Posted on: 28th Mar, 2011 09:31 pm
hello:
i bought a home in september. at the time i was locked into a rate of 4.875%. i was going to be charged a buy down fee to lock at 4.5% (my desired rate). because i was uncomfortable having a pmi, i debated holding off to buy until i had the 20% to put down. my mortgage broker suggested that i go ahead and go through with the lock and when the house appraisal comes back, if it appraises high (showing more than= 20% equity, which it appraised for $100,000 more than i bought it for) then they would do a no-cost refinance for me in 3 months to remove the pmi at the same rate that i lock for in september. well, rates fell thereafter so i asked to have the rate unlocked and i floated and ended up locking at the then current market interest rate of 4.5%. however, my broker still charged me the "buy down" fee (even though the current market rate was 4.5%). when i asked him if i was being charged to buy down to a rate that was the current market rate, he told me no that he had to charge me that fee now in order to ensure that i get that rate in december otherwise it was not financially beneficial to his company to do the no-cost refi. prior to signing my paper, i reviewed my "good faith estimate" they gave me and it showed i was buying down the rate and again he told me that i was not buying down but it was for our december refi. now that my loan has closed and i go to him to refi, of course, the current interest rates are no longer 4.5% and he is, of course, not able to offer me that rate. so i asked him why i was charged the "buy down" fee if i was not getting that rate and he said because i bought down the rate. my question is: 1)can he charge me to buy down to current market rate? i mean if the rate the day we locked was 4.5%, can he charge me to buy that rate? 2) my whole point of doing was to remove the pmi. can the pmi be removed? i have gone above my mortgage broker to his boss and am getting the run-around and no one is answering my question. i don't know what to do. i feel i was misled to make the deal. i had offered to take my business to another broker before the first loan had locked for better rates but he assured me he would give me the same rates i was guaranteed by the other company. i have emails supporting that claim. i don't have emails specifically stating the 4.5% rate guarantee in december, only emails eluding to it.
i bought a home in september. at the time i was locked into a rate of 4.875%. i was going to be charged a buy down fee to lock at 4.5% (my desired rate). because i was uncomfortable having a pmi, i debated holding off to buy until i had the 20% to put down. my mortgage broker suggested that i go ahead and go through with the lock and when the house appraisal comes back, if it appraises high (showing more than= 20% equity, which it appraised for $100,000 more than i bought it for) then they would do a no-cost refinance for me in 3 months to remove the pmi at the same rate that i lock for in september. well, rates fell thereafter so i asked to have the rate unlocked and i floated and ended up locking at the then current market interest rate of 4.5%. however, my broker still charged me the "buy down" fee (even though the current market rate was 4.5%). when i asked him if i was being charged to buy down to a rate that was the current market rate, he told me no that he had to charge me that fee now in order to ensure that i get that rate in december otherwise it was not financially beneficial to his company to do the no-cost refi. prior to signing my paper, i reviewed my "good faith estimate" they gave me and it showed i was buying down the rate and again he told me that i was not buying down but it was for our december refi. now that my loan has closed and i go to him to refi, of course, the current interest rates are no longer 4.5% and he is, of course, not able to offer me that rate. so i asked him why i was charged the "buy down" fee if i was not getting that rate and he said because i bought down the rate. my question is: 1)can he charge me to buy down to current market rate? i mean if the rate the day we locked was 4.5%, can he charge me to buy that rate? 2) my whole point of doing was to remove the pmi. can the pmi be removed? i have gone above my mortgage broker to his boss and am getting the run-around and no one is answering my question. i don't know what to do. i feel i was misled to make the deal. i had offered to take my business to another broker before the first loan had locked for better rates but he assured me he would give me the same rates i was guaranteed by the other company. i have emails supporting that claim. i don't have emails specifically stating the 4.5% rate guarantee in december, only emails eluding to it.
Hi Kul,
Welcome to Mortgage fit,
It is obvious that you will feel duped...because they haven't kept their word...But I need to remind you a small thing on their side..The person who dealt with you is an employee of a firm....he/she might have done this in order to complete his her monthly target of business..you can no blame an employee..But surely you can file a complaint against the company with the consumer bureau.....All the businesses try to work for the profit..If the firm won't get any profit in your deal then surely they will not make the deal.So in order to keep their some profit margin they might have done this...Obviously the manner which they have accomplished it is really not adorable....I think you got my point what I wish to convey....
