Refinancing?

[Ryan]

My lender is Wells Fargo and my interest rate is 6.25. I just saw a program "clark howard". A woman called in and said she got a letter from her lender. It stated that she could refinance her mortgage with at no cost. Clark Howard said it was real. That your lender would rather give you an instant rate drop instead of loosing you to another lender. I deploy a lot and my wife glances over our mortgage statements. Not sure if we ever got one of these letters.....maybe not. Can I call Wells Fargo and ask if they will give me such a deal?

 

[Bruce Urie]

Our lender is Wells Fargo also. What you do is call them and ask for the 3 step refinance system. They will refinance your loan at a lower rate for no cost, being the national average now is 4.55-4.99 %.

We got ours at 4.385% and lowered our house payment down significantly.

You can go for the 30 year fixed rate or the 15 year fixed rate. Wells Fargo will work with you on this very nicely. They did this for us when we were thinking of switching loan institutions to refinance our house. We got one hell of a great deal, and it's still time for you to do this also.

Any questions, ask me. My wife is an expert at this stuff. Hope this helps you.

Bruce '87 Grand National

 

[huntsg]

I didn't use wells Fargo but I just refinanced from a 30 year 6.25% to a 15 year 3.75% no points. It kept me at about the same payment and cut 7 years (I had 22 remaining) off my loan.

 

[Ryan]

Wow. Thanks for the quick response. I do have one question. When I bought the house I put 20 percent down.....and this helped because I did not have to pay mortgage insurance. Will I have to put another 20 percent down or will this carry over?

 

[BuickMike]

I refinanced from a 30yr fixed 5.375 to a 20yr fixed 4.0. It did cost my $2000 closing costs but I save over $60,000 in interest over the life of the loan vs. the 30yr. Even if you have to pay, go find a good amortization calculator online and do the math. You will save tons.

 

[ijames]

Ryan, it all depends on what your house appraises for now, and what your loan balance is. So long as the balance is under 80% of the appraised value you won't need the insurance. Also, most 30 yr fixed mortgages do not have a penalty if you pay them off early (past the first couple of years), so I recommend staying with a 30 yr mortgage and making extra principal payments. That will pay it off in 15 or 20 years (depending on how much extra you pay), saving you all the interest just like you had a 15 or 20 yr mortgage, but if times get tough you can just drop back to the regular payment which will be a lot lower with a 30 yr mortgage than a 15 yr mortgage. Sort of a free insurance thing .

 

[chadly]

Not WF but I tried to do a refi and my bank said no. So we went else where. I have a nice cheat sheet I can send you if you would like. You can put in your interest rate, loan amount, taxes, and insurance. It will show you what your monthly payments will be and how much you will pay down your loan each year. I use it all the time for purchasing rentals. Excel.

 

[Squid4life]

Ryan, call wells fargo and just ask. They can tell you what you can save and you can decide if it is worth it without committing at first. Wells Fargo was a pleasure to work with doing our refi.

 

[injdinjn]

Interesting, I have not heard of WF working with anyone. Guess it depends on the appraisal and income.

 

[Pittsburghkid]

Ryan, it all depends on what your house appraises for now, and what your loan balance is. So long as the balance is under 80% of the appraised value you won't need the insurance. Also, most 30 yr fixed mortgages do not have a penalty if you pay them off early (past the first couple of years), so I recommend staying with a 30 yr mortgage and making extra principal payments. That will pay it off in 15 or 20 years (depending on how much extra you pay), saving you all the interest just like you had a 15 or 20 yr mortgage, but if times get tough you can just drop back to the regular payment which will be a lot lower with a 30 yr mortgage than a 15 yr mortgage. Sort of a free insurance thing .

That's true and is a nice safety net, but I think most banks give you a lower rate if you take a shorter term. I know when I refied the 30yr was 4.8%, the 20yr was 4.5% and what I took was the 15yr which was 4.3%. They'll give you a lower rate for a shorter term because even tho they make less on the finance charges they get their money back sooner.

 

[Scott A.]

We had Wells Fargo for (3) years, I called and tried to get in on the 3-step program and was told we didn't qualify. Have almost perfect credit, no debt, etc, and they wouldn't tell me why we didn't qualify. They offered to refinance us at 0.5% higher than the bank we went with on a 20-year loan, wouldn't even try to match them. After I sent the Wells Fargo rep a copy of the other bank offer, he told me I should go with them, he couldn't touch it.

The bank we went with said WF was nuts for not doing it. Heard the same story out of one other couple. Stay away from Wells Fargo. BTW, we signed up for 4.0% @ 20 years, no points last October. Rates have gone up since then.

Good luck.

 

[SGRIM]

Interesting, I have not heard of WF working with anyone. Guess it depends on the appraisal and income.

WF can be mofo's... Can't hurt to try but I wouldn't hold my breath...

 

[chadly]

WF can be mofo's... Can't hurt to try but I wouldn't hold my breath...

A little off topic but here I go. I’ve bought many houses over the years from Wells Fargo and rarely does the transaction go smoothly. It’s the only bank I try to avoid doing business with especially if I’m buying the home through a short sale. I’ve got one now that I’m buying from WF that was to close over a month ago. I got word yesterday that it would be at least three more weeks. I’m glad many of you have had positive experiences with them. As already stated though give them a call and see if they will work with you?

 

[Ryan]

I spoke with Wells Fargo a few weeks ago. They don't have a 3 step refi in Hawaii. But I was able to drop my interest rate from 6.25 to 4.89. Will have to pay around 7k to close. I have a few bucks sitting in crappy savings and money market. This is an old question and I know there will be opinions on both sides. Should I trow some money toward the principle and drop monthly payment or should I hold on to the cash. I have heard both sides of the story. If I keep the money then it need to get invested. I don't have a very high tolerance for risky investments. I have my Military TSP and a ROTH IRA.

