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Bank says I didn't float down - which option should I do?
Old 04-11-2009, 01:37 PM   #1
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Bank says I didn't float down - which option should I do?

I recently applied for a mortgage refinance and went with a no-cost, no escrow, no prepayment penalty, 30 year fixed at 5.25% with a float down option. Two weeks ago I called up and the guy I spoke with said I could float down to 5.125%. I said that I wanted to do that and thought it was locked. Someone called me yesterday and said that my loan was approved but is still at 5.25%. I asked her about the float down that I had done but she said there wasn't a record of it. Do you think it was an honest mistake/misunderstanding or something shady? The bank is Wells Fargo and I've been happy with them except for this one occurrence.

Which of the three options should I do?

1. Not worry about it. It's only 1 point = about $18 a month. Since I did a no-cost refi if rates drop anymore I'll just refinance again

2. Call back Monday, explain my dissatisfaction and ask again for the 5.125%

3. Play hardball by calling a couple of other banks and try to get a lower rate. If they offer me a lower rate call my bank back and ask them to match it.


I'm leaning towards 3 and if I'm not offered a lower rate than trying option 2. I'm curious to read how other people feel about it.
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Old 04-11-2009, 03:35 PM   #2
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Hardball all the way. WF just announced record profits and laid off a bunch of people. Maybe the folks you were talking to don't even work their anymore.
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Old 04-11-2009, 06:13 PM   #3
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Years ago I tried to get a mortgage with WFC and at the last minute they pulled some crap. Luckly, I was working the same mortgage with BAC at the same time - I was thinking that WFC's was too good to be true - and it was. I wouldn't touch them ever again -- and I believe the pre-announcement they just made on Thursday (NOT).
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Old 04-11-2009, 07:10 PM   #4
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Play hardball, #3. Yahoo finance is saying the average 30 year fixed is 4.99% as of right now. Back of the envelope calculation says you can probably save about $450 a year if you can get the rate down to the stated nationwide 4.99% average. Some folks are getting even lower (4.875% or so).

I say go for it...

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Old 04-11-2009, 07:28 PM   #5
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Play hardball, #3. Yahoo finance is saying the average 30 year fixed is 4.99% as of right now. Back of the envelope calculation says you can probably save about $450 a year if you can get the rate down to the stated nationwide 4.99% average. Some folks are getting even lower (4.875% or so).

I say go for it...

R
Um, note that OP references a no point, no fee, no escrow mortgage. The 4.99% rate you quote typically includes a point plus out of pocket costs in the thousand plus range. The cost of money involves more than the rate.

I would shop around to see if someone else would offer a better deal on a no cost, no point loan, but if not I would just take what is offered. There is a reasonable chance you will refi again, so what the hey.
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Old 04-11-2009, 07:28 PM   #6
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I'd go with option 3...what have you got to lose?
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Old 04-11-2009, 07:31 PM   #7
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Um, note that OP references a no point, no fee, no escrow mortgage. The 4.99% rate you quote typically includes a point plus out of pocket costs in the thousand plus range. The cost of money involves more than the rate.

I would shop around to see if someone else would offer a better deal on a no cost, no point loan, but if not I would just take what is offered. There is a reasonable chance you will refi again, so what the hey.
Point taken (pun intended)

Would still shop around though...

R
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Old 04-13-2009, 12:18 AM   #8
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Um, note that OP references a no point, no fee, no escrow mortgage. The 4.99% rate you quote typically includes a point plus out of pocket costs in the thousand plus range. The cost of money involves more than the rate.

I would shop around to see if someone else would offer a better deal on a no cost, no point loan, but if not I would just take what is offered. There is a reasonable chance you will refi again, so what the hey.
You should be able to get a 4.99% rate with no point, but would owe ~$2k or less in fees probably.

My brother is doing a refi at 4.375% with .6 points and it was around $2k lender fees + appraisal, etc.
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Old 04-13-2009, 08:53 AM   #9
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You should be able to get a 4.99% rate with no point, but would owe ~$2k or less in fees probably.

My brother is doing a refi at 4.375% with .6 points and it was around $2k lender fees + appraisal, etc.
You're brother got an awesome deal. My sister got 4.375% but paid more in closing costs. If I was offered something like that I would jump on it in a heartbeat.

Here's why I like the no-cost option. The difference between monthly payments with 4.75% and 5.25% on my mortgage would be about $75/mo. If the 4.75% costs me $3,000 more it would take me 40 months to recoup that cost. The other nice plus about a no-cost is that if rates drop even further I can refinance again with nothing to lose.

I'm going to calls Bank of America and probably a couple of others this afternoon to see what they offer.
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Old 04-13-2009, 12:37 PM   #10
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I just called Bank of America. The guy was okay but more sales like pitching the "what would you like your estimated payments to be" line. He said they don't offer a no-cost loan. Here's what he offered:

4.25% - with 3.25 points - that's the kicker
5.25% - with 0.125 point and other closing costs

I'm definitely better off sticking with WF but I'll probably call one or two more banks to see what they say.

Does anyone have any recommendations for another bank that I should call?
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Old 04-13-2009, 12:42 PM   #11
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I just called Bank of America. The guy was okay but more sales like pitching the "what would you like your estimated payments to be" line. He said they don't offer a no-cost loan. Here's what he offered:

4.25% - with 3.25 points - that's the kicker
5.25% - with 0.125 point and other closing costs

I'm definitely better off sticking with WF but I'll probably call one or two more banks to see what they say.

Does anyone have any recommendations for another bank that I should call?
AimLoan.com (hmm, I put in aimload . com and it filled that in with the advertisement, sorry) is pretty good. Or you can try bankrate.com and see what banks they have show up when you search your area. Also the lending tree if you are patient.
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Old 04-13-2009, 01:49 PM   #12
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AimLoan.com (hmm, I put in aimload . com and it filled that in with the advertisement, sorry) is pretty good.
When you post a link in these forums it automatically replaces the URL with the title of the web page. I was confused by it too when I first posted something with a link.
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Old 04-13-2009, 02:04 PM   #13
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Hint: If you plan to post a link, do so then hit the preview button. If you don't like the result you can modify the language in the link any way you prefer and it will continue to work. In the two examples above I simply deleted everything after AimLoan.com.
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Old 04-13-2009, 03:48 PM   #14
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Bank5, you should check around for a lower rate and then I would go back to WF and tell them what I thought about them going back on their rate promise. Tell them you have heard about that problem with WF. Ask them if they record conversations much like investment companies. Also, remember, WF has all the info on your house and refi should be simple. Any other finance company would have to start from ground zero so fees would probably be higher.
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Old 04-13-2009, 06:03 PM   #15
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I have always heard to get rate locks confirmed *in writing* from the lender, to avoid this kind of thing.

It may not help OP, but for others reading this thread in the future...

2Cor521
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Old 04-14-2009, 12:30 PM   #16
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Be careful on the 'no cost' refi.... my BIL (last refi craze) was doing one and it really was a 'no cash' refi as they were just happy to roll all the costs into your new loan... even when they told him all along it was a 'no cost' loan.
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Old 04-14-2009, 05:19 PM   #17
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Attention Schwab investment clients. Check out their banking/mortgage offering. I found their rates competitive and they are efficient and easy to deal with. They qualified us over the phone, followed up with a FedEx package, for signatures, the next day. Phone calls and email inquiries were answered promptly.
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