Bottomline is you should file a complaint against the company with respected authorities..
Feel free to ask any further query if you have...
DIPA
Welcome to Mortgage fit,
It is obvious that you will feel duped...because they haven't kept their word...But I need to remind you a small thing on their side..The person who dealt with you is an employee of a firm....he/she might have done this in order to complete his her monthly target of business..you can no blame an employee..But surely you can file a complaint against the company with the consumer bureau.....All the businesses try to work for the profit..If the firm won't get any profit in your deal then surely they will not make the deal.So in order to keep their some profit margin they might have done this...Obviously the manner which they have accomplished it is really not adorable....I think you got my point what I wish to convey....
Bottomline is you should file a complaint against the company with respected authorities..
Feel free to ask any further query if you have...
DIPA
That's what I was afraid of. Thank you. I'm also exploring the homeowners protection act because my home did appraise high enough to reach over 20% but my understanding is that most companies want you to have had the loan for 2 years before permitting a cancellation. I do understand what you're saying, it's really frustrating and infuriating as my PMI is $350/mo. Thanks again
Hi KUL,
Most of the lenders do have pre-payment penalty charges, if you pay back all the sum either in cash or through refinance...
If you think that approaching a new lender will be good choice,I won't say it is....
You can continue with dispute in the consumer bureau....by that time 2 yrs (hopefully) will be passed and you can surely refinance with other company....
If you have email records with you,you can surely have a good standing in this case...
Feel free to ask any further query if you have....
DIPA
Most of the lenders do have pre-payment penalty charges, if you pay back all the sum either in cash or through refinance...
If you think that approaching a new lender will be good choice,I won't say it is....
You can continue with dispute in the consumer bureau....by that time 2 yrs (hopefully) will be passed and you can surely refinance with other company....
If you have email records with you,you can surely have a good standing in this case...
Feel free to ask any further query if you have....
DIPA
What is your mortgage amount?
What is your appraised value?
Do you have any other debts with monthly payments of any size on the credit report?
You may be able to do a cash out refincne on 15 year fixed. Rate is 4.500% or lower. If you can consolidate some debts and get rid of PMI, the resulting payment may not be too much compared to your overall monthly payment now.
Just a thought.
Do not refinance with the same people.
What is your appraised value?
Do you have any other debts with monthly payments of any size on the credit report?
You may be able to do a cash out refincne on 15 year fixed. Rate is 4.500% or lower. If you can consolidate some debts and get rid of PMI, the resulting payment may not be too much compared to your overall monthly payment now.
Just a thought.
Do not refinance with the same people.
My Mortgage amount is $490,000. I appraised for $625,000. I do have a rental home that I bought at "the height of the market" which of course is under water. However, I am not in default or ever been late on payments for it. Otherwise, no real debt.
Thanks for the additional information.
Whatever I had in mind does not work with those numbers.
The mortgage you have is over $417,000, so, it falls into the jumbo category.
You are right at 80% of value now.
You have no other debts to consolidate and make 15 year fixed a possibility that would keep total monthly paymens around the same as now.
Sorry, I have nothing else to suggest.
Just one last question. That property would not happen to be in New York State? That is the only state that bases PMI on the appraised value, not the lesser of the appraised value or the purchase price.
Whatever I had in mind does not work with those numbers.
The mortgage you have is over $417,000, so, it falls into the jumbo category.
You are right at 80% of value now.
You have no other debts to consolidate and make 15 year fixed a possibility that would keep total monthly paymens around the same as now.
Sorry, I have nothing else to suggest.
Just one last question. That property would not happen to be in New York State? That is the only state that bases PMI on the appraised value, not the lesser of the appraised value or the purchase price.
The Home is in California.
thank you for your input and direction. I do have a meeting with a senior member of the mortgage company to "see what happened" and what my "options are". To me, what seems to be black and white into what happened, is not so clear to the mortgage company senior. We'll see.
Thanks again
thank you for your input and direction. I do have a meeting with a senior member of the mortgage company to "see what happened" and what my "options are". To me, what seems to be black and white into what happened, is not so clear to the mortgage company senior. We'll see.
Thanks again
That meeting is a step in the right direction.
Good luck!
Good luck!