The Structure

· Mortgage Refinance, Wells Fargo
Authors

This may seem boring but I should probably lay some background on the deal structure.

Currently I have two mortgages with Wells Fargo Home Mortgage: one on the townhouse I used to live in and use when I am in town and one on an investment property; and an equity line with Wells Fargo Home Equity secured by the townhouse. After explaining my goals to “Faith” my loan originator, we were going to refinance the two mortgages and subordinate the equity line.

Current mortgages:

5.75% with Wells Fargo Home Mortgage;
6.25% with Wells Fargo Home Mortgage;
Proposed Loan to Value – 41.2%
Proposed Loan to Value including maximum of Wells Fargo Equity Line – 61.2%

After doing the math and seeing I was hovering around 61% loan to value we decided to also add in a small balance I owed on a piece of vacant land that was financed at 7.5%. When all was said and done this is what the proposed deal looked like:

Current mortgages:

5.75% with Wells Fargo Home Mortgage;
6.25% with Wells Fargo Home Mortgage;
7.5% lot loan with another bank;

New mortgage with Wells Fargo Home Mortgage at 3.875 with .75 of a point.
Proposed Loan to Value including maximum of Wells Fargo Equity Line – 63.2%
Interesting tidbit:  my payment on the new loan would be LESS than the payment on the new loan.

It seemed like a no-brainer for everyone. I got a great new interest rate, Wells Fargo Home Mortgage had me on the hook for 30 more years at a payment they knew I was capable of making, and being that I was already a Wells Fargo customer I would not have to go through the mountains of paperwork required when you go with a bank you do not have a relationship with. Yay!

More specifics in case you are really interested:

Location – Carolina Coast
Ownership – Condo
Occupancy – Second Home; my primary mortgage
Market Condition – Stable to appreciating

Creditworthiness – Outstanding. I have very little debt, credit cards are paid in full each month, and my credit score is right around 800.

Cash Reserves (in Wells Fargo accounts only) – enough to pay off proposed new Wells Fargo loan
Verifiable Assets – Plenty

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