Refinance rates and fees

[Colbi Ight]

I recently had an independant mortgage broker send me a fee sheet on a house I was looking at refinacing. The home is valued at $155K and I was going to pull $116k out. I have excellent credit and ZERO debt. My bank statements showed over $200k a year running thru my accounts so I felt as if I was a solid candidate for refinancing my rental property.  I thought these were very high BUT I am here to ask the pros for help. I have owned the property over 2 years and have a good tenant paying $1,350 a month for the last 4 months.

Terms

[Chris Mason]

Originally posted by @Colbi Ight:

It was a DSCR loan.

 That explains it. You can have an 80000 FICO score and $20m in the bank, but if you don't check all the Agency FNMA boxes, there's no back end subsidy, and any/all profit for the lender must come from borrower's rate and fees.

A vanilla $500k loan might have a $1000 underwriting fee and get a certain rate, and consumers think the $1000 is the profit center. Not so, the $1k almost doesn't matter. Then on the back end the lender sells it to FNMA for $515,000, $15k in profit. THAT is where the action is. If there's no sale to FNMA, that needs to come from you, or the lender simply wouldn't do the loan at all.