Leery of re-fi

[wnlbutterfly]

I have been trying during '09 to get the finances in order. One thing I thought would be a good idea was to re-fi our mortgage to lock in a lower interest rate (no $ out). I contacted the current mortgage holder and they gave us some info, and on August 24th we told them to go ahead with the re-fi.

At that time we had some basic info, and was told that there would be no closing costs. Sent all the paperwork in. Next time we hear something (six weeks or more) they need MORE info (same info actually), and the numbers had changed and we needed $400 in closing cost. Okay...now starting to wonder a little bit.

Then November we get another round of "we need more info because it has expired", and in this set of paperwork we see that our closing costs has now jumped to $1,200. I told him at that time that we could handle the closing cost if I KNEW exactly what the new monthly payment would be. If we end up saving $400 a month, then I don't mind paying more closing costs. He said he would get that info to me by Friday, guess he didn't say WHICH Friday.

Jump forward to Dec 16th, I get an email (from another person at the bank) saying they need all new paperwork again (bank statements, paystubs, and W-2's for 07 and 08...apparently they expire???) and they wanted it less than 48 hrs. No way!

A week later I sent them the info again, and didn't hear anything and poof, get an email (from another person) saying closing is THIS Wednesday. DH called today to ask for the info (interest rate, closing cost, PIIT), and they refused to give him that info.

I do not like how they have handled ANY of this. I forgot to mention the email by one person saying it was approved and she would be contacting us by Monday (that was before the last set of paperwork needed).

I told DH that they can send the paperwork for the closing, but if I don't like the numbers on there, I am not signing anything. I am just really shocked by the whole experience. We have re-fi'd once before and didn't have any of this. I thought it would be easier going with the same mortgage lender that we were current with.

I assume that we have that right not to follow through if we don't like the info at closing...any suggestions??? THANKS

[jIM_Ohio]

I have closed 4 loans on houses

2 purchases
2 refis


In all 4 cases the following items were true

1) I needed to supply given paperwork when an application was submitted- tax returns, pay stubs and credit reports
2) The rate is always tentative until it was locked
2a) on the purchases, the window to lock in was usually about 3-6 months
2b) on the refis the window to lock in was usually 1 day... meaning if I applied today, I could lock in no later than tomorrow morning. If I waited, I risked my application being denied because the rate was too high- payment too high for income etc...
3) All of the closings gave me a good faith estimate which showed closing costs and interest rates- this is required by law, so if bank is not showing you good faith estimate. then you should ask for it, and if questioned, find another bank.
4) Some form of deposit was always needed on all 4 closings. In the 1 "no closing costs" refi we did, we still had a $400 application fee which was credited back on the good faith estimate. Few banks want to run an application thru underwriting unless they know it will close.

I would be surprised if a bank did not have any upfront fees to confirm you will close the loan, those fees usually get credited back on my experience.

I would go to bankrate.com or quicken.com or a similar web site and try to refi thru there.

[cschin4]

Why did you refi? I think this can be overrated if you are not saving that much in interest. If you want to save in interest, you can easily prepay principle toward your current mortgage.

[wnlbutterfly]

We did pay $250 upfront. Not much but that is what they asked. And yes, they need all that paperwork, but they wanted it 4 times over (same stuff).

I only got one set of good faith estimates. I finally (just tonight) got the TIL with some of the info on it. Our interest rate on current is 5.875%, the new one would be 4.426% We had an ARM and wanted to go to a Fixed.

I won't know until I look at the actual loan papers, but they sorta hinted that it was a loan modification that Obama put into place. But when I looked at that online, I wasn't too sure if we qualified for that. However, if that were truly the case I could understand the delays a little better because I have heard that it was taking them a lot to process those modifications.

Thanks

[MonkeyMama]

I've had more refis than I can count. The one that went horribly wrong (took 4 months) was by far the worst - and not as frustrating as what you are going through. If it were me, I'd shop around and try to refi elsewhere.

Our last refi, we paid $0 upfront. Which was certainly unusual. But it does happen. Might have even been the same when we refied with the same lender, twice. That was much easier and quicker (though obviously not in your case).

BUT, your last post shines a lot of light on the issue. If it is a loan modifaction thing, then that is a whole other story. Wouldn't be surprised if bank is trying to get you to give up. All I Can say is, "Good Luck!" Though, if you do have the equity or means, I would still advise shopping around.

[snafu]

Wow, 5 months to refi with the same lender speaks volumes about that organization! I would contact their regional manager with your outline and ask for intervention given the time and effort you devoted to their obviously inefficient re-fi process that is costing them an inordinate amount of man hours!

Since all you wanted was to lock in from ARM, before signing I would politely [but firmly] request the fixed rate applicable in late September with all fees paid or charged applied to Principal in a good faith/loyal client gesture.

Perhaps you could remind the regional manager that it is cheaper to retain a good customer than beating the bushes for new business. All the research shows that when an individual is satisfied with service they may tell a few people, when they are dissatisfied they will tell anyone who will listen. epinion and sitesd like this gives you access to the multitude!

FWIW, I've always found it cheaper, faster, easier and more efficient to renew/refi a mortgage with a new lender, interested in acquiring new clients. Typically people move their other accounts to a new lender for the sake of convenience.

[Daylily]

I've only done one loan and one re-fi and both were easy and straight forward and there was no uncertainty in the process. I can understand your anxiety. Going down a point and a half is certainly going to result in some savings so I'd stick with it. One question though, if your new loan is truly a 'loan modification' rather than just a regular refi, are there any consequences to having received a 'loan modification'. Does it show up on your credit report in any negative way? I have no clue, I'm just asking. Anyone?

[wnlbutterfly]

Some info at least....

Finally got some more numbers, the PITI and closing costs. We need $950 for closing. I still have no clue to if it is just a regular re-fi or a modification. I guess the paperwork they send for closing will say. I still don't think we would qualify for modification, no job loss, income steady, home is worth more than the loan, ect. This was with Citibank (Citimortgage).

I will still be double checking everything before signing my name to the paperwork, but at least I feel a little better that they finally provided us with the info.

The difference in our current payment and the new one will be around $350 a month. I plan on paying that "extra" on CC's, then I can start making extra payments to the mortgage once those are taken care of.

OH, we did check with another lender before deciding to "go" with this one. I was even more leery of that one, just felt like all they were doing was adding closing cost onto our loan without changing much of anything (not a big change in the interest rate at all). So I thought I had done my homework....apparently not as well as I should have.