. Then, average all those figures out, and then multiply it by how many square feet your house is and you have a figure to see about how much your house is worth.

If you have a HEL or a HELOC, the new lender will ask the old lender for what is called a subordination. What happens when your first mortgage gets paid off is then the second mortgage will jump into the first position. Well, if your new lender is supposed to be in first position, then they will ask the lender of the HEL/HELOC to subordinate, or jump back into second position once the original first mortgage is paid off. Lately however, individuals are having a hard time getting the second mortgage to subordinate. You may have to call and hassle them a little to get them moving and this could potentially hold off your closing until it is accomplished. Some HEL/HELOC lenders also may charge a fee to subordinate. Again, this will also have to paid for.

Once they receive this information, you loan documentation with the application will go to what is called an underwriter. What this person does is review all the documentation and ensure it meets all of the lenders loan requirements. If they don’t like something or feel that something is missing, you may get a request for more information or additional forms. Again, this is normal and nothing to be concerned with. Once this is all completed, the lender will order what is called title insurance. This protects the bank so that if anything comes up like there is a title problem, the property because unmarketable, the lender is protected, the lender is protected.

Once title is completed, then a closing is scheduled so that you can go and sign a bunch of mortgage documents and close on your house. Once that is completed, the forms are sent to the bank and you are almost finished. There is a federal law that protects the borrow from having buyers remorse called the three day right of rescission. Because a mortgage is such a large transaction and most likely the largest most of us will make, they allow you three days to write the lender back and say, never mind, I don’t want this loan anymore. Once those three days are over though, your new lender will send the money to your old lender who will then consider your loan paid off. Something to consider however, is because technically you have money from two banks, you will be paying interest on that money for three days on two different mortgages. That interest expense begins when you sign the paperwork, including weekends. SO, don’t sign your paperwork at the end of the week because you will be paying interest for two extra days while you wait for the weekend to finish. If you sign your closing paperwork on Monday, you pay double interest until Wednesday or three days. If you close on your mortgage on Friday however, your paying interest for five days. The other thing is also to close your mortgage as close to the end of the month as possible to limit how much prepaid interest you have to pay before the end of the month.

For instance, if you close on your mortgage on the fifth of the month, you will pay interest at the closing table from the fifth until the end of the month. If however, you close on your refinance on the 25th, you are only prepaying interest for five to six days only. If your paying your own closing costs, this could be a way to lower your closing costs.

Once this is completed, then the old lender will refund to you any escrow amounts that they may have been holding and make sure you get any money back that you were due because of overpayment or bad calculations. Most people should receive a refund on money although some may not receive any.

This is a shortened description of how a mortgage refinance works. If you are however going to be getting a no closing cost mortgage however, everything will be the same except for the closing costs portion because technically, you are not paying for any of that. The only thing that would apply in a no closing cost mortgage is your closing date. Again, try to get the date to occur early in the week so that you are not paying costs for two mortgages for longer than the prescribe three days.

I am currently still in the middle of my no closing cost refinance with Wells Fargo and will update once I’m finished. Everything however is still the same as I mentioned above and everything has been pretty painless.

VA No Closing Cost Mortgages are a bad deal!

Veteran's Administration, or VA loans for military personnel and individuals who have been honorably discharged from the military allow those individuals to purchase a house with no money out of their pocket, effectively making the mortgage loan a no closing cost mortgage. The cost is there and I'll hopefully show you why VA mortgages are not the best way to go.

When you get a conventional mortgage, most lenders will charge you a 1% origination fee on top of normal fees that are charged for a mortgage. That 1% is an additional charge on top of other customary closing costs like appraisal fee, credit report fee, processing fee, title insurance, etc, so that brokers can be paid and people can earn a living. While that in of itself is not bad, competition allows other lenders to not charge that fee. Ultimately however, you need to look at the total cost for acquiring a mortgage to ensure that you get a good deal. This is all not applicable of course if you are NOT getting a no closing cost mortgage.

When you take out a VA mortgage, you also pay an origination fee like I mentioned above. With VA loans though, instead of paying PMI, or Private Mortgage Insurance, you pay a fee to the VA so that they can guarantee your mortgage. BUT, if you have equity in the house or as a down payment, AND you have good credit, save your money because the VA charges the following fees to guarantee your mortgage.

