My husband and I closed on our refinance this week. It's a 15-year fixed-rate loan at 3.75 percent.
Although we're only going to save about
It feels a little like free money, and after our mortgage interest deduction (assuming we're still able to qualify for it), it will be as if we're paying almost nothing to borrow these funds.
But the best part about refinancing again was to see some of the new rules the
As for making the process more understandable to consumers? Having just gone through it, I'd say there's a lot more work to be done.
What can you expect when you're closing on your mortgage loan? Here are some of the highlights from our own loan closing:
Expect to sign your name or initial every page
Our loan package (the collection of loan documents, disclosures, tax forms, etc.) was more than 80 pages long, I think. We had to sign just about all of the documents, and in some cases we had to initial virtually every page of the document.
Expect at least some of your information to be incorrect
Although the title company had access to much of my information, and other identifying information, my name was spelled incorrectly (several different ways) across the loan documents. On most pages, I simply corrected it, but that required me to initial next to the changes in addition to initialing the page at the bottom. But then we got to the HUD-1 form (the closing statement) and my name was spelled incorrectly there. And that caused a little bit of a snag, since you can't change anything on the HUD-1 form (ostensibly to protect the borrower). We signed the forms anyway, and the title company was going to redo the first two pages of the form and then attach the signature page. Of course, the fact that the title company can make that switch is a huge red flag and an opportunity for fraud.
Expect the numbers to be wrong
After we had signed all the documents, we noticed that the final numbers didn't match up. We had to work through the numbers with the loan broker to make sure that the numbers were correct. In our case, the amount that was listed for the payoff of our prior loan differed from the amount set forth in the letter from our lender. You should watch out for the key numbers, which are the interest rate, total loan amount, and costs and fees. Those should all match up with the numbers you were given.
Expect to go to a plain vanilla room in a leased office somewhere
Due to the prolonged housing crisis, many title companies have gone out of business, or simply closed their offices. Today, it's common to have closers meet at a rented office facility to sign and notarize documents. This feels strange and vaguely like you're committing fraud -- but you're not. It's just that title and escrow companies can no longer afford to have nice digs of their own in all the places they used to have them, or the people to staff them.
Expect to be confused by the "new" HUD-1
On the new HUD-1 form (the closing statement, lenders are supposed to be exact on their charges and fees. They're not supposed to come in more than 10 percent over what you've been quoted on some of the fees (but not all). Great. In our deal, that meant the title company charged us a flat
My sense is that the HUD-1 is a little better, but overall, financing and refinancing a home is confusing. You can initial all the pages you want, but if you don't read the document (and the title or escrow officer won't have budgeted time for you to spend an hour or two reading those 80 pages), you'll never know what's in them.
- Shopping for a Home When There's Too Much to Buy
- What to Expect When You're Closing on Your Mortgage Loan
- Finding Second Home Bargains
- America's 10 Slowest Appreciating Housing Markets
- The Costs of Retiring with a Mortgage
- Prepaying a Mortgage: When Does It Maske Sense
- Shorter-Term Mortgages Make Sense for Some
- Thinking About Refinancing? Get Moving
- 10 Historic Places to Retire
- Do You Live in a High-Debt City?
- How to Get a Government-Backed, Zero-Down-Payment Mortgage
- Housing Demand Evaporates As Stimulus Ends
- Home Prices Likely to Slide After Sales Plummet
- 9 Reasons to Choose a New Home Over a Resale
- What will happen to the housing market?
- Pay Off Investment Property or Pay Off Primary Residence?
- 9 Smart Ways to Come Up with Down-Payment Cash
- More Federal Help for Struggling Homeowners
- Home Builders Not Driving Economic Recovery
- Packing for a Move Is an Art Unto Itself
- An Expert Looks at the Future Of Real Estate
- How Financial Reform Affects Home Buyers
- 10 Best Places to Reinvent Your Life in Retirement
- Housing Market Takes Another Step Backwards
- When Buying Distressed Property Know All Liabilities That Come With It
- 3 Ways to Invest in the Real Estate Rally
- Will the REITs Rally Continue?
- Home Prices Improve But May Soon Begin Sliding
- Home Sales Rebound From Record-Low Levels
- Downward Pressure on Home Prices Mounts
- Dirt-Cheap Mortgage Rates: Here for How Long?
- 6 Reasons the Housing Market Hasn't Recovered
- Distressed Home Sales to Sandbag Housing Revival
- Home Sales Poised to Drop in Coming Months
- Did You Miss Out on 2010 Home Buyer Tax Credits? It May Not Matter
- New Home Sales Plummet to Record Low
- The Housing Market's Unexpected Drop
- Builders Break Ground on Fewer Homes
- Home Builders Grow Gloomy As Tax Credit Ends
- Housing Market Predictions Change with Lousy Housing Sales Numbers
- Homebuyer Tax Credit Deadline May Be Extended
- Home Repossessions Hit New Record High
- Applications Point to Slow Summer Housing Season
- Bank of America Program to Forgive Loan Principal for Some Borrowers
- Home Prices Have Further to Fall: Here's Why
- 10 Cities for Retirement Property Steals
- What Home Sales Jump Means for Economic Recovery
- Why Housing is Headed for Second-Half Headaches
- Mortgage Rates Are at Historic Low, but LIBOR Is Rising
- Unloading a Timeshare No Simple Task
- Loan Modification Nightmare Continues As More Americans Pay Their Mortgage Late
- How to Identify Ideal Vacation Rental Property
- 7 Ways to Avoid a Crummy Real Estate Agent
- Rules To Improve Credit History and Raise Credit Score
- Confused About New World of Mortgage Finance? You're Not Alone
- Underwater on Mortgage But Too Much Skin in Game to Walk Away
- 7 Reasons to Downsize in Retirement
- Investment Property Costs: Add These Real Estate Expenses to Your Budget
- Don't Make These Real Estate Investing Mistakes
- Don't Make These Real Estate Investing Mistakes (Part 2)
- 12 Hidden Costs of Homeownership
- Don't Sign Over Title Until Your Name's Off the Mortgage
- Quitclaim Deed Not a Way to Get Mortgage Modification
- Nine Ways to Make Your Home More Appealing to Buyers
- Loan Modification Angst
- Obama Housing Rescue Tackles Unemployment & Underwater Loans
- How Much House Can I Afford? Calculating Home Affordability
- Home Sales Flat Before Spring Buying Season
- More Homeowners Pursue Remodeling Projects
- America's Most Underwater Housing Markets
- Energy-Efficient Updates Help Homeowners Save Cash
- Home Buying Checklist: What Savvy Home Buyers Need to Know
- Social Networking for Realtors Mortgage Lenders Buyers and Sellers
- Home Affordable Program Failing Homeowners
- Rate of Home Price Declines Slows, But More Drops May Be Ahead
- The Future of Home-Price Appreciation
- What Tanking Home Sales Mean for Economic Recovery
- Home Foreclosures Approach Peak Range
Real Estate - What to Expect When You're Closing on Your Mortgage Loan
(c) 2010 Ilyce Glink