Refinance Mega Thread

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InvestDoc
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Re: Refinance Mega Thread

Post by InvestDoc »

postal007 wrote: Wed Sep 23, 2020 9:03 am
mega317 wrote: Tue Sep 22, 2020 11:43 pm Update from me on my experience with Owning.
8/30 apply online, phone call within an hour.
9/1 lock
9/9 a few phone calls asking for documentation, underwriters don't like something.
9/10 sign closing docs. I know at this time that I'm not through underwriting. Don't send any cash.
9/14 and 15 underwriters still aren't happy, and apparently the processor stinks, on the phone with LO for a while trying to sort it out.
9/16 told verbally that we're good to go, given another estimated closing statement and asked to wire funds.
9/22 today the loan funded and sent final closing statement.

Someone owes me over $1000 in extra interest paid on both ends (prepaids were from 9/14 and the estimated payoff amount went into October) and I'm not thrilled about how they close before underwriting, but hey I just dropped my rate by 0.5% no-cost in 3 weeks.
I’m on a similar timeline to you (applied 8/31, locked 9/2 on match to IM) and haven’t funded yet. I wonder if some of this is because owning still hasn’t found buyers for their loans? I talked to the processor yesterday - he’s been super responsive and my file has been complete since Friday and he said the company was waiting on “market conditions” and the loan should fund by Thursday. So not sure what they means, maybe they’re waiting for a better buyer to come along?
I got a similar answer while waiting for mine to fund, so I wonder if they were trying to offload old loans before opening new ones.
nic3456
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Re: Refinance Mega Thread

Post by nic3456 »

z1_gravedigger wrote: Tue Sep 22, 2020 12:19 pm Seems being so far out of the sweet spot is really hurting us. 25YR remaining/$108k at 3.99% in Ohio. Anything no-cost is being quoted 4% or higher.

I do have reasonable 15YR options with our credit union. Excluding escrow:
2.5% for $3319
2.25% for $3866

Possibility for $485 appraisal waiver.

Keep hunting, or is this just the way it is for low-100k refi’s?

Thanks!
Have you checked with Third Federal?
gurusw
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Re: Refinance Mega Thread

Post by gurusw »

bgh11 wrote: Wed Sep 23, 2020 1:04 am
gurusw wrote: Tue Sep 22, 2020 10:50 pm Just posting my experience for the benefit of others. I had jumbo mortgage at 4.125%, and no one was giving me refinance rates. I decided to pay 100k+ to get super conforming loan. My quotes on Aug 7 were ...

- Quicken Loan 2.75 (LTV 75, 6 month clawback)
- Owning 2.99 (LTV 70)
- Zillow 3.125
- Loan Depot 3.25
- Amerisave 3.375
- BofA 3.375 (LTV 70)
- Aimloan 3.5

I went with Quicken, and closed on Sep 8. Very happy with the process. Hopefully this info helps someone.
Is there an official name for the legal document that tells borrower about the 6 month clawback? Or is it just a sentence hidden in one of the many signed forms?
The loan officer had told me about the clawback rule when I had asked about prepayment penalties in the first call when I got the quote (there are no prepayment penalties). But I could never find the rule in the docs. Maybe I should call him & ask him.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

InvestDoc wrote: Wed Sep 23, 2020 9:52 am I got a similar answer while waiting for mine to fund, so I wonder if they were trying to offload old loans before opening new ones.
That is a real possibility. If they are having trouble finding investors to buy the loans they've already originated, they may not have the cash available to fund the new loan and "market conditions" improving to fund your loan isn't because of finding an investor for your loan, but for one to free up the cash to then originate/fund your loan. If that is indeed the cash, then Owning is playing right on the razor's edge.
Johny
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Re: Refinance Mega Thread

Post by Johny »

For Owning, can you refuse to sign closing docs until it's out of underwriting and approved to close?
mega317
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Re: Refinance Mega Thread

Post by mega317 »

^I assume yes. They obviously can't make you sign anything, and they want your business. The issue for me is that my lock would have expired.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
InvestDoc
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Re: Refinance Mega Thread

Post by InvestDoc »

Johny wrote: Wed Sep 23, 2020 1:03 pm For Owning, can you refuse to sign closing docs until it's out of underwriting and approved to close?
The problem is that they offer such a short rate lock (I think mine was only 2 weeks) and they had to get approval to extend it by one day so I could sign the closing documents. You probably could refuse to sign but then would be subject to the rate at the time of closing.
blues008
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Re: Refinance Mega Thread

Post by blues008 »

Does Owning let you keep an existing HELOC? Or would it have to be closed?
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batpot
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Re: Refinance Mega Thread

Post by batpot »

Looks like rates dropped again.

Looking at a 2.5% 30 year with $1k in closing after lender credit.
Best I've been able to catch.
Last edited by batpot on Wed Sep 23, 2020 2:12 pm, edited 1 time in total.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

I have to say, even with all the issues some folks have had with Better, I am most impressed by them. I received the following email today:
Better Mortgage’s email wrote: Hi Brandon,
As you may know, the Federal Housing Finance Agency recently introduced a surprise 0.5% fee on mortgage refinances which was applied to your total loan amount.* Due in large part to pushback from industry leaders like us, the FHFA has postponed the fee until December 2020.

