Refinancing Nightmare.....

[Mishetta]

A couple months ago, we decided to refinance since interest rates were so low. So we go through our bank, that we have our existing mortgage through. The interest rate was 5.50% & we had to pay an upfront $300 application fee. Okay...so we did. Closing costs were going to be anywhere from $900 to $1200 so we decided to incorporate that into our new 25 year loan. Lower interest rate, with a nearly $40 per month lower payment & not extending the life of our mortgage either.

The loan officer called us nearly 3 months later to let us know that we were ready to "close" on our new finance amount. We get there for the "closing" & she then proceeds to tell us of a new "deal" they are offering, which is for 4.74% interest. (Woo Hoo!) So we're listening. She continues to tell us that since our interest rate would be even lower, we can qualify for a 15 year loan for only $40 per month more & NO CLOSING FEES. This loan was completely FREE. (Of course, we lost our $300 application fee for the first loan we had applied for since it was non-refundable.) So, we thought about it. Trust me, $40 a month more would really be a struggle for us right now. When we thought about owning our home in 15 years, we figured, we'd better bite the bullet & somehow come up with the additional $40 per month more.

Yesterday in the mail we get some confirmation letter which approves us of the loan for 10 years at aproximately $230 more per month! HUH??? YIKES! So I tell my DH, "you'd better call the bank & tell them they made a mistake!" He calls them today & they said because of the loan amount we requested, they only offer that amount in a 10 year term. If we want the 15 year term, then we'll have to borrow an additional $3000 (which still brings our payment up $68 & if you remember, I'm saying that an additional $40 was already going to be truly s-t-r-e-t-c-h-i-n-g our budget!)

I'm so upset! I don't normally get mad over "things" in life but this one is really making my blood pressure soar! So, now to be able to afford that "new" 15 year loan, we'll have to cut out possibly after school activities for our DS? He was already cut down to one activity per season due to $$. Cut down on our church donation? We only eat out once per week at a family diner type place as our entertainment! I guess that would do it. There is not much room for cutbacks at this point in our lives. We have a Disney trip planned for this Christmas (we haven't had a vacation in 3 years), do we need to "postpone" this trip again?
This really makes me MAD! ARGGHHHHHH!!!!

Hopefully writing this out has made me calm down a bit (NOT)!

Thanks for listening!

 

[Dan Murphy]

Just offering you a {hug}, Rose. I would think if it was a loan officer of the bank you were dealing with, that they should be able to offer you what they agreed to earlier. I would talk with the bank president. Good luck.

 

[mrsv98]

Do you have a good faith letter with the original 15 year terms? I would call and speak to a supervisor and tell them you are going to re-fi somewhere else because of these shinanegans. Then I would call a mortgage broker and see what you can find. unfortunately for you, the rates have been going up fairly steadily in the last few weeks. I would be ticked off too!

 

[JAP]

mrsv98 gave you the best advice. Also, they should not have waited till the day you were to close on the 25 year mortgage to let you know about a better deal. Those details should have been worked out in advance.

Talk to a manager at the bank and shop around. Let the Broker's know up front how much you are willing to pay out. Also, try not to let them hit you with an originating fees or broker fees. The Broker will get paid regardless if they get this fee.

PM me if you want any other information.

 

[ckmommy]

I would look through all of your paper work and see if you have in writting the original quote of only $40 more per month on a 15 year loan. I would get a hold of someone more superior thatn the person you have benn dealing with. They should be able to resolve this situation! If they will not help you out, I would consider going with another bank.

 

[Mishetta]

It's too late to shop around since rates have been steadily rising since the week after we applied for the original 25 year loan. It's like we have no where to turn. We've already lost the $300 application fee also for the initial loan we applied for too. I feel like we're just going to have to "lick our wounds" & get on with life but this really ERKS me to no end!

I'd like to know, that if the loan officer wasn't aware of the minimum amount one had to borrow to qualify for a specific loan, could the bank eat the error & grant us the original loan term for the amount we wanted to borrow (which was $3000 less than what we are now deemed to borrow to qualify for the lower interest rate?) Anyone with bank or loan experience out there able to answer this one?

Not to mention, this "deal" sounded so good at first that I was trying to talk my dear friend into re-fianancing too (& no, there wasn't anything in it for me). They're more financially strapped than we are!

 

[Silky]

4.74% for 15 years is an EXCELLENT RATE!!!!. I'd borrow the extra $3,000. You could use it to pay the extra $28/month for over 100 months OR apply some of it to help your son with his school activities. Is he old enough to get a part-time job to help out?? Could either your husband or yourself take on some part-time work??

