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Old 10-15-2013, 10:07 PM
 
1 posts, read 3,499 times
Reputation: 11

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We got a call from our current lender today regarding refinancing our current 30 year mortgage. The lender shared numbers with us over the phone (1) 15 yr at 3.75% with no closing costs (2) 15 yr at 3.5% with closing costs rolled in (3) 15 yr at 3.5% with closing paid separately. The lender told us that we would recoup our $3500 closing costs in less than 1 year and we provided them the information to proceed with the application for the 3.5% with closing costs rolled in.

I was just emailed the application and paperwork tonight. I have not signed anything. Now that I have the numbers in front of me and I am calculating the math myself I see that the savings from the 3.75% with no closing vs. 3.5% with closing rolled in is only $18/month ($47/month savings if comparing closing costs paid outside). I am looking at over 6 years to recoup the closing costs...not less than 1 year.

Can I back out of this process and not move forward? I really don't feel like I trust this person anymore and am questioning the decision to continue with them. They did take my credit card info to process for credit check (which they did) and appraisal (which they have not done). If I can back out will I still be responsible for the appraisal fee even though I didn't move forward with anything?
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Old 10-16-2013, 09:30 AM
 
Location: Southern California
4,350 posts, read 4,931,746 times
Reputation: 2129
I wouldn't trust them either. They probably meant you will get your closing cost back in one year compared to your existing loan. You did it the right way in comparing apples to apples and roll the cost of the 3.5 into the balance and looking at over 6 years, if you loan is about 350k.

They probably compared it to your existing loan and the cost will be recovered in 1 year. When you say current lender , is it a big bank? You shouldn't have to pay if you were provided wrong and misleading information.

But before you decide to pull out would you still be able to get that rate today?
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Old 10-16-2013, 11:15 AM
 
3,317 posts, read 7,253,255 times
Reputation: 4095
Quote:
Originally Posted by Meowgi'sMom View Post
We got a call from our current lender today regarding refinancing our current 30 year mortgage. The lender shared numbers with us over the phone (1) 15 yr at 3.75% with no closing costs (2) 15 yr at 3.5% with closing costs rolled in (3) 15 yr at 3.5% with closing paid separately. The lender told us that we would recoup our $3500 closing costs in less than 1 year and we provided them the information to proceed with the application for the 3.5% with closing costs rolled in.

I was just emailed the application and paperwork tonight. I have not signed anything. Now that I have the numbers in front of me and I am calculating the math myself I see that the savings from the 3.75% with no closing vs. 3.5% with closing rolled in is only $18/month ($47/month savings if comparing closing costs paid outside). I am looking at over 6 years to recoup the closing costs...not less than 1 year.

Can I back out of this process and not move forward? I really don't feel like I trust this person anymore and am questioning the decision to continue with them. They did take my credit card info to process for credit check (which they did) and appraisal (which they have not done). If I can back out will I still be responsible for the appraisal fee even though I didn't move forward with anything?
You can do ANYTHING you want. You are not bound to them. You can change lenders, or if you like these guys (and ladies), you can keep them working for you.

You are in control. If you sign a disclosure package that includes a rate lock sheet, then that would be the rate- - but you can still change lenders.

Nothing is firm until you close.
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Old 10-17-2013, 09:42 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,618,792 times
Reputation: 8078
If you don't trust a person, that's one thing.......pack up your toys and find another sandbox. No explanations are necessary, move on.

But I would like to say I really do believe we have culled the herd in our business, because only those that love this business would still be here. In this anonymous' person defense, I think it was the LO's perspective you received. Every lender I have worked for - if I provided variations on quotes (x rate w/ $ lender credit vs. y rate with 0 lender credit) and you decided to lock, you locked into that day's matrix and could change up your lock to the other scenario, as long as you stayed with what was available on your day of lock-in.

Without looking at your specific set of circumstances, yes, it may be cheaper to go with the higher rate and pay costs out of pocket. However, your LO's perspective could have been, "money is cheap and you would never be able to get those funds back into your bank account from the home." In many circumstances I would have given this exact advice, but I don't know yours.

Today, in mortgage financing, there rarely is an empirical choice when making a selection between two scenarios within the same matrix. What serves you as the best choice may not be that of someone else and you would both be correct, with your own reasons.

I do urge you to determine if you do have a trust issue. (Did you by any chance ask what this LO for their recommendation?) And if you decide you don't have an issue, see if your LO can switch to your new choice - chances are it's not a big deal.
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Old 10-17-2013, 09:47 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,618,792 times
Reputation: 8078
To answer your question on the appraisal - they may not keep the fee if the appraisal was not performed.
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Old 10-17-2013, 12:33 PM
 
Location: Southern California
4,350 posts, read 4,931,746 times
Reputation: 2129
Quote:
Originally Posted by SmartMoney View Post
To answer your question on the appraisal - they may not keep the fee if the appraisal was not performed.
Is there such thing as a cancellation fee once the appraiser gets assigned?
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Old 10-17-2013, 12:51 PM
 
Location: New York
2,251 posts, read 4,161,023 times
Reputation: 1607
.

** All 100% correct on above posts **

You paid for a credit check? < ....Sounds since your lender is Wells Fargo...

Just spoke to a friend that did a "Stream-line" in-house refinance with Wells Fargo last year. There was no closing costs, no charge for a credit check, and they did an AVM appraisal - no charge for an appraisal.

First contact them canceling the appraisal, by law any one that runs your credit has the provide you a copy (request yours to be emailed).
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Old 10-19-2013, 01:15 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,618,792 times
Reputation: 8078
I have never heard of a cancellation fee, not in our current (Frank/Dodd) environment...........I do know if you cancel the appraisal, they are required to issue a refund.

The market has steadily improved since Thursday morning, chances are if you do move your loan, you will get a better rate. I typically would tell someone to stay where they were at and try to renegotiate their lock-in (most lenders will rather than lose you). But since you have issues with your loan officer, it may be in your best interests to move.
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Old 10-25-2013, 02:17 PM
 
Location: Plano, TX
75 posts, read 218,294 times
Reputation: 24
cancel the deal in writing... ask them to refund the appraisal fee
if an appraiser calls to schedule, politely tell them you have decided to NOT refi.... they wont come out.

if you get any grief, threaten to contact the CFPB
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Old 10-25-2013, 02:23 PM
 
Location: IGO CA
350 posts, read 349,115 times
Reputation: 843
I recently did the same thing. After getting the package and going over everything, hubby and I decided we would do just as well paying down the mortgage ourselves over the next five years. Called and emailed our intent to cancel. We paid no fees or penalties.
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