Because the fee is no longer applicable to your pending loan with Better Mortgage, we’ll be sending you a $747.29 refund — 0.5% of your total loan amount after your loan funds. You can expect to receive a check by mail within 10-14 business days to the mailing address we have on file.

No further action is needed on your end, but if you have any questions regarding the fee or the status of your loan, I’m here to help. Just reply to this email or give me a call at...
Many lenders would just be pocketing any pricing improvements/the negative pricing that had been built-in their offer.

Mind you, my loan doesn’t even close until Friday!
Johny
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Re: Refinance Mega Thread

Post by Johny »

Does that mean the fee was built into your loan? Say I applied with Better in early September when the fee wasn't in play...I wouldn't get a refund or maybe I would?

BrandonBogle wrote: Wed Sep 23, 2020 2:11 pm I have to say, even with all the issues some folks have had with Better, I am most impressed by them. I received the following email today:
Better Mortgage’s email wrote: Hi Brandon,
As you may know, the Federal Housing Finance Agency recently introduced a surprise 0.5% fee on mortgage refinances which was applied to your total loan amount.* Due in large part to pushback from industry leaders like us, the FHFA has postponed the fee until December 2020.

Because the fee is no longer applicable to your pending loan with Better Mortgage, we’ll be sending you a $747.29 refund — 0.5% of your total loan amount after your loan funds. You can expect to receive a check by mail within 10-14 business days to the mailing address we have on file.

No further action is needed on your end, but if you have any questions regarding the fee or the status of your loan, I’m here to help. Just reply to this email or give me a call at...
Many lenders would just be pocketing any pricing improvements/the negative pricing that had been built-in their offer.

Mind you, my loan doesn’t even close until Friday!
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Johny wrote: Wed Sep 23, 2020 2:26 pm Does that mean the fee was built into your loan? Say I applied with Better in early September when the fee wasn't in play...I wouldn't get a refund or maybe I would?

BrandonBogle wrote: Wed Sep 23, 2020 2:11 pm I have to say, even with all the issues some folks have had with Better, I am most impressed by them. I received the following email today:
Better Mortgage’s email wrote: Hi Brandon,
As you may know, the Federal Housing Finance Agency recently introduced a surprise 0.5% fee on mortgage refinances which was applied to your total loan amount.* Due in large part to pushback from industry leaders like us, the FHFA has postponed the fee until December 2020.

Because the fee is no longer applicable to your pending loan with Better Mortgage, we’ll be sending you a $747.29 refund — 0.5% of your total loan amount after your loan funds. You can expect to receive a check by mail within 10-14 business days to the mailing address we have on file.

No further action is needed on your end, but if you have any questions regarding the fee or the status of your loan, I’m here to help. Just reply to this email or give me a call at...
Many lenders would just be pocketing any pricing improvements/the negative pricing that had been built-in their offer.

Mind you, my loan doesn’t even close until Friday!
The asterisk in the email has this in the fine print:
Better Mortgage’s fine print wrote: *The fee was initially applicable only to funded loans delivered to Fannie Mae and Freddie Mac after September 1, 2020.
This leads me to believe it was included in the pricing of my loan. I don’t know if this email was triggered simply because I’m about to close (and my final closing disclosures are being prepared), or if this is a more systematic thing for everyone with active apps.

I did apply for my loan before the rule change, but locked after the rule change (I think, when was the date the fee date changed?).
beachairs
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Re: Refinance Mega Thread

Post by beachairs »

BrandonBogle wrote: Wed Sep 23, 2020 2:32 pm
Johny wrote: Wed Sep 23, 2020 2:26 pm Does that mean the fee was built into your loan? Say I applied with Better in early September when the fee wasn't in play...I wouldn't get a refund or maybe I would?

BrandonBogle wrote: Wed Sep 23, 2020 2:11 pm I have to say, even with all the issues some folks have had with Better, I am most impressed by them. I received the following email today:
Better Mortgage’s email wrote: Hi Brandon,
As you may know, the Federal Housing Finance Agency recently introduced a surprise 0.5% fee on mortgage refinances which was applied to your total loan amount.* Due in large part to pushback from industry leaders like us, the FHFA has postponed the fee until December 2020.

Because the fee is no longer applicable to your pending loan with Better Mortgage, we’ll be sending you a $747.29 refund — 0.5% of your total loan amount after your loan funds. You can expect to receive a check by mail within 10-14 business days to the mailing address we have on file.

No further action is needed on your end, but if you have any questions regarding the fee or the status of your loan, I’m here to help. Just reply to this email or give me a call at...
Many lenders would just be pocketing any pricing improvements/the negative pricing that had been built-in their offer.

Mind you, my loan doesn’t even close until Friday!
The asterisk in the email has this in the fine print:
Better Mortgage’s fine print wrote: *The fee was initially applicable only to funded loans delivered to Fannie Mae and Freddie Mac after September 1, 2020.
This leads me to believe it was included in the pricing of my loan. I don’t know if this email was triggered simply because I’m about to close (and my final closing disclosures are being prepared), or if this is a more systematic thing for everyone with active apps.