Type of Veteran	Down Payment Amount	First Time Use	Subsequent Use for Loan until 09/30/11
Active Duty	None Between 5%-9.99% 10% or more	2.15% 1.50% 1.25%	3.30% 1.50% 1.25%
Reserves/National Guard	None Between 5%-9.99% 10% or more	2.40% 1.75% 1.50%	3.30% 1.75% 1.50%

So let’s take a look at this ‘deal’ that is offered by the VA. If you take out a $150,000 mortgage, you will normally pay $1,500 for your origination fee to the mortgage broker. I would argue that you can do better, but not too bad and not the topic of this article.

If you get your mortgage through the VA however, which is still done through a lender, your closing costs would be higher. I’m going to use the same table above, but replace the percentages with the dollar amount based on a $150,000 mortgage amount to show you the total cost to get a VA no closing cost mortgage.

Type of Veteran	Down Payment Amount	First Time Use	Subsequent Use for Loan until 09/30/11
Active Duty	None Between 5%-9.99% 10% or more	$3,225 $2,250 $1,875	$4,950 $2,250 $1,875
Reserves/National Guard	None Between 5%-9.99% 10% or more	$3,600 $2,625 $2,250	$4,950 $2,625 $2,250

So if you add in the $1,500 the lender will charge you to originate the loan, you are looking at a minimum of $3,375 in closing costs. What the VA allows you to do though is finance you closing costs into the amount of your mortgage. So theoretically, you could be paying interest on that $3,375 for 30 years! Now those closing costs, if paid out over 30 years at today’s rate of 5% will cost you $3148.20 in interest! So in effect, you are paying $6,523.20 to take out the VA mortgage. This is also assuming the lowest funding fee charge, so really, for Active Duty members putting down 10% or more to purchase their house! So you can see how taking out the VA loan is actually quite expensive to do. If you could save money to put down on down payment or even to pay for your closing costs out of your pocket, that would be the best way to go.

Now granted, I realize that these numbers actually apply to those individuals who only take out that one mortgage and live in their house and actually pay off their mortgage at the end of that original 30 year mortgage. Statistics show us that this is not the case and that most Americans actually move approximately every seven years. Once you are in the house though, don’t spend the money on frivolous items, save the money for that house your going to purchase in the future. The best way to keep the money in your pocket is look for no or low closing cost mortgages.

As I have hopefully demonstrated above, the VA no closing cost option is really a misnomer because the cost is large, it is just hidden in 360 small payments in regards to the closing costs being financed into the 30 year mortgage and with interest charges over that long time period, the closing costs are almost double!

Another drawback to VA mortgages is because of the increased regulation for the guarantee of the loan by the federal agencies, mortgage lenders usually charge a higher rate for the same mortgage too. So not only are you paying for your closing costs over a long period and higher cost in the form of paying interest on your closing costs, you also are looking at paying a higher interest rate for that mortgage. The payments on a $150,000 5% mortgage is $805.23 versus the higher rate of a VA mortgage at 5.125% which is $816.73. That’s only $11.50 per month, but with 30 years of payments, that’s $4,140. If you throw in the interest expense for the closing costs being financed, your looking at over $7,000 in extra interest, just for the benefit of going with a VA no closing cost mortgage. For me at least, that is no good.

If your still active duty and will be PCS’ing approximately every 2-4 years, then PenFed’s 5/5 ARM would be the best way to go or another comparable ARM because you should theoretically be moving before the 5 year ARM adjusts.. The way it works is your mortgage your rate is fixed for five years and then it resets every five years. PenFed will also cover most of your closing costs so that your out of pocket expenses are minimal. That would be the best way to go, and then you could refinance, if you had enough equity, with a no closing cost mortgage.

Many states also have localized mortgage programs for residents of their states which can offer low interest rates, low closing costs, and other benefits that you won’t find with VA loans. They do of course come with stipulations like you cannot sell the house for a certain period of time, you cannot rent out the house, etc. Check in your state to see what programs are offered that you may qualify for.

As long as you have cash in hand for down payment or closing costs, that would be the best way to go because of the cost. And because of the nature of the Active Duty military and really, the way we Americans move around approximately every seven years, getting loans for with closing costs are a big drain on your personal finances and your cash pile.

