Seriously, these are some fabulous pots and pans – by Cuisinart, no less!
We already wrote about how we decided to refinance. In short, the timing was right, and we got a great rate (3.25%), so we went ahead and got the 90-day rate lock and officially started the refinance process.
Little did we know what a headache the whole process would turn out to be. But we did get some great Cuisinart pots and pans
What Was the Refi Process Like?
After the initial refinance application, we got handed off to a loan processor who would be the main point of contact on the loan. Every few weeks, he would email me a request for additional paperwork, which I would generally scan and email back the next day. Multiple times documents were lost, and he would email again weeks later requesting the same documents, complaining about being overworked all the time.
What Documents Did We Have to Provide?
Over the course of 90 days, we had a number of document requests, some of which didn’t seem to make any sense at all. But, if you’re starting or considering a refinance, it’s worthwhile making sure you know where you can get all of these quickly, just in case you need them.
- IRS Form 4506 -T (request for previous tax filings, they provide)
- Bank authorization/notification forms (they provide)
- Proof of insurance (homeowner’s and flood) on house being refinanced
- All recent bank statements (2 months)
- All brokerage account statements (most recent)
- Explanation of recent credit inquiries + details of any credit opened
- Past 2 months paystubs
- Previous Year’s W2s
- Copies of all rental agreements on rental property confirming rental income
- Proof of insurance (homeowner’s and flood) on our rental property
- Most recent real estate tax bill for rental property (oddly not for the property we were refinancing…)
- Statement of all credit lines showing current balance (including our recently opened HELOC showing no balance)
- Updated insurance declarations – your insurance agent needs to be able to get these to have the new loan information on them even before the refinance closes
- Copy of marriage certificate showing and proof of name change
What About the Closing?
Here was where the real craziness happened.
- Our loan processor scheduled the closing for a day when his office was closed (without telling us that he would be unavailable to answer questions)
- Loan paperwork was delivered late and incomplete. Only the HUD settlement statement (the HUD) arrived the night (9pm) prior to closing
- The HUD that arrived that night was incorrect. The loan processor miscalculated the escrow funding, causing an over funding of $1,400 to the escrow account – i.e. we were overpaying by $1,400
- There was also a mistake where our biweekly payments were not cancelled in time, and an extra half-payment from our old loan was not accounted for on the HUD
- So there was a total of a little over $1,900 difference between the closing values on the HUD and what I calculated they should be.
- It took one day and talking with our loan processor’s supervisor to fix the escrow over funding. A check for $1,400 arrived the next day.
- Fixing the overpayment due to the biweekly payments took another couple of weeks and I ended up having to go a couple of steps up the food chain in the loan processing department to get it done.
Was Our Experience The Norm?
Probably not. At the same time that we started our refinance, one of Mr. PoP’s co-workers refinanced with the same bank and closed in 60 days with none of the headaches that we had. We also ended up getting personal apology letters from the loan processing department for how many things went wrong. So no, I’m pretty sure that our experience was not the norm.
What Would We Make Sure to Do Next Time?
- Have one person as the point of contact for the bank
- Have access to scanner to get documents returned ASAP to the lender
- Make it a habit that your loan processor must confirm receipt of all documents
- Request status updates over the phone on loan bi-weekly, even weekly as the rate lock is nearing expiration
- Make loan processor review calculations with you – for us this meant specifically looking at the payment dates for all escrow bills (taxes + insurance) – the escrow miscalculation was caused because he was off by 5 months in when the real estate taxes were paid every year
- Confirm that loan processor will be available day of closing (obvious in hindsight…)
In the End…
We did get the loan closed in time, and the refinance will save us over $40K in interest payments over the life of the loan. And you know, we got those great pots and pans…
Have you ever had a refinance or loan process go wrong? What went wrong and what could you have done to prevent it or fix it? Any advice for people just starting out on the refinance track?
I’m not quite at the point where I’m thinking of buying anything major like a home, but I’m trying to acclimate myself to the idea of having a mortgage and get over the “ahh scary” factor by reading blog posts like this so I can get comfortable with what could happen and what does happen. Great post!
Never hurts to learn early so you can go in with eyes wide open!
Late to the party but, we had almost the exact same experience. Wells is supposed to to this steamlined refinance for current mortgage holders. We had a Wells Fargo mortgage at 4.75% for 15 years. We were two years in and the rates were so low, so we decided to refi again. Our agent said no problem. Six months later and tons of lost documents, and the agent saying how busy she was (maybe they need to hire more people) we had our closing scheduled at 4PM. My husband took off work early and the documents didn’t show up until 4:55. By that time our daughter was bouncing off the wall and he signed a power of attorney so I could sign for both of us and he could take her home. In the end, we now had a 13 year loan at 3.25%. We hope to be done in 10 years, so it is a sweet deal, just a big headache to go through the process. We have close to 800 credit scores, so I can’t imagine someone how it would be if your credit wasn’t perfect.
Kim – are you sure you’re not somehow my long lost sister living a parallel life on the other side of the country? First the rental property fun, now the epic awful-ness of a refi with Wells Fargo. Except I don’t have a daughter… just Kitty PoP =)
I can’t believe that yours took 6 months. I was pestering them so much as we approached the 90 days to get that done. We actually closed on the purchase of residential lot a week after the refi was finished, and if the refi had been delayed any longer I’m not 100% sure that it would have closed. We probably would have had to wait a year and try again now after paying down a good portion of the HELOC…
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