I did apply for my loan before the rule change, but locked after the rule change (I think, when was the date the fee date changed?).
We closed with Better around Sept 10 and also received this email today.
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

BrandonBogle wrote: Wed Sep 23, 2020 2:11 pm I have to say, even with all the issues some folks have had with Better, I am most impressed by them. I received the following email today:
Better Mortgage’s email wrote: Hi Brandon,
As you may know, the Federal Housing Finance Agency recently introduced a surprise 0.5% fee on mortgage refinances which was applied to your total loan amount.* Due in large part to pushback from industry leaders like us, the FHFA has postponed the fee until December 2020.

Because the fee is no longer applicable to your pending loan with Better Mortgage, we’ll be sending you a $747.29 refund — 0.5% of your total loan amount after your loan funds. You can expect to receive a check by mail within 10-14 business days to the mailing address we have on file.

No further action is needed on your end, but if you have any questions regarding the fee or the status of your loan, I’m here to help. Just reply to this email or give me a call at...
Many lenders would just be pocketing any pricing improvements/the negative pricing that had been built-in their offer.

Mind you, my loan doesn’t even close until Friday!
And you'll reward them by refinancing out of that loan a few weeks later! :D :wink:
Last edited by Goal33 on Wed Sep 23, 2020 3:32 pm, edited 1 time in total.
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

Thank you all for the help on this tread. I posted this in the LenderFi thread too just to provide a data point:

7 weeks App to Funding. They told me it would be 3 weeks, so the additional 4 weeks was frustrating for me and cost me around $500 based on my old interest rate vs. my new locked interest rate. Also, I had to pay for a lender payoff statement twice. This cost me an extra $30. The reason I went with them is because I was thrilled that they made a nice offer upfront and I didn’t want to play games over price matching for a few bucks with other places.

2.5%, Lender Credit ~$1500 (no cost), No escrow, CA super conforming. 77% LTV

8/4 - Apply, Talk to LO, locked rate verbally, LE with unlocked rate provided, documents uploaded
8/5 - LE with locked rate provided
8/7 - Moved to processing
8/17 - Moved to underwriting
8/21 - Asked for more documentation. In my opinion, these documents should have been identified as needed upfront, and we could have avoided a lot of wasted time.
9/2 - Rate lock expired, and by this point I lost faith in their ability to execute. I never saw anything official about extending but they honored my initial terms in the end.
9/11 - Pre-Closing Disclosure Provided
9/16 - Final Closing Disclosure. I asked for final title packet and was provided that immediately.
9/17 - Closing, Signing with notary
9/22 - Disbursement of funds, pay off of old lender happened that same day. At the end, they were able to execute, and I’d use them again, but the initial 3-week underestimate and the basically non-progress from 8/21 to 9/11 was stressful and frustrating.
Last edited by Goal33 on Wed Sep 23, 2020 3:33 pm, edited 1 time in total.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Goal33 wrote: Wed Sep 23, 2020 3:30 pm And you'll reward by refinancing out of that loan a few weeks later! :D :wink:
Lol. Not this time. After three refis and $10k in profit, I’m good. I’ll add another $1k to that and my solar install will be paid for!
b2bserver
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Re: Refinance Mega Thread

Post by b2bserver »

Any advice on escrow or no escrow when there's a discount for having escrow ($300 on $300k loan)? Obviously the escrow discount dollar threshold is a personal preference but not sure if it's better to pay the cost now or save a bit and hope the servicer will let me remove escrow for free in the future.

I did call The Money Source, who servicing Better, but since I don't have an active loan with them, they can't tell me anything.
tommy85
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Re: Refinance Mega Thread

Post by tommy85 »

I have 2 identical LEs from LenderFI and Better (2.875%, no closing cost, 30 yr fixed, LTV 60%, loan balance 156K). Better said the LenderFi offer is competitive and they cannot beat it. Better is asking for appraisal fees ($550) as deposit which i will get it refunded at the time of closing but LF is not asking for any deposit. If you were in my shoes, who would you choose? I ask because I see several people experiencing delays with LF and slightly hesitant to go with better because of the deposit (I just dont want to get stuck with them).

Thanks in advance
Mr. Market is Bipolar.
presto987
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Re: Refinance Mega Thread

Post by presto987 »

tommy85 wrote: Wed Sep 23, 2020 4:43 pm I have 2 identical LEs from LenderFI and Better (2.875%, no closing cost, 30 yr fixed, LTV 60%, loan balance 156K). Better said the LenderFi offer is competitive and they cannot beat it. Better is asking for appraisal fees ($550) as deposit which i will get it refunded at the time of closing but LF is not asking for any deposit. If you were in my shoes, who would you choose? I ask because I see several people experiencing delays with LF and slightly hesitant to go with better because of the deposit (I just dont want to get stuck with them).

