I've been waiting more than 6 months to be able to write this post! When I got laid off clear back at the end of February, the very first thing we decided to do to help stretch my severance and unemployment was to refinance our home loan and pay off our home equity line of credit (HELOC). I got laid off on a Friday, and the first place I went on the following Monday was the bank to see if it would even be worth it. We had about $20K on our HELOC, which I was paying off pretty aggressively (to the tune of $400-$1000 each month) before getting laid off, but which I dropped to paying just $100 month once I was laid off. Our mortgage was well below what our house was worth (thanks to having bought our place in 1995 before prices here went ballistic), our credit was sterling, and, having done a refi before, I figured it would be pretty straightforward. Get an appraisal, run it through underwriting, and awaaaay we go!
My first clue that this might take longer than expected was when they asked for our 401(k) and IRA statements, THREE years of tax returns, and an accounting of all the cash we had on hand (including in the cushions of the couch). Granted, if lending institutions had been asking for that much financial information all along, our economy wouldn't be in this predicament. Still, I found it a little much.
I figured that locking our interest rate for the standard 90 days would be more than sufficient, and we were hopeful that we could even reset the lock (for 30 days) if we found a better rate near the end of the process. Well, 90 days came...and 90 days went. Our loan officer said that we were in the queue for final underwriting and would "definitely" be signing soon, so the bank extended our interest rate lock for 30 days (at their expense). (June)
30 days later...we were still in the final underwriting queue! This is definitely the last time that the bank will have to extend our interest rate lock, our officer told us. Definitely. (July)
Somewhere along the line, our financial documents expired, so we had to cough up a fresh copy of my husband's pay stub, our 401(k) statements, AND our tax returns. Then, we were delayed because the appraiser failed to check off ONE checkbox on the property appraisal, and it took two weeks to track him down. By then, we were running out of time. This will surely be the last time we have to extend the lock, we were told. (August)
We were thrilled to finally get the "clear to close" in the middle of August. We even got a date for the mobile signer to come to our house. I thought it strange, though, when the person never called to confirm the appointment like we were told they would. About an hour before the signer was supposed to show, we got a call from our loan officer, who very sheepishly told me that we could not sign today after all because the appraisal had expired. Are you KIDDING me?!?!? A new appraiser came out, did an entirely new appraisal, and we waited some more.
FINALLY, on September 2 we got the clear to close again. However, the first appointment we could get to actually sign was yesterday, September 8, so the bank had to extend the lock AGAIN. In addition to paying to extend the interest rate lock four times (!), the bank had to pay for a second appraisal, and I am sure they incurred quite a few other "extra" fees as well. And, as a token compensation for our inconvenience, our loan officer got the bank to give us an extra 0.125 of a percentage point off of our interest rate. In addition, because we made so many more house payments than what we had anticpated while this was all in the works, we are getting about $3200 back instead of having to pay $700 in additional closing costs.
So, 6 months and 5 days later, was it worth it? Yeah. I'm no longer unemployed, but will be bringing in less money each month, so this will still help. Our payments are going to be lower, and we no longer have a balance on our HELOC. Figuring in the $100/month I was paying on the HELOC, we are saving close to $200 every month.