I will include more information once I have more information, but Wells Fargo has a 1-2-3 No Closing Cost refinance mortgage available for existing customers as well non customers in which they will refinance your mortgage for no closing costs as long as you fit their lending requirements. I don’t know what their requirements are, however, this is my profile:

Credit Score: Over 720

Debt to Income: Less than 30%

Home Loan to Value: Less than 65%

If you fit this profile or are similar, it wouldn’t hurt to take 20 minutes of your time and see if you qualify. I can’t vouch for the program at this point, once I close on my mortgage I will write up an article on my experience.

As you can see, with good credit and cash in your pocket, you can get a no or low closing cost mortgage with minimal costs and not get ripped off with a VA mortgage. This would be the best way for your personal financial situation and allow you to ultimately get the best deal possible. Remember though, that lenders will try and get as much money from you as possible, so be prepared to shop around to find that mortgage deal. If a lender tries to pull a fast one by changing details of the deal at the last minute thinking you will still take that mortgage, then be prepared to walk, or be taken advantage of.

As this article shows, VA mortgages are not the a good deal for mortgages out there because of minimal or no closing cost mortgages through traditional methods available out there so that can acquire a no or low closing cost mortgage without going through a federal program that actually costs more than a conventional mortgage.

No Closing Cost Second Mortgages

Second mortgages are mortgages which are in second position and can be used for a variety of things, vacation, education, remodel, car, whatever. However, I would suggest against using second mortgages for any frivolous items like cars, vacations, etc. Using the money to remodel and improve your house, or higher education would be a wise move though.

There are two kinds of second mortgages. The first one is a Home Equity Loan, or HEL. Just as the name suggests, it is just a loan with a fixed percentage rate for a fixed period of time, whatever that may be, 10, 15, 20, etc. Your payments are always fixed until the loan is paid off. Once the loan is paid off, then the lender will cancel the lien on the house and you are then again able to get another loan. This does not mean that you cannot refinance a HEL, you just have to reapply and get a new loan, which usually pays off the original HEL. Some lenders may have other requirements to allow you to refinance your Home Equity Loan.

HEL's are most useful when used for fixed items and terms because of the way they are designed. If your financial needs may fluctuate as life goes on, then a HELOC may be the best way to go to access to your home equity. Of course, the HEL also allows you to lock in a fixed interest rate. In today's interest environment, that may be the best option. There is a lender out there that is offering a HEL at 4.99% fixed for up to 20 years. Can you imagine paying 4.99% for 20 years? This does not even take into account the interest rate after you take into account the tax deduction for the interest you may pay on it. Needless to say, this is an attractive proposition because nobody can say what the interest rate will look like in 5 years or 20 years, but I doubt it will be this low. We are in uncertain times and that is why the rate is so low currently. One thing to watch out for is if you payoff the HEL too soon, in the case of the lender I mentioned above, 24 months, then you will have to pay for all of the closing costs that lender incurred. This is a pretty standard practice, so if you don't want to pay for the closing costs and make it a truly no closing cost mortgage, then make sure you keep the loan open for 24 months or whatever timeframe your lender requires of you.

The second type of second mortgage is usually called a Home Equity Line of Credit, or HELOC. This is usually a variable interest rate which adjusts as the underlying index adjusts. Many HELOC's are tied to the Prime Rate, which is currently at a very low 3.25%, with an adjustment. Some institutions have a markup, others have no markup, and yet others have a prime -1% markup. As an example, the prime is currently 3.25%, and the lender mentioned above charges prime minus 0.50%. So that institution is currently charging 2.75% for their HELOC's. That is CHEAP money, I don't care who you are, because the effective interest rate is much lower once you take into account the tax benefits for the interest deduction on your taxes. This rate will fluctuate as the prime rate adjusts in this example. With the adjustment of the rate, the payment will also adjust.

Because the HELOC's are variable, they usually let the consumer pull money out of the Line of Credit as required for a fixed period of time. Once that time has expired, then the loan becomes a fixed rate and term loan like a HEL. So your payments will then include both the interest portion as well as the principal portion, therefore, paying down the loan amount. Your payments however will not adjust because the intent is to pay off your loan in the timeframe called for in the loan. Excluding the fixed portion, a HELOC operates much like a credit card. Some lenders actually issue a VISA or Mastercard branded card so that you can access your HELOC.