Thanks in advance
I would go with Better. When I refi'd with them, I had no issue getting my deposit back. Other factors:
- You may be able to save around $200 on title costs by getting a quote from Radian and having Better price match it
- For me the process was fast, and the experience was smooth.
- If you get a better offer after you're already in process with Better, there is a good chance they will match it. I am pretty sure LenderFi would not. In fact, if you lock now with Better, you could try asking your Processing Expert to beat the LenderFi LE. Even if your Mortgage Expert said no, I've read that sometimes the Processing Expert will say yes.
1andDone
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Re: Refinance Mega Thread

Post by 1andDone »

Refinanced with Better in early July and on schedule to close on another refi with Better shortly. They just informed me that if we close before late November we would have to pay an early payout fee. Has anyone who has done back-to-back refis with Better encountered this issue?
Goal33
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Re: Refinance Mega Thread

Post by Goal33 »

1andDone wrote: Wed Sep 23, 2020 5:31 pm Refinanced with Better in early July and on schedule to close on another refi with Better shortly. They just informed me that if we close before late November we would have to pay an early payout fee. Has anyone who has done back-to-back refis with Better encountered this issue?
Will they honor the rate for you until then? I am reading about this situation on slickdeals right now, but maybe that's you posting over there :D
presto987
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Re: Refinance Mega Thread

Post by presto987 »

1andDone wrote: Wed Sep 23, 2020 5:31 pm Refinanced with Better in early July and on schedule to close on another refi with Better shortly. They just informed me that if we close before late November we would have to pay an early payout fee. Has anyone who has done back-to-back refis with Better encountered this issue?
How much is the fee? Is it tied to your loan amount? Or a flat fee?
1andDone
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Re: Refinance Mega Thread

Post by 1andDone »

Goal33 wrote: Wed Sep 23, 2020 5:35 pm
1andDone wrote: Wed Sep 23, 2020 5:31 pm Refinanced with Better in early July and on schedule to close on another refi with Better shortly. They just informed me that if we close before late November we would have to pay an early payout fee. Has anyone who has done back-to-back refis with Better encountered this issue?
Will they honor the rate for you until then? I am reading about this situation on slickdeals right now, but maybe that's you posting over there :D
Not me, but I guess that means that this is probably something new that they are instituting. I sent a response asking for more details about the fee, but I have not yet heard back from my closing coordinator.
1andDone
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Re: Refinance Mega Thread

Post by 1andDone »

presto987 wrote: Wed Sep 23, 2020 5:40 pm
1andDone wrote: Wed Sep 23, 2020 5:31 pm Refinanced with Better in early July and on schedule to close on another refi with Better shortly. They just informed me that if we close before late November we would have to pay an early payout fee. Has anyone who has done back-to-back refis with Better encountered this issue?
How much is the fee? Is it tied to your loan amount? Or a flat fee?
No details were provided in the email. My rate lock expires late November, so hopefully the closing will happen before expiration. Seems pretty late in the game to change the rules...
tommy85
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Re: Refinance Mega Thread

Post by tommy85 »

presto987 wrote: Wed Sep 23, 2020 5:15 pm
tommy85 wrote: Wed Sep 23, 2020 4:43 pm I have 2 identical LEs from LenderFI and Better (2.875%, no closing cost, 30 yr fixed, LTV 60%, loan balance 156K). Better said the LenderFi offer is competitive and they cannot beat it. Better is asking for appraisal fees ($550) as deposit which i will get it refunded at the time of closing but LF is not asking for any deposit. If you were in my shoes, who would you choose? I ask because I see several people experiencing delays with LF and slightly hesitant to go with better because of the deposit (I just dont want to get stuck with them).

Thanks in advance
I would go with Better. When I refi'd with them, I had no issue getting my deposit back. Other factors:
- You may be able to save around $200 on title costs by getting a quote from Radian and having Better price match it
- For me the process was fast, and the experience was smooth.
- If you get a better offer after you're already in process with Better, there is a good chance they will match it. I am pretty sure LenderFi would not. In fact, if you lock now with Better, you could try asking your Processing Expert to beat the LenderFi LE. Even if your Mortgage Expert said no, I've read that sometimes the Processing Expert will say yes.
Thanks!
Mr. Market is Bipolar.
Janus887
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Re: Refinance Mega Thread

Post by Janus887 »

tommy85 wrote: Wed Sep 23, 2020 4:43 pm I have 2 identical LEs from LenderFI and Better (2.875%, no closing cost, 30 yr fixed, LTV 60%, loan balance 156K). Better said the LenderFi offer is competitive and they cannot beat it. Better is asking for appraisal fees ($550) as deposit which i will get it refunded at the time of closing but LF is not asking for any deposit. If you were in my shoes, who would you choose? I ask because I see several people experiencing delays with LF and slightly hesitant to go with better because of the deposit (I just dont want to get stuck with them).

Thanks in advance
Well, I think I'm pretty much throwing in the towel with the idea of refinancing at this point. I have a similar sized loan to tommy85 here (135k vs. his 156k) and I cannot even get close to a LE with no closing costs. In fact, the very same lender mentioned here (Better) just quoted me $9900 in closing costs!

