TRYING TO REFINANCE YOUR HOME? BEWARE... !
Our intent in getting a refinance was not for getting some extra money for making home improvements. If only! As it is now, our house is not luxurious; it is functional and mostly comfortable, which is fine although some things could certainly stand to be updated. But our reason for refinancing is to get some extra money for paying off our credit debts.
Bank of America offered us a great-sounding deal back in January. It would allow us to pay off our credit debt, for which I have been paying out about $1400 a month, and only increase our mortgage payment by $400, putting about $1000 extra dollars in our pockets each month. It would also allow us to finish our house payments in 15 years instead of 17 years. We have plans of building up more emergency money in savings, of which we have very little. We also plan to help our kids with some of their college costs.
Even getting the process started was not easy. When I tried to get things going in December, there were problems. First, my late father and I have the same name. When he passed away, one of his gasoline cards didn't get paid off and it ended up on my credit reports. It took me about a month to get that problem fixed with Experian, TransUnion and whatever the third major credit report outfit is (I have forgotten the name). But by early February with due diligence (LOTS of e-mails and phone calls) I got the problem fixed. It was at that point when we were actually able to get the official refinance process going.
When you apply for a refinance, the bank will ask you for things such as proof of home insurance, a couple months worth of pay stubs and bank statements, and a current appraisal of your home's value. Once the bank gets these documents, they are good for three months. If the bank takes longer than three months to get your refinance done, they will ask you to resubmit these things.
We started out with an estimate on our home's value of $170,000 and based our projections on that, with a view toward getting about $35,000 in extra dollars with the new mortgage. That amount would cover our credit debts and give us some extra bucks for things like replacing some bad plumbing in one of our bathrooms. Four months into the refinance process, B of A finally hooked up with a local appraisal, which in my estimate lowballed us. Granted, our house is old, but the appraisal came in at $22,000 lower than we expected... cutting into the amount of extra money available in a very big way.
Now, six months after officially starting the refinance process, we are getting closer to having something to sign, but we still aren't there. They advertised the process as taking 90 days, and we're now on Day 180!
For final approval, once everything is in place the application is sent to an underwriter for approval. This should only have to happen once, but we are on the second time with the underwriter now. A few weeks ago we were told I had no FICA score on my credit report; how that is possible I have no idea. All the credit information problems were cleared up six months ago, or so I thought. Apparently they were able to work that out, but now it is back with the underwriter again because we have a small line of credit with B of A and the underwriter has to change things on the documents so that the line of credit is not listed first but rather second in priority on our list of accounts, or some such thing.
For a few months now I have been wondering if Bank of America is jerking us around. It's like Mrs. Snave and I have learned to expect snags and delays, and it is making us wonder what curveball B of A is going to throw us next. Our experience with them has not really been all that great.
I know a lot of other Americans are trying to refinance their homes. I do not know how many are, or to what degree they are finding success. If the banks are getting deluged with applications, I can see how it might take a little longer than the 90 days they say it should normally take.
Is this like the American health insurance industry, in which there is a virtual sub-industry based around denying people coverage? I like to believe not, and I certainly hope not. I know they are having to be careful they don't take on any more bad risks than they already have, but I had been given the impression that banks were being told they needed to make it easier for people to get loans and do refinances, and this has been anything but easy.
It is possible we might get about $16,000 in the refinance, if it actually happens. With a generous offer of some other money from a family member to help us out a little, we might be able to get the credit cards zeroed by Christmas. They are already in our safe deposit box, and have been there for some time now. With the better spending habits we have cultivated and some subsequent minor lifestyle changes, we should be fine financially... when (or maybe if) B of A comes through with some papers for us to sign. If they don't? Well, we will be deep in debt for years and it's our own damned fault.
Our lessons, learned the hard way:
1. Watch your credit debt, and don't let it get to be more than you can pay off in any given month.
2. Check your credit scores from time to time and make sure they are good, that they do not contain erroneous information.
3. If you try for a refinance on your home, second mortgage, etc. don't expect the process to be easy because it won't be. Did we choose the wrong lender for our refinance? Possibly. But maybe they are all like this...
Do any of you have stories similar to this?