Should my refinance warrant such a long delay?

May 6, 2009 11:22 AM

Should my refinance warrant such a long delay?

My current mortgage servicer is working with a local mortgage lender to help me refinance my 7 year ARM which resets in 2 years. They offer $5000 in closing costs. A good deal by any measure as I will go from my current 5.62 to about a 4.88 rate or maybe less these days at no cost. Nice.

And I want to add $30000 to get solar panels and participate in tax credits returning 80% of that. Nice.

So, I applied for this in late January, and it still hasn't finished. This mortgage specialist has strung me along with 'just a little longer' for this time, and explained that Fannie Mae was wanting to double check these in case we would not be able to do this refinance without the incentive from the servicer. That was March.

Credit-wise, we are in the superior range, savings-wise, we are average (meaning we have very little), but income-wise, we do okay with steady work and have $75,000 in equity in the house. There's some student loan and credit card in there, but also some retirement and investments that balance reasonably. We're not talking mega-mortgage here, just $178,000 including the extra $30,000, for a roughly $225,000 house. Seems not-too-risky to me. I'd be willing to cut the panel project to get this taken care of, but the dude hasn't indicated that this would help.

Does this make sense? I feel bullshitted, but I don't want to walk away from the free closing costs. I see no reason for him to waste either of our time. I know of other refinances that took two weeks.

posted by anonymous to work & money (5 comments total)

We started our refi process in March and it was over in April. It took about 4 weeks, which our broker apologized profusely, saying it was unusually long. You started in January and it still hasn't finished? I'd be suspicious and start asking very pointed questions.
posted by jasper411 at 12:05 PM on May 6

They offer $5000 in closing costs.

For clarification ... they are giving you $5k or are you paying $5k?

I ask because you close by saying "but I don't want to walk away from the free closing costs".

/In my limited experience, I've never heard of a lender kicking in zero closing cost plus giving you $5k.
posted by Dave. at 12:06 PM on May 6

I do refinances for a small bank. The oldest unclosed file I have in my handy-dandy rack is from early April.

I would definitely call and see what's up.
posted by Lucinda at 12:13 PM on May 6

Our broker says lenders are being much more careful these days.
We have similar credit, and our refi has been processing 10 weeks so far.
posted by artdrectr at 3:15 PM on May 6

Data Point: Our refi took 3 months. I think one of the issues was that the rate was only locked in for so many days (90), so we really went up to the wire.
posted by anitanita at 7:33 PM on May 6