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Why can't buying a home be more like buying a car?
I can go out and buy a $90,000 Range Rover in a couple of hours and drive it home.
I can get a $50k Credit Card with just a signature.
Why should a 100k refi takes months, generate mountains of paperwork and cost thousands of dollars? My December Loan application resembled a small telephone book... there were so many pages.
I suppose it is because a lot of people make money on Real Estate finance.
Just venting because some of the charges I see people paying to refi are simply nuts... many times it will be last minute fees spikes or higher rates...
In December, I had applied for a simple home refi and thought all was good... might as well jump in on the low rates... right?
Four days after my rate lock expires, my lender is ready to schedule the closing... only one minor change... I will now cost me 1 additional point... not to worry, they can roll it into the new loan...
I wasn't born yesterday and remained firm on the rate and term I signed on for... lender was the one that took Christmas to New Years off...
So I refused and went to my Credit Union... now they are having issues while the rate lock clock keeps ticking...
Pardon my venting...
So why can't homes be more like cars... each has a title?
Last edited by Ultrarunner; 02-21-2013 at 03:27 PM..
Oh I'm with you on this one, about 9 years ago my wife and I were seriously considering purchasing two connected homes (twin) in an upstate NY college town. Student occupied with a solid rental history.
The RE agent almost had a stroke when he realized that we were talking about just purchasing them on a credit card as the rental income would cover the monthly bill with a bit left over. (very low price market)
Now to be honest, we didn't buy as we decided that the combination of being long distance landlord, college students and local police was a recipe for disaster but I'll never forget the agents outright anger and confusion that someone dare consider anything other than the old mortgage sausage grinder.
Having bought and sold with and without mortgages, agents and even title escrow once...
It really is eye opening how many are involved in a typical transaction and they are all getting paid.
What I find challenging is the total lack of control the buyer or borrow has... really at the mercy of so many unless you are willing to say enough is enough...
Borrowers typically commit to a rate lock and are powerless to speed things along... lenders typically steer customers to certain title companies and buyers to certain lenders...
Too often, last minute squeeze is put on the buyer at a very emotional time... like sign this, pay this or risk loosing the deal...
A good, very well to do friend was buying a new home, one that his wife really wanted... even he was not safe from last minute tricks...
At closing, he read all the documents and pointed out the extra fees... title and lender got on the phone and said they were adjusted to market conditions... friend refused to budge and then came the pressure that all he needed to do was sign or the property wouldn't close and he might just loose the home and in the best case would have to pay to redraw the documents...
He asked for the phone, called his stock broker and asked to have a brokerage check for the full purchase price sent by courier because he was not going to disappoint his wife...
Miracle of miracles... the extra charges and fees were removed and the Docs redrawn at no charge and an hour later they signed...
Holidays will certainly derail the mortgage process. But I think most of the delays are the new laws "protecting" the home buyer and protecting the government from having to bail out another bank. We refinanced earlier this year and it was an absolute bear. The documentation we had to provide was just beyond ridiculous. But I work with a trusted lender in town and it was all done within our rate lock time frame.
Holidays will certainly derail the mortgage process. But I think most of the delays are the new laws "protecting" the home buyer and protecting the government from having to bail out another bank. We refinanced earlier this year and it was an absolute bear. The documentation we had to provide was just beyond ridiculous. But I work with a trusted lender in town and it was all done within our rate lock time frame.
^^^^ This, this, this and this again!!! And it seems the larger the down payment, the crazier the mortgage people become. I had to account for every dime.......and since I had sold my previous house 4 months before we bought the current one, my equity had been moved around a bit. Yikes.
We rolled all our refinancing costs into the new loan except the property tax payment due. Since they overestimated, we only owed about $1,500 at close. We brought a cashiers check from our credit union, but it was a shared credit union so the check had a different bank name than our savings account. For $1,500 we had to go back and prove it came from our savings account. Stupid.
This is financial reform that most of the country was screaming for after the housing bubble burst. The announcement of no more "liar loans" was applauded. What you are experiencing is the real life application of that law that states a lender must document a borrowers ability to repay the loan. Anytime funds come from anywhere but a direct deposit payroll check it must be verified that it was not borrowed because that could affect the ability to repay. This is federal law and not negotiable or going away. Because of these changes the experience and knowledge of your loan officer is more important than ever. Get a referral and don't pick by a mailing or internet ad- they may work out good but a referred person has a documetable track record with someone you know.
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I have to wonder when the insanity will stop... (rhetorical question)
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Welcome to the world where regulators make things 'better'.
I have spent a lot of money and time over three months fighting to refinance my house and have yet to succeed. And it is not because I don't have good credit, financial means, or unrealistic loan demands... no, it is because my finances do not fit into the little boxes on the computer screen.
It appears that underwriters no longer do risk assessment, evaluation, or even think, they simply see if your numbers fit into the profile sheet thy have to make the loan easily traded.
I have enough assets to buy my house several times over but most of it is in tax deferred accounts so rather than take the big tax hit all at once I decided to refinance for 10 or 15 years at today's low rates. Since I have been speeding already taxed money for the last eight years of retirement I do not have an income stream that fits into the little boxes. I have been told I simply don't have enough income to have a loan on the house!
Yes, I have had locks twice on attractive rates that are now gone. And once I rearranged my finances to fit into the boxes I was told I don't have a long enough 'history' of taxable income. Now I find they won't take 2012 tax returns (not even done yet because brokerage firms don't have to give numbers until later) because the IRS is delayed in making tax transcripts available.
Issues with new rules in mortgages and residential appraisals have been more roadblocks in trying to manage my retirement... on top of financial market distortion, twisted taxation, and the mangled health care marketplace offered by our inept governments.
This is financial reform that most of the country was screaming for after the housing bubble burst. The announcement of no more "liar loans" was applauded. What you are experiencing is the real life application of that law that states a lender must document a borrowers ability to repay the loan. Anytime funds come from anywhere but a direct deposit payroll check it must be verified that it was not borrowed because that could affect the ability to repay. This is federal law and not negotiable or going away. Because of these changes the experience and knowledge of your loan officer is more important than ever. Get a referral and don't pick by a mailing or internet ad- they may work out good but a referred person has a documetable track record with someone you know.
Interesting point...
The problem with W2 income is it could stop at anytime... employment for most is at will.
What I don't understand is a person that has enough cash to easily pay off the balance and is looking to switch from a adjustable to a fixed should be a no-brain er in a sane world...
Or, a person with 8 years with the same lender responding to a refi advertisement in the monthly mortgage envelope... they already know the property, intimate with the borrower and have already committed the funds.
Another thing I have learned is there are private bankers that have none of these requirements... some of the Docs I work with use them... they are adjustable or tied to a line of credit... these accounts are never sold on the secondary market... so I'm been told.
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