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American VA Loans? VA Mortgage Refinance Company. Ever used them?

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So this company sent me an offer to drop my mortgage rate down 3% to 2.5%. 

No out of pocket expense to me. All fee financed in new loan. 

To me it seems too good to be true.

Has anyone ever used this company? 

I'd hate to ruin my first home purchase by refinancing with a scam company.


Any help/ knowledge is greatly appreciated.


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Ok.  While it may work out well for you, I suggest you "be informed". Your loan officer "may" not tell you stuff you should know before you "pull the trigger" on a new loan.  

1.  "Built in fees" are not the same as "no fees".  Example:  If you currently owe 100,000 on your home, after the new loan you would likely owe $102,000 (or more).  This increases your mortgage.  It would "not" be recommended if you plan to move within the next 2 years or so.  

2.  Since you will "owe more money" after the loan, you will have a "break even point.  Using the above example, lets say your payment goes down 30 dollars per month, and, let's say the total cost to refinance is $3000.  (This is an example only, use your numbers.  Ask the loan officer how much it will increase your loan, and how much it will lower your payment.). In this example, if you save 30 dollars per month, it would take 100 months for you to break even.  (Your break even point).  Are you sure you will stay there 8 years or more?  If not, you should not refinance.  (100 month = 8 years 4 months).   

3.  Remember:  If you have been paying on the loan, say 5 years, you have 25 years left.  Well, if you get a new 30 year loan, then that may not help you much, yea, you lower the payment but then pay THIRTY more years, instead of the 25 years you have left now.  

     I would not want to lower my payment, 30 bucks, then have to pay "another" 5 more years.  

      We used to say you need to drop the interest rate "at least about 1.5% to be worth it.  You might still come out ahead with a 1 percent loan interest rate reduction, but Im skeptical that a reduction of "just" .5% would be worth it.  

      Still, run the numbers.  If you cant figure it out, well, I probably can: (with the following information)

1.  Amount owed now. 

2.  Current interest rate.

3.  How many years have you been making payments?  (that is, when did you buy your home, unless you already refinanced it)

4.  What is the total cost to refinance.  Include points, appraisal (if required) credit report, title insurance..everything.  Total cost.  How much will it increase your loan balance?  

5.  New interest rate?  

6.  Type of loan: VA, Fha, etc.  

7.  Do you need or will you get cash out?  If so, how much? 

You dont have to provide "any" of the above information "unless" you want me to figure it out for you.  


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