Refi runaround. Vent session in progress.

caulk_kingJanuary 20, 2009

This is so frustrating. Been working on this since mid-December. Got good faith estimates from 3 sources. Then rates went down a bit more (according to media) so got new estimates - rates down a bit, but closing costs up. One went from no origination fee to now charging one. How do you know what you'll actually be charged at closing. What is a good faith estimate? Do the rates somehow tie to the origination fee? If they go down, are lenders forced to charge it to get the lower rate?

I also don't like to be rushed, so when someone calls at 4:00pm & says you have until 4:01pm (an exaggeration but not by much) to lock the rate, my natural instinct is to back away.

I don't want my frustration to come back & bite me, and I know no one on here has a crystal ball - except maybe Dave Donhoff - but how can you find out what this is really going to cost you & what is a good rate today? All you hear is that rates are going down - but not so today?

Thanks for listening - I feel better now.

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dave_donhoff

Hi CK,

This is so frustrating. Been working on this since mid-December. Got good faith estimates from 3 sources.

... and you are doing so because... (wait, don't tell me...) you are thinking that these GFEs are somehow actually meaningful, reliable, and valuable for something other than birdcage liner, right?

Then rates went down a bit more (according to media) so got new estimates - rates down a bit, but closing costs up.

Trying to time the financial markets by listening to journalists is complete and utter insanity.

One went from no origination fee to now charging one. How do you know what you'll actually be charged at closing.

Find an honest, competent financial professional you trust... and simply ask.

What is a good faith estimate?

A non-binding preliminary guesstimation of approximate rates and fees based on loose parameters known at the time is is prepared.

Do the rates somehow tie to the origination fee?

Sure... you probably missed my re-posting of recent. Check it out here;

""
An Insider's View of Refinancing (the 2009 remix ;~)

If they go down, are lenders forced to charge it to get the lower rate?

Rates & Fees are linked, like a teeter-totter.

I also don't like to be rushed, so when someone calls at 4:00pm & says you have until 4:01pm (an exaggeration but not by much) to lock the rate, my natural instinct is to back away.

Good instinct... a BETTER instinct would be to shop your professional instead of the commodity... else you're begging to be had.

I don't want my frustration to come back & bite me, and I know no one on here has a crystal ball - except maybe Dave Donhoff -

Its still in the shop, unfortunately...

but how can you find out what this is really going to cost you & what is a good rate today? All you hear is that rates are going down - but not so today?

The answer is my ancient, shop-worn rant;
Choose your provider according to preliminary "quotes,"
And you've simply chosen the most successful Liar.

Choose according to character quality, competitiveness,
honesty, and your personal assessment,
And you will set yourself up for the better Experience AND
the better bottom line pricing!©

Cheers,
Dave Donhoff
Leverage Planner

Here is a link that might be useful: An Insider's View of Refinancing (the 2009 remix ;~)

    Bookmark   January 20, 2009 at 5:31PM
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caulk_king

Many thanks for the reply & for the link to the 2009 remix! I did miss that the first time around.

I went to 3 people we know - our current mortgage holder (big bank that ended up with it - don't know them personally), our current small town bank (know everybody there) and the broker that had done all of our previous mortgages and several of our friends that we've referred. Everybody just seems flaky this time around, but I guess it's just a volatile market.

    Bookmark   January 21, 2009 at 12:18PM
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eal51

I'm going to echo some of Dave's information. It's great advice!!!!!

"Choose according to character quality, competitiveness, honesty and your personal assessment, and you will set yourself up for the better experience and the better bottom line pricing!"

We are in the process of doing a re-fi on the house. Going from a 30 year to a 15 year. We went to our present bank, mortgage-savings-checking -etc. for over 20 years,and asked about their rates and costs. They were upfront and put everything on the table with one phone call. All the paperwork was in the mail the next day.

Being prudent, we made a couple of other calls to check rates, terms, costs & etc. No one else would give us the information over the phone. And we are talking banks here, not mortgage brokers. They wanted conference calls, rates depending on income variables, jobs & etc. They wouldn't even gives us rates over the phone because they could change based on circumstances, information and the like - so they said. We politely said thanks, but no thanks.

Our bank has been around for over 100 years. Their reputation is one of being financially conservative. They have strict income guidelines for loans. They did not subscribe to the mortgage insanity of the past few years. That being said, we trust them and they are honest.

Our lawyer said to us that our bank has a spotless reputation and is one of the most stable banks in our area. They are also the easiest to work with legally.

So if an institution gives your the run-a-round, just say "thanks, but no thanks." Keep shopping around.

Enjoy the journey.
eal51 in western CT

    Bookmark   January 21, 2009 at 12:25PM
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sparksals

eal.. what bank?

    Bookmark   February 1, 2009 at 11:02PM
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triciae

Dave & eal51,

I so agree with your comments.

I'd also like to add that, IMO, it's best to establish a good relationship with a bank prior to when you actually need them.

Sorta like the corner gas station...they may not always have the absolute rock bottom price but once they get to know you they'll always be there when your battery's dead or you've got a flat tire in your driveway. Same with a bank...establish a relationship & they'll do their best to meet your needs.

This is a lot easier to accomplish with your local bank. Turnover rates are high at the large institutions. At your local bank tellers, loan officers, service personnel, & management have likely been there for years & are likely to still be there next year.

Over the past 5-8 years people seem to have forgotten that banking is a personal relationship. It's not about (or shouldn't be) the lowest price. I have established a banking relationship that I can rely upon on a moment's notice. (And, no, it's not with DH's bank!) I can pick-up the phone, call my loan officer, & arrange financing over the phone in 5 minutes. Why? Because that loan officer knows ME & my situation. He's more than a "loan officer"...he's my BANKER.

Lose the Wal-mart mentality to financing & establish that relationship...just like you do at your local hardware store. What? You don't have a relationship at your local hardware store?! Ah, more Wal-mart mentality...

Ya know, it's hard for a loan officer to stick it to ya when they know they'll likely be standing in line behind you at Dunkin Donuts on Saturday morning or bump into you at the local grocery store...or, at school Parent's Night.

/tricia

    Bookmark   February 2, 2009 at 9:46AM
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dave_donhoff

Hi Tricia,

Ya know, it's hard for a loan officer to stick it to ya when they know they'll likely be standing in line behind you at Dunkin Donuts on Saturday morning or bump into you at the local grocery store...or, at school Parent's Night.

I'd selfishly like to add/amend to your quote;

Ya know, it's hard for a loan officer to stick it to ya when they eat/live/breathe as a non-anonymous publicly published financial advisor who knows he'll likely be roasted on a skewer, with many antagonists dogpiling on top, if he ever did anything that even came close to a shade of "gray."

Dave Donhoff
Leverage Planner

    Bookmark   February 2, 2009 at 12:35PM
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