 

[t-typinator]

Ryan, it all depends on what your house appraises for now, and what your loan balance is. So long as the balance is under 80% of the appraised value you won't need the insurance. Also, most 30 yr fixed mortgages do not have a penalty if you pay them off early (past the first couple of years), so I recommend staying with a 30 yr mortgage and making extra principal payments. That will pay it off in 15 or 20 years (depending on how much extra you pay), saving you all the interest just like you had a 15 or 20 yr mortgage, but if times get tough you can just drop back to the regular payment which will be a lot lower with a 30 yr mortgage than a 15 yr mortgage. Sort of a free insurance thing .

All true + great advice, but,If you have good credit you should be able to refinance to a much better rate then the 6.25 + still do the 30 yr.
You can also set it up so that you pay bi-weekly,instead of monthly,which makes 1 extra payment a yr.+ takes something like 7 yrs off of the mortgage + you barely even notice that you made an extra payment,I think you set up an account + they take it out automatically,+ i believe they give you a slightly better rate too if you do it that way,+ it makes life easy because you don't have to send a check every month + you get the other benefits i mentioned also.It's been a while since i've done a mortgage but i always did it that way + it works out great,+ you can also do the extra principal payments on top of that as ijames stated,+ cut even more time off the mortgage.Your bank can give you more info on all this.
Also,there is almost always closing costs on a refinance, but they can usually roll them into the new mortgage,so there is "no money out of pocket", which is what may have been the case of the lady on the Clark Howard show,+ not actually "no cost".
In a way it is no cost,because you didn't actually lay out any extra cash,but closing costs are added to the mortgage balance,but it is offset by a lower interest rate +lower payment ,so it is like "No Cost" in the long run.
It will all hinge on how good your credit score is + how much equity you have in your house, if it will work or not. Good Luck

 

[usetaboost]

I was told I don't have enough equity and in the end it wasn't going to be worth it. THen again for some reason the bank I usually go through would only offer me 4.5 interest rate I might try a few different lenders before I give up though. My current rate is 5.65 so it may not even be worth it.

 

[BandAid]

they tell you no cost but what they really do is give you a lower rate but add the closing cost into the mortgage and you never see it,but your monthly payment is lower and or shorter duration..NOTHING IS EVER FREE.....ever...

 

[Ryan]

Update

I apologize for the long post. Think this is more for venting than expecting an answer but advice is always appreciated. Also, I am really bad at explaining complex situations in a post. I hope this makes sense.



I called Wells Fargo and asked about a "no cost" re-fi. The sales person said it was not available in Hawaii. But he was very eager to get me to lock in right then and there for 4.85%. He said it would be no RE-appraisal. So I locked in. I gave him all my info. He quoted me a closing cost of $6-7k. He said this was a high estimate. They want to give you a high number so you are not surprised by a higher number at closing. Well I get the paper work in the mail and it says "around" $7500. I get a call from the sales man saying my place does not qualify for this type of loan since my house is considered a condo. I asked "what would be the difference between the two loans" He said "nothing" After a few minutes of him reading.....he says there "may" be a re-appraisal required. I ask how much will it cost? He says about $3-4 hundred. I ask him to check on this and let me know if this is required. The next call I get is from the appraisal company to schedule a time to meet for the re-appraisal. So he does not let me know my house requires a re-appraisal just sends them over. The appraiser shows up and I ask "how much is the appraisal fee?" She says "we bill wells Fargo directly?". I get an email asking for and authorization to charge my card for $625. I also get a new set of paper work in the mail with a closing cost of $8800. Quick recap. From a $6-7k quote to $7500 to $8800. Appraisal quote from $3-4 hundred to $625. I called wells Fargo. Wells Fargo says they have no control over the appraisal fee. I know that but first they should have let me know that a re-appraisal was needed and maybe checked the cost of the re-appraisal fee and notifying me prior to scheduling the re-appraisal process. Next I ask about the jump in the closing cost. Wells Fargo says my house appraised at lower than they estimated. The house appraised at $500,000. They quoted my closing cost based on $540,000. I bought the house for $520,000. I do not know were they got the $540,000 estimate from and neither do they. Does anyone in the united states think that home values have gone up in price in the past couple of years? Really?

RE-CAP

Salesman: Quoted $6-7k Closing. Paper work $8800

Salesman: Did not notify me that re-appraisal was needed. If needed would only cost $3-4 hundred. Actual $625.

Salesman: Closing cost based on $540,000 estimated value. Actual. There are 50 Identical units. A dozen have sold in the past few years. NONE have come close to $540,000.

My summary. This is a TEXT BOOK "bait and switch" The salesman gave me "ideal" numbers to get me to commit and the I get a larger bill.

 

[TR Custom Parts]

In the middle of doing a "fast track" refi with Bank of America who already has my mortgage. Went from 6 1/8 to 5 for a 30 with supposedly no appraisal needed. Right now things seem to be stalled with them, have jumped thru the hoops of fire as requested by them but their update page on their site shows no progress on moving this ahead.

When they sent my good faith estimate it had a higher interest rate but then noticed that one sheet was not even for my refi. The guy who always quickly responded to my questions seems to be dropping the ball.

 

[Ryan]

My opinion of the re-fi process is..... the "sales" department just wants that commission or what ever they get from the process. Get you to start the process with there company with promises of the lowest numbers....then "you" have to deal with reality of big numbers. The sales people are out of the picture, they get there money when you sign the deal.

Bait and switch all the way.