There is something very wrong with this industry. I've never encountered any other business with such absurd and arbitrary pricing discrepancies. Extremely shady.
tommy85
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Re: Refinance Mega Thread

Post by tommy85 »

Janus887 wrote: Wed Sep 23, 2020 6:52 pm
tommy85 wrote: Wed Sep 23, 2020 4:43 pm I have 2 identical LEs from LenderFI and Better (2.875%, no closing cost, 30 yr fixed, LTV 60%, loan balance 156K). Better said the LenderFi offer is competitive and they cannot beat it. Better is asking for appraisal fees ($550) as deposit which i will get it refunded at the time of closing but LF is not asking for any deposit. If you were in my shoes, who would you choose? I ask because I see several people experiencing delays with LF and slightly hesitant to go with better because of the deposit (I just dont want to get stuck with them).

Thanks in advance
Well, I think I'm pretty much throwing in the towel with the idea of refinancing at this point. I have a similar sized loan to tommy85 here (135k vs. his 156k) and I cannot even get close to a LE with no closing costs. In fact, the very same lender mentioned here (Better) just quoted me $9900 in closing costs!

There is something very wrong with this industry. I've never encountered any other business with such absurd and arbitrary pricing discrepancies. Extremely shady.
That's crazy. I hope there was some error. My friend is trying to refinance and just got rate today at 2.5% 15 yr fixed, no closing cost with Lenderfi
Mr. Market is Bipolar.
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BrandonBogle
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Re: Refinance Mega Thread

Post by BrandonBogle »

Janus887 wrote: Wed Sep 23, 2020 6:52 pm Well, I think I'm pretty much throwing in the towel with the idea of refinancing at this point. I have a similar sized loan to tommy85 here (135k vs. his 156k) and I cannot even get close to a LE with no closing costs. In fact, the very same lender mentioned here (Better) just quoted me $9900 in closing costs!

There is something very wrong with this industry. I've never encountered any other business with such absurd and arbitrary pricing discrepancies. Extremely shady.
To get prime pricing on a refi, you have to hustle and do the legwork. Just applying one-off to a lender or two won't get you the best pricing.
need403bhelp
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Re: Refinance Mega Thread

Post by need403bhelp »

presto987 wrote: Wed Sep 23, 2020 5:15 pm - If you get a better offer after you're already in process with Better, there is a good chance they will match it. I am pretty sure LenderFi would not. In fact, if you lock now with Better, you could try asking your Processing Expert to beat the LenderFi LE. Even if your Mortgage Expert said no, I've read that sometimes the Processing Expert will say yes.
I was trying to get better.com to play along with my second refi in row. Had a hard time getting them to even get the rate I'm trying to match on rate sheet, but was finally able to get it on weekend when LO was out (they said they couldn't match competitor LE but left improved rates up which I locked).

Since then, despite two competitor LEs dated within 1 business day, my Loan Processor & team won't budge even just by a $1, telling me I should consider going with the other lenders who are supplying those LEs.

Not sure if I just got unlucky this time around...
Familyman2012
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Re: Refinance Mega Thread

Post by Familyman2012 »

BrandonBogle wrote: Wed Sep 23, 2020 7:10 pm
Janus887 wrote: Wed Sep 23, 2020 6:52 pm Well, I think I'm pretty much throwing in the towel with the idea of refinancing at this point. I have a similar sized loan to tommy85 here (135k vs. his 156k) and I cannot even get close to a LE with no closing costs. In fact, the very same lender mentioned here (Better) just quoted me $9900 in closing costs!

There is something very wrong with this industry. I've never encountered any other business with such absurd and arbitrary pricing discrepancies. Extremely shady.
To get prime pricing on a refi, you have to hustle and do the legwork. Just applying one-off to a lender or two won't get you the best pricing.
Agree with BB. On my 2nd refi. I applied to 5 different lenders. But locked with 3 lenders at the same time and had them bid all against each other until i felt stratified with the final result.
InvestDoc
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Re: Refinance Mega Thread

Post by InvestDoc »

blues008 wrote: Wed Sep 23, 2020 1:51 pm Does Owning let you keep an existing HELOC? Or would it have to be closed?
They made me close mine (it was taken care of at the time of closing, I didn’t need to do anything prior to applying).
Qw1221wq
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Re: Refinance Mega Thread

Post by Qw1221wq »

Can someone explain the cash to close section for a refinance?

Loan amount = $500,000
Total closing costs (J) = $3000
Estimated total payoffs and payments = -$502,000
Estimate cash to close TO borrower = $1000

If my current mortgage statement has a up to date payoff balance of $495,000 (since I've been making payments waiting for the refinance to close), will I receive $7,000 ($502,000-$495,000) as a refund from my current lender?

Will my new loan with the new lender start at $500,000 or $502,000?
isubrama
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Re: Refinance Mega Thread

Post by isubrama »

Qw1221wq wrote: Wed Sep 23, 2020 11:07 pm Can someone explain the cash to close section for a refinance?

Loan amount = $500,000
Total closing costs (J) = $3000
Estimated total payoffs and payments = -$502,000
Estimate cash to close TO borrower = $1000

If my current mortgage statement has a up to date payoff balance of $495,000 (since I've been making payments waiting for the refinance to close), will I receive $7,000 ($502,000-$495,000) as a refund from my current lender?

