Where readers ask, and we (the community) try to answer:
I appreciate all the general information I get from this terrific blog. This is my first question about my own situation.
I’ve been negotiating with the major bank (WellsFargo) that holds my first ($498K) and second ($14K) for a refinance from a 5.5% ARM to 4.75% 30 FRM [Fixed Rate Mortgage]. We paid 10% down and our second -a 5 year ARM is on schedule to be paid off before it adjusts in 12 months.
Our appraisal came back at less than the $625K required to refinance without PMI. Our bank just said “If you want this to go through, you’ll have to bring $28,000 to close.”
Is anyone finding any flexibility for strong credit rated, clear payment history etc? Or is the only way to get a break to stop paying and plead poverty? That would seem self defeating and yet, I’m not finding my bank to be helpful at all.
Thank you for any comments by anyone knowledgeable about this.
Yours truly is not a mortgage expert, and will defer to those that are, as I always do.
I’ve found that WF is not very welcoming those days.
We want to refi a 30y fixed to drop a thick point down… thus cutting some money from WF income ;) (*)
and they drag their feet as in “you won’t qualify” – excellent creditS and LTV 40-45%.
Tomorrow is our deadline with WF, and we are looking somewhere else. Any mortgage broker around?
(*) I really think this is not a detail. The more people refi, the less money they cash in – so they have no incentive to refi!
(*) buzz is that 30 jumbo would jump to ~8% “soon”. and our WF loan agent was not aware/helpful with the jumbo threshold going to 729K.
This is one of the major problems with the “refinance boom” that we are having. Loan to values are restricted to 80% and below, with a condo hot spot at 75%. What happens above these thresholds is what they call “risk based adjusters”. . .I think I posted about these many months back. This is where the Home affordable product picks up, but the product is limited to only government agency held loans—i.e. fannie and freddie mac. This product is limited to loan amounts of 417K for now. This product was just introduced as part of the Obama plan and will certainly impact the market, in fact, my opinion is that it will revolutionize the refi industry. But, as we saw hundreds of product and guideline removals over the past few years, we will need to be patient as they tweak the product. . .it’s natural. That’s why I tell past clients and anyone who likes the current rate and can get a loan. . .LOCK NOW!
Banker – in what way will it ‘revolutionize’ the refi industry?
I locked the rate (4.75%) with WF, but my loan did not get approved by WF at the end……….because of the HOA insurance issue, but I closed with bofa refi with no issue at all………… (although it was slightly higher rate 4.875% for a 30 year fixed). I had a high income job, high credit score, high downpayment/ equity build, I am only trying to lower my payments. It is still a mystery for me to understand what WF is doing……
It seems the refi process was very random especially at WF. Because my friend who lived next door same building refi with WF at the same time, closed with no issue and did not require for the HOA insurance document. Only different is WF had the original loan……
As a local appraiser I can tell you that it is fairly typical for appraisal values to come in low on WF refinances. The company that Wells Fargo orders appraisals from uses fast and cheap appraisers and I have found that these appraisers either 1. are scared into appraising low or 2. often come from out of the area. I have seen several appraisals come in unfairly low for the owners. Had a friend try to do a refi and they brought in the value stupidly low and then used that value to cut her HELOC. She ended up having to go to a broker who pleaded the case to WF and got the refi and HELOC back.
You owe half a million and can’t come up with $28k – something sounds fishy there.
LocalAppraiser,
I hear you but i actually heard the somewhat opposite also come true: my neighbor is going thru WF, got an appraiser (from out of the area) assigned, and they appraised it well above what the homeowners even expected/hoped. Crazy..I would love to believe the appraisal but my other neighbor got almost the exact oppposite result working through someone else.
I know appraisel is more ‘art’ than science but it sure seems all over the place.
From the original reader:
“This week, after assuming that the line had gone dead with my expressed unwillingness to pay PMI, I heard back from the bank representative handling my process. Okay, I did talk to her boss. But, she said that I could definitely use my HELOC rather than trying to come up with cash. Further, the rate on that HELOC would be even lower than the 4.75% on my refinanced first. When I asked if the rate could be that low on the entire HELOC- including the balance of my 5/1 ARM that would adjust early next year, I was surprised to hear “Yes”.
Anyway, it looks like patience and perseverance paid off. I don’t have to feel like the Prodigal Son’s brother. However, I did take my lowball appraisal and use it to apply for reduced property tax. It just wouldn’t be a rollercoaster without some ups, downs and curves, hmm?
Thank you, Alex and those who made helpful and interesting comments.”
You’re welcome! Thanks for reading.
I wish I would have read this before I started my refi with WF. My appraisal came in rediculously low, the appraiser was not familar with the area, his comparisons used were not even close to my home, or the same type of home. I called the appraiser and he wants ME to get him more information on the homes in my area and said this is all he has to work with. WF has charged me $500.00 already for application fee and appraisal and say they can not refund me. My credit is excellent, the appraisal is invalid, and I’m currently complaining up the chain with WF. Any suggestions?????
I have a better one…..
I bought last August paid 350k appraisal came in at 375k, and i was at 90%LTV. I simply want to refi to a lower rate, and the new appraisal came in at 250k 10 months later. I do not have a copy of it yet, but the loan officers answer was ‘you can simply pay down the difference’ How common is it to dispute and get the appraisal adjusted to a more reasonable number. Id be willing to bet if this was a purchase, they would have come back at purchase price.