FYI for homeowners

[flea]

Apparently mortgage rates are insanely low right now - yes, even more insanely low than usual - and the people who buy up mortgages are desperate for good quality loans to buy. As a result, we currently have the opportunity to refinance at ZERO cost to us - the bank will pay all costs and recoup the difference when they sell our mortgage off. (Yes, mr. flea said, "Hang on, explain that one more time?" to our banker.) We can go from our current rather decent just-under-6% rate to something like 4.75 for free, which doesn't seem like much but cuts $150 a month off our payments and reduces the interest over the course of the loan by more than 100K. If we were willing to pay points (we aren't, because of the uncertainty of mr. flea's employment) we could get a rate as low as 4.26% (for 20% down, good credit, 30 year fixed rate.) If you've thought about refinancing, definitely look into what a reputable bank can do for you right now.

Comments

[sara]

Yeah, I had been v. optimistic because rates are so low, but it ended up being absolutely the shittiest financial experience I have ever had. And usually people really WANT my financial business, knowhatImean? This...this was hideous. And it was with USAA, which is normally so excellent! I should probably sit down and write them a pointed letter, but I am still so crabby about the whole thing that I don't think I could keep my temper.

They never did manage, in six weeks of wrangling, to get the amount of the current liens correct. And they HELD all the current liens! So much incompetence.

[cofax7]

Wow, that's really awful; I hadn't realized you'd just walked away from it.

My understanding, from some of the stuff I've seen, is that the banks are all rather overwhelmed with the number of foreclosures they're managing right now. Also, the criteria for approval have been tightened severely. So even though the rates are great for mortgages, it's actually a lot harder to get one now because they're much more cautious about both the creditworthiness of the mortgagee and the amount of the mortgage. Well, and they don't have a lot of staff available to work the approvals process.

[sara]

Oh, it was so bad that relatives stepped in to offer us help with paying off our second mortgage, rather than continuing with the refi. That's how bad it was.

I think they're jumpier, yeah, but...we're pretty textbooky good credit types: C's had his job for a decade, our credit scores are over 700, we have no debt besides the mortgages, we have 20% equity in the house, we have assets, etc. etc. What amazed me about the whole experience was that despite everything I've seen in the paper about banks tightening their standards and being more careful, the people we dealt with were SO sloppy -- losing paperwork, unable to make corrections, the appraiser made mistakes and everyone concerned refused to fix them...I mean, I could go on. And on and on. I kept e-mailing these people itemized lists of the things that needed to happen before we'd sign off on the paperwork, and none of it ever happened. GAH.

[loligo]

USAA? Say it's not so! Oh, I am so disappointed! They've been doing my insurance since forever, and I was considering doing our mortgage with them three years ago, until I decided to go with a local bank. (Who I now love, because I can call one of the VPs of the bank with questions whenever I want, and he actually calls me back, and he listens to our radio show on Tuesdays! I like small towns.)

[sara]

I was very distressed, because we have always previously had good experiences with them. My brother and his wife bought a house earlier this year, and they also ended up going with a different bank after having a bad USAA experience. I don't know what is up with their mortgage division this year but after bad experiences in the family on both the origination and refi sides, I would be very reluctant to do business with them again -- such a change from when we bought our house, very uneventfully, using them in 2005.