Quick refi question/rant
 

I'm looking at refinancing. I owe $127k on a house that's probably somewhere in the $225k value range. I'm currently @ 5.0%. My FICO is in the low 800's. The rates I'm seeing are anywhere from 3.0 to 3.875

I made the mistake of going to one of those sites where you put in your info and let the lenders "compete". Sweet jesus on a crispy biscuit, my phone has been ringing off the hook. Every new contact with one of these guys makes the situation 10x more confusing.

Anyway, my question is this: some places are quoting very low closing costs, in some cases less than $100. Others are quoting costs upwards of $3500. This is all for zero points. The super low quotes include a "rebate to help lower your closing costs" - how can the spread between the different companies be so huge?

I'm having a hard time separating the bullshyte from the caviar. I talk to lender "A" and he tells me closing costs are $3500 (no points); I tell him lender "B" quoted me $500 for the same rate, and he says lender "B" is FOS, won't close the loan, and will give my cat gonorrhea.

One guy said my loan was too small to worry about, and wished me a nice day.

One particular company, Quicken Loans, has been particularly aggressive: I keep getting new reps calling, claiming not to know that anyone from their company has every contacted me before. I was out of the office yesterday, and I came back to 5 voice mails, from 5 different people. While I was listening to my VM's, another one called. While talking to him, another one called. Crikey! They love to talk about JD Power ratings, and if I start the process right now, rates were going to rise and my spleen will burst with the fury of a thousand suns. Their closing costs were the highest I've been quoted by far, and there was more trash talkin' than a street basketball game in Compton.

I've done google searches on the reps of these various companies, and they all seem to be lepers. Some of the complaints and praises seem so formulaic that they were probably placed by bots.

So, what's the best way to sort through this stuff?

Change your phone number and just go to a local credit union...

I looked at my CU's numbers, and they're horrible compared to what I'm seeing out in the wild. The best they had was a 4.0 with $6400 in points and closing costs.

Smaller credit unions often do only finance their own ARMs and not the fixed rate mortgages. The fixed rate mortgages often go to an umbrella organization where loans are pooled.

That said, isn't it food for thought that a non-profit can give you 4% with considerable closing costs and the leaches over the phone can beat that all day long working at for profit outfits?

I'd still change my phone number and go see my CU. You will still save money and will deal with a brick and mortar place, not some guy in his underwear calling you from his home office who will sell time shares 2 weeks from now.

JMHO!

G

Take a breather............rest.............and contemplate.
The ball is in your court.

Those guys are all wolves looking for an easy dinner.
Do not be an easy meal.

5% is B.S., and they all know it.

The Fed has set interest rates at near 0% for many years.
They are frantically giving away taxpayer money left and right to support the USD.
"Prime" is the 2-3% which the banks get for paperwork "service" from that free money directly from the government.

Talk to agents with an extra witness,
Ask them to explain everything again, this time very very slowly,
Get their complete offer in writing so your side can review a 30-year life commitment,
Review carefully,
Consider outside opinion,
Then consider which company may have a solution which will fit your needs for the long term.

WB: We did a refi on our house about 2 months ago. The rates are a little lower now...

15 year for 3.125% with Wellsfargo. If we had waited it would be 2.875 now.

I played around with several brokers who started out with lower rates but then played around with type of loan (Texas has equity (you have pulled money out) and non-equity (original house mortgage or refi with no money pulled out).

I'd call the major banks (Wells, Chase, etc) and see what they can do.

You need to know
the originating fees
interest rate
points
expected other fees.

They should be able to send you a disclosure with all of the above.

most of the "No closing costs" mortgages have higher interest rates, or the closing costs are "no cash", meaning they are rolled into the loan.

You should PM Rick Lee, since he was in that line of work many years ago.

Just like you can buy a better rate by paying points, you can get a higher rate and a credit. That credit will go towards transaction costs.

Figure out what works for you, should be lots of options.

What Vincent Vega said.

It's all a combo of rate on the one side, v. points/fees/costs/length of loan on the other.

One way to make it easier to comparison shop is to get rates for a "no cost" 30 year fixed loan, i.e., one where there is no cost whatsoever.

You eliminate that side of the equation, and now can compare rates.

My friend just did one through Greenlight. His was a true "no cost" loan, he didn't pay a penny. I think he got 3.75% for a 30 year fixed. That seemed pretty good.

I'm not sure if the system has changed since the bailouts, but be careful with the credit applications. If you submit multiple credit applications, it will have a negative impact on your FICO.

Outside of hanging up on the companies that continue to call, just tell them you've already re-financed.

This is a myth, pushed by brokers so you won't shop around. As long as you are doing the credit application for the same thing, it will not affect your FICO score.

The banking laws may have changed but I think this used to be true.
I may have a credit rejection letter stating (this in writing) somewhere.

After h.s. I had my credit ruined by a couple delinquents I once roomed with.
Found out about this much later, when applying for a home loan.
I had 80-90% of loan in cash and a good paying job with no outstanding debt.
Paid rent 1st of the month(always).
Tried to build new credit to repair. Applied for Sears card, IAM ccard, Credit Union card, etc,
All rejected.
At least one of the rejections was for "too much activity".
Asked for free credit score as required. Denied.
Asked for credit complaint forms. TransUnion wanted me to send all types of personal documentation (edit-official copy of birth certificate!!!) in the mail, after having the same address, job, and bank account for 3-5 years.
Contacted originating credit reporting bureau. They said they fixed it, but lied.
Bad credit score followed me around for 11 years.

Pure economic slander by bankers.

Meanwhile, housing prices doubled and tripled.

This is the kind of stuff the Occupy Wall St, crowd was griping about, yet nobody took them seriously.

trust your calculator. no one else.

get a google voice phone #. Best thing I ever signed up for. You can forward it to your cell phone, and turn it on and off as you like. Has voicemail, calling id, etc. I use it when I sell things on Craigslist or for anything like you got going on, lots of calls from people I don't care about.

So, to close the loop on this, I just closed on my refi yesterday. 3.5% with 0 points on a 30-year. I was originally thinking about switching to a 15-year, but with the 30, I have a better cushion in case something hits the fan.

Pretty awesome rates...I assume you're gonna pay additional principle so you're paying it off in 15 (or less)?

That's the plan. I've been paying extra principal all along.

When I bought this house in 2000, my interest rate was 7.875%

Very similar story here - started at 7% ten years ago and now at 3.6. It is crazy how much of a difference it makes. More cash for race tires (just kidding...er...not really)!

I would have gone to a 15 or 20yr but have something else I want to pay-off first, and so cash flow is king right now.

Well done, flexibility is never a bad thing. Once rates you can dump $$ into a CD and come out ahead, no brainer.

If you make one extra P&I payment per year, it will knock the last seven years or 84 payments off your mortgage. That's some serious savings for very minimal monthly $$. I just wrote my check out minutes ago. We pay about $230 per month extra.