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I wanted to refinance my loan 4 months after the home purchase. Wells Fargo rep said I needed at least 6 months of payment history. So after 6 months, I started shopping around for a refinance. The lender I am currently working with said that the Wells Fargo person was incorrect. I could refinance after 4 months as long as I don't cash out and I wasn't. The rep did not even ask for this. The rate was significantly lower at that time. If I refinance today, I will be losing thousands of dollars compared to the 4-month time.
I originally had 30 year FHA. As of now, I have more than 20% equity. My financial situation improved and so I made large payments to increase my equity.
Unfortunately with the FHA, PMI goes for 5 years minimum even with > 20% equity.
Now, I have 2 questions:
1- Is the information about refinancing correct? Could I refinance 4 months after purchase with my loan situation?
2- If yes, what can I do to recuperate my losses from WF? It is the refinance rep who said I could not refinance in 4 months.
"as Wells Fargo isn't at fault, they just told you what they require"
There seems something wrong to me. Lack of adequate training for the reps? Or desire to keep higher interest payments from the buyer? The rep didn't even ask me if there was a cash out or not. I told them explicitly that I had means to reach 20% equity before refinancing and I wanted to switch to a lower rate besides removing PMI. Whose fault is this?
Was the loan officer an idiot for not asking questions? Probably.
That doesn't make them liable for any losses you incurred.
I haven't checked, but Wells Fargo may require you own the home for 6 months to refinance regardless if it's cash out or not. It could be their own company policy. Or if you are in a Wells Fargo loan, perhaps it's their policy they can't refinance a Wells Fargo loan unless it's 6 months old.
It is almost certainly just a requirement specific to that lender. I know of some lenders who will refinance you almost immediately and some who require 3 months or 6 months. So he was probably telling you what WF required and not what other lenders may require.
I'd say the odds of WF being responsible for financial loss in this instance is next to nothing, especially if it was a verbal conversation only.
This is the exact reason that a broker should at least be in the conversation if not the lead in all financing. A broker would have the option of many lenders and their guidelines, not just ,as in this example, Wells Fargo. If you talked with a broker 4 months ago you would have had the rates available then. Get a referral from a trusted source and see what is available now.
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