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Costs to Refinance
Old 11-05-2012, 07:18 PM   #1
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Costs to Refinance

I have to admit I'm a little confused and a whole lot more perturbed about trying to refinance my lake house.

I've been working with Amerisave, was quoted a rate of 3.625 with enough credits to bring closing costs to $0. In fact, it shows a credit of over $300.

And their GFE lists the "Appraisal" as one of the costs that they throw their credits up against.

But then I'm told I have to pay for the appraisal out of pocket, and that I won't get that back at closing. Huh? Then how can they show it as one of the costs that are eliminated, resulting in a credit of $300 at closing?

I ran quotes on the other contender, BoxHomeLoans, and they also specifically include Appraisal in their list of third party costs before they apply their closing credits - also resulting in a claim of $0 closing costs - but when you continue thru the application process, you are required to provide credit card information to pay for the appraisal.

Am I just not understanding how this works nowadays? What happened to mortgage companies/brokers/underwriters covering the cost of the appraisal?

I'm also being told by Amerisave that I may have to pay for a survey out of pocket as well if the old one I have isn't suitable.
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Old 11-05-2012, 07:33 PM   #2
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I have refied 5 times over the years (including two times in the last 3 years) and I didn't have to put up any money before closing. In one case the property was not my principal residence. Smells odd to me but I know practices differ from state to state.
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Old 11-05-2012, 08:26 PM   #3
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I had to cut a check for my house appraisal, right at the beginning of process this spring.
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Old 11-05-2012, 09:30 PM   #4
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If you don't put up the money, the mortgage company has to front it and hope you are approved and decide to actually sign for the loan. Imagine turning someone down for a loan and then trying to get the appraisal money back from them. On the other hand, you do get the appraisal report. which is what you paid for. In my two refi's I had to put up the appraisal money before starting the approval process.
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Old 11-06-2012, 05:44 AM   #5
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I understand why I would have to pay for the appraisal up front and why a potential lender wouldn't want to risk having to eat that cost if a refi didn't go thru. That's not the part that I'm talking about.

What I'm talking about is that Amerisave shows the appraisal cost ($400) on the GFE as one of the costs that the lender's credit is calculated against, resulting in "Total Closing Costs" being a net credit of -$307.

But on their Truth In Lending disclosure, the appraisal cost and credit check are clearly shown to be non-reimbursed P.O.C. costs.

I asked their representative how I would be reimbursed for the appraisal cost at closing. He told me that I would not be reimbursed for it. I asked him how they could show that cost to be included against their lender's credit in the GFE if they weren't actually paying for it at some point. He said it was a Third Party Cost. I told him that I understood that, but the fact is they are representing it as a cost that is offset by their lender's credit, so I would expect to see that cost included at closing and if the lender's credit exceeded the total closing costs - including the appraisal - that I would be refunded the difference. He said they don't refund any credits.

When I asked BoxHomeLoans that same question, they told me that if there was enough lender's credit remaining after closing that they would send me a check for the difference - which under the terms of their GFE would be enough to cover the initial cost of the appraisal.
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Old 11-06-2012, 12:56 PM   #6
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I recently refi-ed with Quicken Loans. Only upfront cost was $170 for the notary who came to my house with all the paperwork.

Shades of the housing bubble, they did NO appraisal...
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Old 11-06-2012, 01:12 PM   #7
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I recently refinanced with Provident Funding, and they deal with it yet another way.
You pay $500 appraisal deposit and after successful closing it's returned to you.
On the HUD-1 the actual appraisal cost is shown ($455 in my case) and it's part of closing costs.
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Old 11-06-2012, 02:59 PM   #8
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I decided to back away from Amerisave. Sure, they were showing a $4200 lender credit but what good is that if they don't include some items in the actual settlement costs? I emailed them about this, and they emailed me back asking me to call them. Funny, yesterday they told me they preferred to communicate by email.

So I called and the processor tried to explain to me how to read a GFE and Truth In Lending disclosure. No thanks, I already know how and what I'm seeing is that your GFE is very misleading because you include the appraisal as a settlement item but then exclude it on the TIL disclosure.

I wish I could show you both of them, but the result is the GFE shows total closing costs to be a net credit of $300, while the TIL showed a net credit of $700. And they don't refund credits.

He then tells me that I could request to have the appraisal included as part of the settlement costs. I asked him to email that statement to me and he flat out said no, he couldn't do that.

That was it for me. I told him to cancel my application.
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Old 11-06-2012, 03:04 PM   #9
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Good decision. From what you have relayed they sound slimy.
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