HELOC's usually also come with an annual fee. This is so ridonkulous in my opinion. The beauty of competition and a capitalist society is there are many different lenders out there who also in the name of competition do not charge an annual fee. I would suggest you go and find one of those lenders and get your loan through them. The lender I referenced above does not charge an annual fee.

In today's current credit environment, many people have been finding that their HELOC's have been cut because of a number of reasons given by the lenders. The home values in the neighborhood you live in could be decreasing and so the lender deems that your LTV has gotten too high and therefore decreases your available credit. The other thing is your credit profile has changed for the worst and therefore the bank wants to limit their exposure to you because of your changed economic situation. They will attempt to close or limit your HELOC availability because of this also.

The other thing that they have been doing is just plain outright closing the line of credit. Needless to say, these actions could not be coming at the worst possible time for you and other consumers I'm sure. The only way I know to prevent this from happening is to take out all the available cash in your Line of Credit. That way you have the cash in your pocket and the lender has no choice but to keep the loan open until you make payments or pay off the loan.

Many people shy away from HELOC's for whatever reason and I understand your debt shy or don't want the temptation or whatever. However, the best time to get your HELOC is when you are fully employed and can show that you can repay the loan. If you apply for a HELOC when you've lost your job, well, that's too late. Would you loan money to a consumer who had no employment and therefore no way to pay you back. Just smart decisions on the part of the bank in my opinion. So go and get that HELOC on your house assuming you have available equity and let it sit at $0.00 balance.

I mentioned that HELOC's were primarily tied to the Prime Rate set by the Federal Reserve board. While a majority of HELOC's I've seen are indeed tied to the Prime Rate, they are not all set to that index. There are many different index's available. There is the LIBOR index and even more rare, the 1 Year Treasury Bond HELOC. The Treasury Bond rates change weekly and are therefore very administratively intensive and cost more money to maintain, and therefore not very many lenders provide this index. The LIBOR rate is not very popular only because many people are not familiar with the LIBOR index. The LIBOR is an interest rate set by banks in Europe and is charged to banks that borrow money from other banks. The LIBOR is set in the morning, and can change throughout the day though. I'm sure there are lenders out there that can and do set their index's to other more exotic terms; I would suggest staying away from them as they are not readily advertised and may be difficult to track and understand. I like the easy stuff, and the Prime Rate is easy for me.

On top of the index, I mentioned earlier, different lenders will then have an adjustment on their index. That adjustment could be a subtraction on the interest rate, no change, or an addition to the prime rate. Regardless, the margin as it is referred too is also set depending on your credit score. If you have a high credit score, you are likely to get favorable terms. If you score is not that great, you may not get the most favorable margin setup. Regardless, your credit as always, determines how much in interest your going to pay on this money. To save money overall and not only in this transaction, keep your credit score as high as possible.

Second mortgages, or 2nd mortgages, depending on how you 'say' it, are a useful tool and they should be considered when you require access to cash locked up in your home equity. Beware however, that if you are looking at going the variable rate, or HELOC, route, get the line of credit when you don't need it, because no sane lender would or should lend you the line when you have no means of paying it back. The costs to acquire a second mortgage is pretty low to free because most lenders will pay for the costs to extend the loan to you, although some may charge a yearly maintenance fee which you should stay away from.

Investment Property Mortgages

Investment properties are a good way to increase your networth, however, unless you have cash sitting around, you're going to have to take out a mortgage to purchase the investment property. The type of mortgage you will have to take out are called investment property mortgages. These mortgages are usually more difficult to acquire because from the banks perspective, they are more risky because the owner of the investment property could just stop paying on the mortgage because they don't have the incentive to maintain a roof over their own head.

In the past, investment property loans normally would require the investor to put down at least 20% to purchase the property. In the recent past however, due to the overwhelming availability of credit, some investment property mortgages required no down payment and allowed individuals to purchase property with no cash out of their pockets. Due to the current credit crisis that the nation is experiencing, investment property mortgages have started going back to the normal 20% down requirements if not more. You also would require excellent credit.

