General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRefinancing in Era of Trump
We have been trying to bring down expenses since September when my chances of a new job looked pretty slim. After cutting back and budgeting with a financial planner, we thought it best to bundle credit card debt and equity line of credit into our mortgage payment via a new loan. As time moved along we made an appointment for election day - 11/8. As it approached and various indicators had me really anxious, I knew we had to lock something in Nov. 8th. We did - at the interest rate of 3.5%.
But then the election results seemed to give the bank free rein to up the rate to 3.75 when the paperwork arrived two weeks later.
I have been on the loan officer's back ever since. He has found excuses to cancel appointments (illness, broken tooth) and at first said he would get it back to 3.5. Now claiming it was something called "cashout refi" with "add-ons" - which he says he hadn't realized was what we signed- we can only hope he can get it down to 3.62.
This cannot be normal. On 11/8 he was complaining about new regulations causing paperwork to seem endless. Now I wonder if the surprise election put them back in predator mode.
And what can we do about it?
progree
(10,901 posts)SleeplessinSoCal
(9,110 posts)Anybody? Bueller?
SleeplessinSoCal
(9,110 posts)God knows what new wrinkles will appear.
bhikkhu
(10,715 posts)I refinanced at 3% about three years ago, and found the whole process bewildering and unmanageable. Basically, I picked a credit union and trusted them, and didn't feel like I had any standing to question the myriad of fees or the end result. We started out expecting 2.75%, as I'd spent some time previous repairing credit, doing research and getting the whole financial side on solid footing, but when we were fully committed and the paperwork came through it was 3%. Why, I have no idea.
In any case, our refi folded my first and second mortgages into one 15 year note, and saved me $500 a month, plus a bundle in the long term, so I didn't really want to argue or risk it falling through. I don't see indications that interest rates are going anywhere but up, so I'd probably take it if I were in your shoes, but if you have a person to talk to and a little leeway timewise, maybe you'll do better than I did by asking questions. A point here or there doesn't sound like much, but in the long run it really does add up.
on edit - just remembering that one of my beefs with my original loan was that it was Chase, who'd screwed us with a credit card issue, held our mortgage also and declined to refinance. We went through a credit union deliberately to get away from them. Then three months after the refinance we got the notice the new mortgage had been sold to - Chase.
SleeplessinSoCal
(9,110 posts)We had our original mortgage with WaMu which Chase bought up. We moved it to Union Bank in 2009 to get away from them. So we were advised to bundle through the bank where we also have a small money market account. We also have a credit union. I was gonna try calling SAG to find out if they can advise us.
Thanks so much for your accounting of your experience. It appears that this is not so unusual. And that our timing has been off again. I'm hoping to save $400 a month.
I still think we are all in for horrible banking experiences going forward. Getting rid of red tape (Dodd-Frank) for them is not good news for us.
Hamlette
(15,411 posts)you can often buy down the interest rate by paying higher points but that might not be advantageous to you. Take the options home, use a calculator and find out what the total cost of the loan will be. Remember too that interest is tax deductible on your house so factor that into the interest/points computation.
Unfortunately, you can't trust your lending institution to do those calculations for you unless you insist. Check the closing costs too, they get put back into what you owe so it might not seem important but it can be.
I hate to pay interest so got pretty good at checking this stuff.
SleeplessinSoCal
(9,110 posts)Points eh? I am in way over my head. I was hoping the bank would be decent.
My hubby has Dementia and I'm flying solo. This was his area of expertise. And he'd been a NYC renter, as have I been. Trying to do this when money gets tight and you're getting old is truly stressful. We are going to be fending Predators off with sticks from here on.
Hamlette
(15,411 posts)depending on the size of your loan $3K might be okay. Ask where the closing costs go. Insurance and fees are can't be avoided and no, you don't have much choice about points. However, some lenders will lower the points but it is usually at the cost of the interest rate.
In all honesty, loans are cheap right now. Our first home loan was at 8% and when our friends bought homes a few years later it was up to 12%. And even then, think what credit cards and car loan interest is. Much higher than 4%. And remember the interest on a home loan is tax deductible for federal income taxes. So it makes the interest cost even lower depending on your tax bracket.
If there is anyway to make a higher payment, everything over the regular payment goes towards principle and you pay it off sooner.
Remember, I'm an interest nazi. Not exactly sure why, but I hate to pay interest. When we bought our first house, my aunt told me to never take a second mortgage. It stuck with me but it does make sense if you can get an overall lower interest rate.
When you apply for a loan, at some point you "lock" in an interest rate. If you locked, the lender has to give you that rate. But locking in the rate is a risk for both parties. You might lock in at 4% and it goes down to 3.5% the next day. Not all lenders are crooks. Or so they say