Good Luck,

 

[SilverLily]

The other posters gave some good advice. If it were me, I would insist on getting the original deal (25 year loan). If finances are that tight, I would not go with a 15 year loan. I know 25 years sounds so long to have a mortgage, but it is better to have a mortgage and then have extra money to save for retirement than to not be saving at all because you can barely make ends meet. Most financial experts will tell you that a mortgage is an acceptable debt to have. Later, if finances improve, you could always make an extra payment or two and that would shorten the life of the mortgage by paying down the principle. But that's just me...I would rather have a longer mortgage and be able to save money for the future/in case of serious illness/etc.

 

[Patch'sD]

Take extra $ 3000 and put in bank, This will give you about four years of extra payments at $ 68.00. Also please do the math on the interest your saving for the 15 years you won't be paying. In the long run your better off. Also 50% of that extra $ 68 will come off on your taxes. You could play with your Withholding allowance to compensate.

 

[Michelemouse]

You mentioned that to get the 15 year loan you would have to borrow $3,000 more, right? Couldn't you put that extra money into a savings account and draw off $68 per month? Even without interest it would give you nearly 4 years (44 months to be exact) of $68 payments. And then you wouldn't have to come up with any more money per month than you are paying now and your loan would be paid off that much sooner.

Just a thought.

 

[RUDisney]

If your bank is a community-sized bank, you should be able to talk to someone who is at a senior management level, if not the president of the bank. If you deal with a super-sized bank, there is likely no one who will listen to you.

There should be someone in the bank who will listen to you and perhaps be able to work out a better deal for you, or take you back to your original deal, at least.

There is always a way out of a bad situation in a bank... it just means that you have to talk to the right person who wants to do it for you.

 

[Mishetta]

In reply to RUDisney, this is a Mega-Super sized financial institution.

My DH was trying to calm me down this morning by telling us that we could just bank the $3000 & use that to pay the $28 additional difference in the new payment amount & by the time we use it all, hopefully he'll have more raises at work, etc...

In reply to Silkey ~ suggesting my DS gets a job to finance his own after school activities is impossible since he's only 8 y/o!

I had to quit my job over a year ago to take care of my cancer stricken Mother (& we weren't prepared for that abrupt end of 2nd income). We have a 21 month old (which my Mom would babysit while I worked) & my income would not offset daycare costs. Now Mom has gone to heaven so I've lost my babysitter
(not to mention, my best friend.)

My DH does grab all the overtime possible at work (when it's offered) but things are lean everywhere right now. Not to mention he has a 1 hour commute each way. Sooo.....for the time being your wonderful suggestion on a part time job won't work. But once my baby is in school, you'd better believe I'll try to market myself again.

I do realize that 4.74% is an excellent rate & I also (hope) know that our finances won't be this tight forever...based on hopeful raises at my DH's workplace but just for the next couple years it will seem like we're in waaaaay over our heads.

Thanks for the advice. I appreciate everyone's input.

 

[Silky]

Originally posted by Mishetta


My DH was trying to calm me down this morning by telling us that we could just bank the $3000 & use that to pay the $28 additional difference in the new payment amount & by the time we use it all, hopefully he'll have more raises at work, etc...

I totally agree with your husband.

LOL about your 8 year old.

We have a 6 year old who decided to sell some of his "drawings" on a transcontinental flight in June. He walked up and down the aisle asking ONE DOLLAR for each sheet.........and actually collected $10!!! ........

 

[RUDisney]

I thought of something else, that will put G-d's fear into even the ultra-largest of institutions. I would save this as my trump card for when you get no satisfaction from anyone.

You'll need to find out who your lender's boss is and work your way up the line. If you didn't get a GFE (good faith estimate) it is a violation of Regulation Z, or Reg Z, in banker's terms. Reg Z is the Truth in Lending regulation that requires banks to disclose all costs prior to your closing your loan. That is what the GFE is supposed to accomplish. Additionally, you should be provided with an APR, (Annual Percentage Rate) prior to closing your loan so that you can see what you will actually be paying in interest. This also takes into account the items on the GFE. You can threaten to turn them in to the federal regulators and then proceed to write a letter to the OCC (Office of the Comptroller of the Currency) and to the FDIC, both of these have web sites. Carbon copy the executive that you finally wind up with and cc: the president of the bank. Heck, if they are going to be jerks about this, you need to get nasty, too.

I'd be curious to see how they'd react once they know that you are going to go to their regulators about them.

 

[Mishetta]

Silky ~ you have an entrepeneur in the making! (Hopefully I spelled that right!)

RUDisney ~ I'm as fiesty as your last post sounded right now too!