Will my new loan with the new lender start at $500,000 or $502,000?
Your refund (cash to close to borrower) would be:
Loan amount - (total payoff + total closing costs)

Assuming your prepaid is included in the closing cost,
Refund = 500,000 - (495,000 + 3000) = $2,000. You will get the check for this amount.

Your loan would start at the new lender at $500,000.
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Re: Refinance Mega Thread

Post by zrzhu111 »

How soon someone from Loan Depot will contact me after I filled out the application online? I did it on 9/22 evening, but haven't heard anything yet.
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Post by mega317 »

^It was 2 weeks for me.
https://www.bogleheads.org/forum/viewtopic.php?t=6212
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Re: Refinance Mega Thread

Post by zrzhu111 »

Should I do CEMA with Better if the rates are comparable with other lenders? Based on the reading, it seems CEMA will take about 75 days to close. In NY, the transfer tax is about 10k. Not sure if it's worth it.

I looked at Better's LE, it seems i will still need to pay for about $5k of transfer tax with CEMA. Is that correct? I thought If I do CEMA application, the transfer tax will be zero.
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Re: Refinance Mega Thread

Post by Qw1221wq »

isubrama wrote: Wed Sep 23, 2020 11:28 pm
Qw1221wq wrote: Wed Sep 23, 2020 11:07 pm Can someone explain the cash to close section for a refinance?

Loan amount = $500,000
Total closing costs (J) = $3000
Estimated total payoffs and payments = -$502,000
Estimate cash to close TO borrower = $1000

If my current mortgage statement has a up to date payoff balance of $495,000 (since I've been making payments waiting for the refinance to close), will I receive $7,000 ($502,000-$495,000) as a refund from my current lender?

Will my new loan with the new lender start at $500,000 or $502,000?
Your refund (cash to close to borrower) would be:
Loan amount - (total payoff + total closing costs)

Assuming your prepaid is included in the closing cost,
Refund = 500,000 - (495,000 + 3000) = $2,000. You will get the check for this amount.

Your loan would start at the new lender at $500,000.
The way I see it is the loan amount and the closing costs are the amount the new lender is giving me. J is actually negative but they turn it positive in the cash to close summary because they are giving it to me. In total, I will receive a check for $1000 for the refinance from the new lender.

Estimated total payoffs and payments = -$502,000 is also referred to as K. K is the amount they are sending to the current lender. Once the current lender receives K, the current lender will also refund me the amount overpaid ($502,000 - $495,000 = $7000).

Since the new lender gave me the loan amount of $500,000, that will be my new loan that I owe the new lender. Is this all correct? It is confusing how they lay it out in the cash to close summary.
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Post by mega317 »

How are closing costs a positive number? Did you get a mega credit? That doesn't seem right.
Also is this an estimate or final? They aren't going to send 502k to your lender if you owe 495.

What you might end up with is
Loan amount 500k
J 3000
K - 495k
Cash to close 8k to borrower but 5 of that is borrowed money since your new loan is larger than the old.

But please clarify what is going into J
https://www.bogleheads.org/forum/viewtopic.php?t=6212
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Qw1221wq wrote: Thu Sep 24, 2020 1:06 am The way I see it is the loan amount and the closing costs are the amount the new lender is giving me. J is actually negative but they turn it positive in the cash to close summary because they are giving it to me. In total, I will receive a check for $1000 for the refinance from the new lender.

Estimated total payoffs and payments = -$502,000 is also referred to as K. K is the amount they are sending to the current lender. Once the current lender receives K, the current lender will also refund me the amount overpaid ($502,000 - $495,000 = $7000).

Since the new lender gave me the loan amount of $500,000, that will be my new loan that I owe the new lender. Is this all correct? It is confusing how they lay it out in the cash to close summary.
You have a correct understanding. Your new loan is $500k even. The new lender is sending a $502k payoff to the old lender (the old lender will send you, directly, any overpayment in 2-3 weeks). Since you are getting a large lender credit, the new loan’s $502k outflow is reduced to $499k. Since the loan amount is $500k, that remaining $1k is being paid to you directly.

Another way to look at it
$502,000 paid out
$ -3,000 closing cost
- - - - - - - - - - - - - - -
$499,000 paid out

$ 500,000 funded
$-499,000 paid out
$ -1,000 disbursed to borrower
- - - - - - - - - - - - - - -
$0 unaccounted for
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Post by BrandonBogle »

mega317 wrote: Thu Sep 24, 2020 1:15 am How are closing costs a positive number? Did you get a mega credit? That doesn't seem right.
Also is this an estimate or final? They aren't going to send 502k to your lender if you owe 495.

What you might end up with is
Loan amount 500k
J 3000
K - 495k
Cash to close 8k to borrower but 5 of that is borrowed money since your new loan is larger than the old.

