Have Questions about Mortgage Investors Corporation?
Please allow me to address everyone's comments and share a few:
Thanks to all Veterans who have served our country well. You deserve the very best from Americans in serving you in return.
Q1: Who is MIC and what do they offer?
A1: MIC (Mortgage Investors Corporation, aka Amerigroup Mortgage Corporation) is a mortgage lender who only provides VA loan financing to Veterans with present VA loans who want to refinance. If you are buying a new home, or have a loan other than a VA loan, they can't help you. And they only offer a 3/1 ARM loan. Some Veterans may benefit from this type of loan and some will not.
(A company who recommends a one-size-fits-all concept to everyone is selling a program; they are not trying to match the best financing program available to meet their customers' needs.)
Q2: What does MIC charge to get a loan?
A2: MIC charges 3 points total (3% of the total new loan amount being refinanced), VA charges a funding fee equal to 1/2 point, and there are new title company charges for title insurance, closing fee, and other miscillaneous fees. MIC will finance all the charges, so your present mortgage balance will increase by 3.5% plus other closing costs. You may have to pay other fees depending on which state you live in plus deposit funds into a new escrow account to pay for property taxes and homeowners insurance.
Q3: What does it take to qualify for an MIC loan and can I get this type of loan anywhere?
A3: If you cannot qualify for other financing, the streamline program MIC offers does not require an appraisal, credit score, income verification, and only requires that you are current on your present VA mortgage (with no other liens against the property). However, other VA lenders offer streamline refinancing too, and they offer fixed rates too!
Q4: Are there better loan options for me?
A4: It is my recommendation that if you are considering refinancing your VA loan, see if you can qualify for other types of mortgage financing like FHA or Conventional financing. You can refinance with very little or no closing costs with some lenders.
Q5: What if I want to consolidate debts or get cash out for home improvements or for some other reason?
A5: MIC can't help you!
Q6: Is a 3/1 ARM a safe loan or should I get a fixed rate?
A6: MIC representatives will tell you it is a safe loan. However, since the interest rate is subject to an annual adjustment of 1% each year (to a maximum of 5% total), after the first 3 years, it very well could increase considerably over time. Nobody can predict what interest rates will be, but we can look at history. Copy and paste the weblink below into your browser to see what the rates have been between 1972 and the present:
You will see that the rates since 1972 were over 10% for 10 of 11 years (1979-1989), over 9% for 17 years, over 8% for 21 years, over 7% for 29 years, and over 6% for 33 of the 40 years through 2011.
This means rates have been traditionally much higher for the vast majority of the past 40 years. If you can get a 30-year fixed rate at 4.25% or a 15-year fixed rate at 3.75% (with 3 points) or at rates of 5% or 4.25% respectively (with no closing costs), why would you want to risk possible rate increases which are more likely to occur than not for a 3% 3-year rate?
Q7: What if the MIC representative is using high pressure sales tactics?
A7: If the recommended loan is really the best option for you, they should realize that if you went to discuss it with a professional adviser like a financial planner or a CPA, then your adviser would agree; therefore, do not sign anything until you get professional advice.
I am a licensed mortgage loan originator recommending to talk to other lenders, brokers, banks, or credit unions. Most of all, seek advice from appropriate and qualified professional advisers for all your financial planning concerns-NO DIY!