Tuesday, January 13, 2009

And, in other news ...

I posted a few weeks ago that I decided to refinance my house. Last week, I received the unfortunate news that the refinance with my credit union wasn't going to happen because the appraiser gave an appraised value of my home at $33,000 less than the property tax assessment.

$33,000!!

When combining the outstanding balance of my first mortgage and the home equity line of credit (HELOC), I was just over the 85% threshold for refinancing. I used the HELOC last year to make up the other 40% of my salary that I lost because I was on sabbatical, especially since I had more out-of-pocket medical expenses.

Crap. I tried to figure out if I could dispute the appraisal, but the credit union said that the only way to do so was to pay for another appraisal and then they would average the two.

In the meantime, the 30-day lock-in for the interest rate (5.5%) expired on Sunday, Jan 11. So, when I asked if I could get the lower interest rate (it was 4.625% last Friday), the answer was no, the credit union has a policy of using the "worst case" - so they use the higher rate between when I originally applied for the loan and what the interest rate is now. So, if the rate goes down, I use the 5.5%. If the rate goes up, I use the new higher rate.

Figures, huh?

So, I started looking into other mortgage companies. I did some searching online and found that many of those online companies have consumer complaints. They include Quicken Loans, Lending Tree, Paramount Equity, among others. I settled with Nationwide Lending Corp. as I couldn't really find any complaints against them. The person I'm working with is trying to work with the current appraisal (who just said on his voice mail that he wasn't going to do any business until Jan 21) so that I don't have to pay for another one. That's kind of a good sign. And, I'd be able to get a 4.75% interest rate. My current rate is 6.5%. I'd save over $400 a month if the loan goes through, a lot because of the interest rate and also partly because I'm going from a 20 to a 30-year loan. But the appraiser needs to send the report to Nationwide as well as tell Nationwide why he appraised the property so much lower (Zillow.com gave a value of my home that was $10-15,000 higher than the appraisal I paid for).

It's all kind of a major pain in the ass. But once I got used to the idea that I'd have a much smaller mortgage payment, it was hard to give up. I was also refinancing with cash out so that I could have my friends and brother-in-law build a new fence and do some other repairs to the house. I also spent more cash in Las Vegas thinking that I was going to get the cash out, so now I'm kicking myself because I counted my chickens before they hatched. It's created some financial stress. I think I've got it figured out, though, so I'm okay.

So, we'll see what happens with Nationwide Lending ... I'll keep you posted!

2 comments:

Sal said...

Hi Dee:

My best wishes to you.

I hope all goes well with your refi. It can be a real pain. It is very hard to come up with the true value of a property these days with so many foreclosures and short sales. Zillow is only good to get an idea but appraisers use criterias that zillow can not possibly consider when valuating a property. Another thing, the appraisal is paid by you but it belongs to the lender that ordered it.
Most lenders only work with appraisals that are addressed to them reason why they try to get the appraiser into what is call re-addressing, but this is prohibited by USPAP (entity that regulates appraisers). So a serious appraiser should say no to re-addressing what will cost you more, unless the lender wants to work with an appraisal addressed originally to another lender, but this eventhough is legal is very unlikely because of most lenders internal policies. Go figure.

God Bless you.

Dee said...

Hi Sal,
No news yet. I didn't realize that readdressing is prohibited by USPAP, but it is legal to do so, if I understand you correctly. Interesting. Thanks for visiting.