But please clarify what is going into J
While what you have outlined could be the case, it is entirely possible that A - G costs minus lender credits in J results in a total of -$3,000 for J. Thus, it would be listed as a positive number in the cash-to-close section. Also, while the borrower may have a payoff number of $495k, we don’t know what the new lender got as the payoff during processing. For all we know, they got the number back in August and the Sept payment isn’t accounted for.
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Re: Refinance Mega Thread

Post by schwank »

zrzhu111 wrote: Wed Sep 23, 2020 11:43 pm How soon someone from Loan Depot will contact me after I filled out the application online? I did it on 9/22 evening, but haven't heard anything yet.
It took like 2 hours for me, I filled it out on 8/17 and was locked that afternoon. I'm signing docs this evening on a 15@2.375 with nothing due at signing and 750 escrow credit.
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Post by zrzhu111 »

mega317 wrote: Wed Sep 23, 2020 11:46 pm ^It was 2 weeks for me.
Thanks. I guess if we call the number, it will not help either.
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Post by zrzhu111 »

schwank wrote: Thu Sep 24, 2020 10:57 am
zrzhu111 wrote: Wed Sep 23, 2020 11:43 pm How soon someone from Loan Depot will contact me after I filled out the application online? I did it on 9/22 evening, but haven't heard anything yet.
It took like 2 hours for me, I filled it out on 8/17 and was locked that afternoon. I'm signing docs this evening on a 15@2.375 with nothing due at signing and 750 escrow credit.
ok. Thanks. I guess I'll call the number to see if someone will answer.
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Post by 3of10 »

Nappyloxs wrote: Mon Sep 21, 2020 8:33 pm Please help. Might close this week.

Cashout refi at $575k (high limit city). About 200k out for remodeling at about 75% LTV. House appraised for $745k

2.875% at 2+ points. Total closing costs are about $20k.

Lender screwed up LO screwed up twice, so not happy with them. Nobody beat their rate initially at 2.75, but they didn’t lock us at that rate. Now loandepot could be the rate, but they are only doing 70% cashout. Still checking around. One broker said the .5 refi charge will start being added to quotes on Oct. 1 due to December closing timelines.

Credit score is 740. Multiple lenders said score was fine and we didn’t need to try to increase it since score still fell into best rates.

We tried Better, loan cabin, loan depot, and few smaller brokers. I am wondering if we should try amerisave. Costco had nothing for us.

Thanks
Don't rule out your local credit unions, and maybe some banks. I have a relative who is doing a cashout refi of around $300K (Mid Atlantic) and received a quote of 2.75% no points from his CU. It's just a matter of putting in the time to check their websites, or contact all of them in your region.
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Post by 3of10 »

jco wrote: Fri Sep 18, 2020 8:40 am Is there a "best" day of the week to close the loan? Or perhaps more specifically, a best day of the week for the loan to fund?

I think I read that you don't want the loan to fund on a Monday because you get charged interest by both lenders over the weekend?

I expect to schedule closing soon, so I want to be prepared.

Also, how do you know if you're getting charged double interest?
I read about this also, but didn't see any details on why you would get charged by both lenders. When you get the CD it will tell you on the top page the date when the funds will be disbursed. And in section F (pre-paid), it will list the days when interest is taken for the new lender.

So, if disbursement is on 9/17, and the pre-paid interest in section F also starts on 9/17, then I don't see the double-dipping over a weekend. Now, where I do see over-charging could be on the actual disbursement day itself, or payoff day (which might be on the next day). Then, the question is who is at fault. Maybe someone will post if it happened to them.
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Post by BrandonBogle »

3of10 wrote: Thu Sep 24, 2020 11:35 am
jco wrote: Fri Sep 18, 2020 8:40 am Is there a "best" day of the week to close the loan? Or perhaps more specifically, a best day of the week for the loan to fund?

I think I read that you don't want the loan to fund on a Monday because you get charged interest by both lenders over the weekend?

I expect to schedule closing soon, so I want to be prepared.

Also, how do you know if you're getting charged double interest?
I read about this also, but didn't see any details on why you would get charged by both lenders. When you get the CD it will tell you on the top page the date when the funds will be disbursed. And in section F (pre-paid), it will list the days when interest is taken for the new lender.

So, if disbursement is on 9/17, and the pre-paid interest in section F also starts on 9/17, then I don't see the double-dipping over a weekend. Now, where I do see over-charging could be on the actual disbursement day itself, or payoff day (which might be on the next day). Then, the question is who is at fault. Maybe someone will post if it happened to them.
It is not uncommon for the payoff to be sent from the settlement agent the day AFTER disbursement.

The lender sends the funds to the settlement agent on the disbursement date and then the settlement agent gets the payoff out the next morning for instance. Or even if sent the same day, potentially after the old lender’s cutoff time.

