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Old Jan 4, 2013, 02:47 PM   #1
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Join Date: Aug 2006
Location: Atlanta, GA
Mortgage Refinancing Stories

I'm currently in the process of a mortgage refinance, and am getting very frustrated with it. It's my first home (bought 7 years ago), and thus my first mortgage, and my first time to refinance. My mortgage has been sold twice in five years.

I am refinancing with the same mortgage company I have been with for the past several years. I thought that since I was staying with the same company, and simply looking to get a lower interest rate (currently at a whopping 7%), that it would be a fairly easy process. Also, they contacted me about doing the refinance.

However, it's now been almost six months since I first talked to them, and it seems like every week there's a new complication. They need this proof of income, they need that proof of taxes, they need this proof that I'm not actually employed but work as a freelancer. They need this form signed again, because it's now been so long that the original form has expired.

You would think that having to pay a little bit less to the same company wouldn't require a complete financial investigation, but apparently it does.

It's also going to cost several thousand dollars in closing costs, fees, etc. Talking to several other friends in the neighborhood, they got some great deals on their refinances. One was charged less than $50. Another was charged right around $1000.

Of note is that our house (and the ones of the friends above) is worth about 60% of its original mortgaged value, and well below what we still owe on it.

I'm just wondering if this sounds fairly normal, or if it seems really out of line. I called my bank to see what their deal was, and they said they wouldn't touch my mortgage with a ten foot pole, and that what I'm going through is fairly normal.
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Old Jan 4, 2013, 03:10 PM   #2
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Since you're posting in a public forum I assume you're willing to state whether you're doing a straight refi or a HARP refi? To me it sounds like a HARP refinance because your value is less than what it was when you borrowed 7 years ago. That said, I don't know who your mortgage company is, but the document collection process in many companies is absolutely hair-pulling. When one document is received they sometimes need another and by the time things are in order some document expired. I get it, believe me I do. 6 months is too long though and it should not be seen as customary.

If you're not doing a HARP refi then I sort of think you should be. The fees and costs associated with a standard refi will be somewhat high whereas with a HARP refi, I believe they're limited making a HARP refi much more beneficial to you. When looking to refi at all one needs to figure out how much it costs, how much they're saving, and when they'll really start to realize the savings. That is, after the savings each month exceeds whatever it cost to refi. I have never heard of a $50 refi; I have heard of a $50 fee for a loan modification but that is when the original terms are modified and no new money is lent.
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Old Jan 4, 2013, 04:38 PM   #3
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Don't know if this applies to the US, but in case it does.... In Canada we used a Mortgage Broker. They took a bunch of info from us, and then shopped all the various banks and lending institutions on our behalf. In about a week they presented us with 3 options - all of whom were offering rates that were substantially lower than advertized by the big banks.

Didn't cost us anything extra because the broker paid by the bank/lending institution when the loan is signed. We went with a non bank/credit-union lender and it worked out fine.

A good broker will also have lots of experience, and will guide you towards institutions that are likely to approve you. After all, they don't get paid until you get the loan.

I will caution you to read the contract before signing though. A mortgage is supposed to protect you as well as the lending institution. If there is a clause you aren't comfortable with, see if you can get it rewritten or go with another institution.

Good Luck with this.
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Old Jan 4, 2013, 04:47 PM   #4
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I just did a refinance on a home i bought 2.5 years ago.

The whole process took about a month. I ended up having Christmas in that time frame so it probably took a little longer because of that.

6 months is excessive and it should have been figured out by now.

I paid right around $1000 to have the refinance done and that was staying with the same bank I was with.
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Old Jan 4, 2013, 09:02 PM   #5
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My last refi (a few months ago) took only a month or so. I'd cut your losses and cancel the process and find a different lender
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Old Jan 5, 2013, 10:18 AM   #6
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I had a drawn out refinancing a few years ago. I think it took at least 6 months. It started over the phone, then they sent someone to my house with the papers to sign. Well, the terms were not what I agreed to. So the "closer" left, and I called back. Yeah, I was right, yada, yada, yada. They sent the same person back, but there were more mistakes. Time to do the same dance.

Well, by the time they got things straightened out, an interest payment was due. I said it wasn't my fault, so they paid it. We had been paying on the "old" loan while this all was in limbo, but stopped payment when things got settled. The third time it was a different person who came. I'm not sure if the first person refused to come back or what. But things had finally been corrected, and we saved $300 a month on our payment.
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Old Jan 6, 2013, 05:46 AM   #7
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My wife and refinanced our house for the second time in ten years a few months ago. As expected, we had to provide proof of income, including tax returns, and similar documentation, but that didn't take very long.

We folded closing costs into the loan. The hardest part was signing/initialing all the paperwork at closing, which took about 30 minutes.

I can see where it might take longer in cases like the OP's, but six months is excessive.
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Old Jan 6, 2013, 06:44 AM   #8
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One issue with a long and drawn out refi is that your interest lock expires. For me that would be enough to walk away. If the company cannot efficiently process a loan application I have serious concerns about their ability to manage it and provide customer support.
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Old Jan 6, 2013, 07:18 AM   #9
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Join Date: Aug 2006
Location: Atlanta, GA
Thanks for the info everyone. I'm definitely going to try to call them tomorrow and find out what the heck is going on. Every call I get from the "processors" is like talking to Consuela on Family Guy. They can barely form an English sentence, yet they are American (well they don't have foreign accents at least). I already tried to cancel the process once after six weeks or so, and the fast-talking main guy convinced me to hold on. I should have stuck to my guns, especially after he said "I've got 140 loans in process right now, I can't spend all my time on yours," or something to that effect. It's now time to put up or shut up.

Maflynn...you said it: if they can't figure it out in six months, they probably aren't going to.
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