Posted on: 15th Sep, 2011 09:11 pm
hi. when i received lender's refinance forms on a 5yr arm, i thought the closing costs on the application appeared much higher than what we had been discussing. there was no breakout or detail of how they got the estimated closing costs. also the apr was way too high. it's a 2.5% arm, but the apr says almost 3%! seems much too high unless there are a lot of additional costs embedded in the apr that he hasn't told me about.
i called the lender to ask, he said basically 'don't worry about those closing costs and apr figures they aren't accurate, they include some things that won't actually be costs to you, e.g. a year's worth of property insurance' 'also the apr is based on current index plus margin, rather than the 2.50% arm rate (fixed for the first 5 years).
foolishly, i signed a mortgage application (including several forms) and returned it. now i'm kicking myself.
before signing the forms, i had discussed the issues via email, and i think i'm pretty well covered by the email trail.
after signing the forms, i requested revised forms with corrected figures, but the lender seems to be ignoring me.
so today i emailed him 'consider my application retracted' with explanation.
i haven't paid anything. if it matters, i didn't agree to use the lender's title company, so it's impossible that any title work has been ordered or done. and i didn't accept lender's request to arrange an appraisal yet so that hasn't been ordered yet either.
questions: do i have any legal responsibility to the lender? can lender force me to close? what's the best way to end this silliness? i want to start over with somebody i trust. thanks!
i called the lender to ask, he said basically 'don't worry about those closing costs and apr figures they aren't accurate, they include some things that won't actually be costs to you, e.g. a year's worth of property insurance' 'also the apr is based on current index plus margin, rather than the 2.50% arm rate (fixed for the first 5 years).
foolishly, i signed a mortgage application (including several forms) and returned it. now i'm kicking myself.
before signing the forms, i had discussed the issues via email, and i think i'm pretty well covered by the email trail.
after signing the forms, i requested revised forms with corrected figures, but the lender seems to be ignoring me.
so today i emailed him 'consider my application retracted' with explanation.
i haven't paid anything. if it matters, i didn't agree to use the lender's title company, so it's impossible that any title work has been ordered or done. and i didn't accept lender's request to arrange an appraisal yet so that hasn't been ordered yet either.
questions: do i have any legal responsibility to the lender? can lender force me to close? what's the best way to end this silliness? i want to start over with somebody i trust. thanks!
The act of combining several loans or liabilities into one loan. Debt consolidation involves taking out a new loan to pay off a number of other debts. Most people who consolidate their debt usually do it to attain a lower interest rate, or the simplicity of a single loan. What you think?
:idea:
:idea:
you are under no obligation.
Thanks Tom. Hope I can post a couple of followup questions?
1. I don't understand why my lender is being mysterious about closing costs. Am I being unreasonable to want a breakout of the closing costs, and to be able to agree with the itemization of closing costs?
2. I'm very dubious of lender's statement that 'the APR is based on current value of the index plus margin'. Neither is relevant for the first 5 years since it's a 5-year ARM. Does RESPA/TILA allow such an odd calculation of APR?
I like the rate, but am having a hard time given the quoted APR is so crazy high relative to the fixed 5-year rate.
Thank you.
1. I don't understand why my lender is being mysterious about closing costs. Am I being unreasonable to want a breakout of the closing costs, and to be able to agree with the itemization of closing costs?
2. I'm very dubious of lender's statement that 'the APR is based on current value of the index plus margin'. Neither is relevant for the first 5 years since it's a 5-year ARM. Does RESPA/TILA allow such an odd calculation of APR?
I like the rate, but am having a hard time given the quoted APR is so crazy high relative to the fixed 5-year rate.
Thank you.
closing costs should be disclosed early in the process and should not change unless desired by the borrower.
you are not being unreasonable
http://www.mtgprofessor.com/tutorial_on_annual_percentage_rate_%28apr%29.htm
Here is a good article on APR. maybe this will help
you are not being unreasonable
http://www.mtgprofessor.com/tutorial_on_annual_percentage_rate_%28apr%29.htm
Here is a good article on APR. maybe this will help
Thanks Tom. Have a great day.
The APR is one of the most meaningless and useless figures. The industry is actually discussing eliminating the use of the APR.
It is especially misleading with ARMs.
With ARMs, the APR by regualtion is calculated at the starting Index plus Margin.
You should forget the APR and simply understand the rate and costs and fees. It seems they have not been explained to you and after several attempts to get answers, no one has answered you.
You are correct in wanting to work with someone who will answer your questions.
It is especially misleading with ARMs.
With ARMs, the APR by regualtion is calculated at the starting Index plus Margin.
You should forget the APR and simply understand the rate and costs and fees. It seems they have not been explained to you and after several attempts to get answers, no one has answered you.
You are correct in wanting to work with someone who will answer your questions.
Thanks John. Very helpful. Hard to imagine APR is actually calculated that way, but I accept your answer.
Now if I could only get comfortable on the TIL closing costs.... lender says those are overstated because the rebate that he is offering does not show up in costs. Do you think that is likely?
He says 'ignore the TIL closing costs and look to the GFE'. Does that make sense to you?
Thanks again.
Now if I could only get comfortable on the TIL closing costs.... lender says those are overstated because the rebate that he is offering does not show up in costs. Do you think that is likely?
He says 'ignore the TIL closing costs and look to the GFE'. Does that make sense to you?
Thanks again.
All I can tell you is to look at a list of all costs and prepaid items and look at the rebate.
Costs and prepaids minus rebate = what you are paying whether you are paying out of pocket or including in the new loan amount so you do not pay out of pocket.
Costs are your true costs--appraisal, title, lender fees, recording mortgage, title
Prepaids are not costs. They are things you pay whether you refinance or not--property taxes, home insurance, mortgage interest. These are whatever they are to set up escrow accounts, etc with the new mortgage.
What you really care about are the COSTS
I always ignore the TIL and look at the GFE, so, that makes sense to me. I can explain the TIL if anyone asks, but, to me it is next to useless.
Costs and prepaids minus rebate = what you are paying whether you are paying out of pocket or including in the new loan amount so you do not pay out of pocket.
Costs are your true costs--appraisal, title, lender fees, recording mortgage, title
Prepaids are not costs. They are things you pay whether you refinance or not--property taxes, home insurance, mortgage interest. These are whatever they are to set up escrow accounts, etc with the new mortgage.
What you really care about are the COSTS
I always ignore the TIL and look at the GFE, so, that makes sense to me. I can explain the TIL if anyone asks, but, to me it is next to useless.
I started a HARP refi on my house 5 1/2 months at Freedom Mortgage . Nothing has happened. Even after several phone calls being passed from persons and departments. My last call I told them I was retracting my loan request but, feel I need to follow up with a certified/ nortarised letter. Is there any letter templet for this I can use? I've looked on the internet but could not find anything for this. Any help?
Hi Michael!
Welcome to forums!
I haven't heard of any such letter. Nevertheless, you can contact your attorney and ask him to draft such a letter for you. He may be able to help you.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
I haven't heard of any such letter. Nevertheless, you can contact your attorney and ask him to draft such a letter for you. He may be able to help you.
Feel free to ask if you've further queries.
Sussane