So in such a case, if disbursement is on Friday, it could be the old lender gets payoff and stops charging interest on Monday.
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Re: Refinance Mega Thread

Post by 3of10 »

Eurookat wrote: Mon Sep 21, 2020 6:11 pm this is my first refi how are escrow handled? the rep I spoke to today said they would ask for 8months worth of escrow. I believe one of my taxes were just dispersed (June I wanna say) and I have like 1300 sitting in my escrow balancer. I think another draw is happening in Feb. would my current mortgage company refund what I've already paid? Im
The escrow amount varies from state to state based on the time assessment period for your property taxes. It also depends on which month, closing will be done. You might want to contact your old title company that you used for the house purchase, or last refi and see if they have a table containing the # of months of escrow (for the month of closing) for your state. I found such a table by doing a "google search".
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Re: Refinance Mega Thread

Post by z1_gravedigger »

Janus887 wrote: Wed Sep 23, 2020 6:52 pm
tommy85 wrote: Wed Sep 23, 2020 4:43 pm I have 2 identical LEs from LenderFI and Better (2.875%, no closing cost, 30 yr fixed, LTV 60%, loan balance 156K). Better said the LenderFi offer is competitive and they cannot beat it. Better is asking for appraisal fees ($550) as deposit which i will get it refunded at the time of closing but LF is not asking for any deposit. If you were in my shoes, who would you choose? I ask because I see several people experiencing delays with LF and slightly hesitant to go with better because of the deposit (I just dont want to get stuck with them).

Thanks in advance
Well, I think I'm pretty much throwing in the towel with the idea of refinancing at this point. I have a similar sized loan to tommy85 here (135k vs. his 156k) and I cannot even get close to a LE with no closing costs. In fact, the very same lender mentioned here (Better) just quoted me $9900 in closing costs!

There is something very wrong with this industry. I've never encountered any other business with such absurd and arbitrary pricing discrepancies. Extremely shady.
$108k here (Ohio), currently five years into a 4% 30YR. No offer I’ve found is close to zero-cost closing for a lower rate.

In process with 2.25% 15YR with a local credit union. That’s half a point ($540) plus $3400 in other fees. Waiting on (hoping for) and appraisal waiver ($480) and title discounts.
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Re: Refinance Mega Thread

Post by 3of10 »

BrandonBogle wrote: Thu Sep 24, 2020 11:40 am
3of10 wrote: Thu Sep 24, 2020 11:35 am
jco wrote: Fri Sep 18, 2020 8:40 am Is there a "best" day of the week to close the loan? Or perhaps more specifically, a best day of the week for the loan to fund?

I think I read that you don't want the loan to fund on a Monday because you get charged interest by both lenders over the weekend?

I expect to schedule closing soon, so I want to be prepared.

Also, how do you know if you're getting charged double interest?
I read about this also, but didn't see any details on why you would get charged by both lenders. When you get the CD it will tell you on the top page the date when the funds will be disbursed. And in section F (pre-paid), it will list the days when interest is taken for the new lender.

So, if disbursement is on 9/17, and the pre-paid interest in section F also starts on 9/17, then I don't see the double-dipping over a weekend. Now, where I do see over-charging could be on the actual disbursement day itself, or payoff day (which might be on the next day). Then, the question is who is at fault. Maybe someone will post if it happened to them.
It is not uncommon for the payoff to be sent from the settlement agent the day AFTER disbursement.

The lender sends the funds to the settlement agent on the disbursement date and then the settlement agent gets the payoff out the next morning for instance. Or even if sent the same day, potentially after the old lender’s cutoff time.

So in such a case, if disbursement is on Friday, it could be the old lender gets payoff and stops charging interest on Monday.
+1. I agree. It's the payoff day that becomes the issue if different than the disbursement day. Now, if the old lender gets payoff on a Monday, then I should be able to check the CD section F to confirm that the new lender starts charging interest on Mon/Tues.

If the new lender is charging interest for Sat/Sun, then I would go after the new lender for a refund for Sat/Sun because the new lender can only start charging interest after the payoff date. Is that correct? Another question is how do I know which day payoff has been completed? Do I have to contact the old lender?
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Post by BrandonBogle »

3of10 wrote: Thu Sep 24, 2020 12:12 pm
BrandonBogle wrote: Thu Sep 24, 2020 11:40 am It is not uncommon for the payoff to be sent from the settlement agent the day AFTER disbursement.

The lender sends the funds to the settlement agent on the disbursement date and then the settlement agent gets the payoff out the next morning for instance. Or even if sent the same day, potentially after the old lender’s cutoff time.

So in such a case, if disbursement is on Friday, it could be the old lender gets payoff and stops charging interest on Monday.
+1. I agree. It's the payoff day that becomes the issue if different than the disbursement day. Now, if the old lender gets payoff on a Monday, then I should be able to check the CD section F to confirm that the new lender starts charging interest on Mon/Tues.

If the new lender is charging interest for Sat/Sun, then I would go after the new lender for a refund for Sat/Sun because the new lender can only start charging interest after the payoff date. Is that correct? Another question is how do I know which day payoff has been completed? Do I have to contact the old lender?
Nope. They can charge interest from the moment you are legally obligated to pay them back any money they are giving you, which is your disbursement day (after closing you usually have a period that you can cancel the new loan, so you don’t become legally obligated to the new note until the 4th day after closing).

Some reported before a company being shady and charging interest from the closing date, which I’m sure you could contest and win, but likely isn’t worth the effort.

For payoff, I would watch the old lender’s online account of your loan to confirm. You can ask the settlement agent to give you confirmation of payoff, which is often the Fedwire Reference # for the wire transfer of the payoff.
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