The whole $0 down payment for even owner occupied housing now a days require down payment and usually closing costs to be paid to get the mortgage. This is all because in a normal environment, the purchaser of property should have their own skin in the purchase of their own houses. In the past, those with minimal investment in the property would be quick to stop paying on the investment property mortgages if they fell into economic difficulty. To help protect the banks position, they require real estate investors to put down 20% to help reduce the risk and make the investor more likely to keep paying on the investor mortgage. They are after all, hopefully collecting rental income which should then apply to the mortgage and allow the investor to make money and the bank to receive their monthly payments. Of course, economic situations can change for the worse and make it difficult for the investor to continue to make those payments. If you had to decided on making the mortgage payment for your own house versus making the payment on your investment, which decision would you make. That is why investment property mortgages are riskier for makes to make.

Needless to say, because of the need for down payments on the part of the investors, there is no available no closing cost mortgages available for those of us who want to purchase investment properties. Needless to say, this does not bode well for those of us who are cash poor but credit rich to be able to acquire investments. This is probably for the best because there are many individuals out there who are out to make the quick buck, but are also quick to walk away if the investment does not pan out. These are rational thought processes in my opinion, however, they do not bode well for the different parties involved.

This presents a problem for those of us who seek investment properties. Well, another tactic you can take is to get a Home Equity Loan, HEL, or a Home Equity Line of Credit, HELOC, to come up with your down payment to purchase the property that you are looking at purchasing. This assumes that you will be able to pay your monthly payments and the payments do not present a burden on your daily living expenses. Currently, you can acquire a no closing cost second mortgage from various institutions, not everyone can or will qualify for these loans however because of the tightened restrictions.

If you currently own your own house and are still sitting on a pile of equity in your house though, you could potentially refinance your house and pull some equity out to make that down payment on that investment property. You could also just do a no closing cost refinance mortgage, get your cash out of the house, and then apply the cash to the purchase of one or more investment properties which fit your investment profile.

There are mortgages out there that are well suited for you, but there are also mortgages out there that would not be well suited for your needs. If you are looking for increased cash flow, refinancing your mortgage to a lower rate and extending the loan term works, but you could potentially pay more in interest over the life of the loan. One thing brokers do to make a no closing cost mortgage is roll all of the costs into the loan. For instance, if you were going to refinance a $100,000 mortgage, and closing costs were $2,000, the new loan amount with the closing costs rolled into the loan would be $102,000. The negative aspect to that is that now you could potentially be paying interest on the closing costs for up to 30 years. So that $2,000 actually ends up turning into $6,000 or there about because you’ve paid interest on it for 30 years. In the end, that figure is a rip off, but that is my opinion.

The best thing to do for investment property mortgages is to save your money or pull it out the equity in your own house through a low interest rate HEL or HELOC. I would lean towards a HEL because that is a fixed interest rate for a fixed period of time versus the HELOC interest rate is subject to move based on the underlying interest rate the HELOC is based off of, usually prime rate. At this time, the prime rate is at an all time low and who knows how long it will stay there. One thing that I am fairly certain of is that the rate has a better likely hood of going up because it cannot go down much further.

Investment property mortgages also carry a higher rate of interest to compensate the lender for the higher risk as well. For instance, the rate difference can be as high as 1%-2% higher than an owner occupied home mortgage to include the higher closing costs. Investment property loans are usually defined as property that is four units or less. If you go over the four unit threshold, that moves you up to the commercial property loans which are a whole another beast that this blog is not going to discuss. Needless to say, these loans are like business loans and you have many more hoops and costs to go through to acquire a commercial loan. Doesn’t mean it cannot be done, it’s just that much more difficult.

Another restriction is imposed by Fannie Mae and Freddie Mac. They are government sponsored agencies and because they purchase a majority of the mortgage loans made to individuals out there, they can dictate which loans they will purchase and indirectly, dictate mortgages that individuals can take out. Per Fannie Mae and Freddie Mac guidelines, they will only allow four outstanding mortgages to be taken out by an individual at any one time. The only way to get around this restriction as far as I know is to either pay off the mortgages so that you can get another property. If you don’t have the cash available, one way of doing that is getting the HEL second mortgage like I mentioned earlier and transfer the debt onto your own personal residence. You may also be able to potentially get an investment property HEL on the investment property and get around the four property restriction.

Regardless of the many restrictions out there, there are options to get around restrictions and different ways of doing things. Like they say, there is many ways to skin a cat, and this would be one of those situations in which the saying applies. Regardless, if your looking for an investment property mortgages, the best place would be to try locally with banks in the area you live in, then try elsewhere. In the current credit environment however, investment property mortgages are difficult to come by, but they are not impossible.