Four steps to a stress-free refi
If you're applying in person, you can bring in the
bank statements, pay stubs, tax returns and other paperwork when
you apply, and if you're missing a critical document, you can rush
home and get it. Not so if you apply over the phone or the Web,
as IndyMac's consumer customers do.
When you work with a remote lender, try faxing or
e-mailing scanned documents if you can, Rich recommends. Send bulky
documents by overnight courier. Make sure you have the correct name
and address of the person who is to receive the papers.
Vella says refinancing customers often forget two
critical pieces of information. First, they sometimes forget to
bring in their hazard insurance documents. At the least, borrowers
should have the name of their insurer and the policy number. Second,
many lenders want to verify the last two years of each borrower's
employment. That means that if you have taken a job with a new employer
in the past two years, you need to bring the address and contact
name and phone number of your previous employer.
Perry hastens to point out that some lenders, including
Countrywide, allow current customers to apply for refinancing with
Get the right loan lock
Many lenders are telling refi customers that their loans
will take up to 60 days to close. Other lenders stretch their estimate
to 90 days. If you want to lock at today's low rates, make sure
the lock extends at least up to the lender's estimate of how long
it will take to close the loan.
"A consumer needs to know what is being
guaranteed with the rate lock," Vella says. If you lock for
30 days and the lender takes 60 to get to closing, you don't really
have a rate lock. "I would recommend that the borrower not
lock in less than 60 in this rate environment because it is taking
longer to close," Vella says.
It is taking a long time not only because loan offices
are busy, but also because appraisers are swamped and so are title
agents and title attorneys. Reserving a table in a title office
is like booking a reservation at Manhattan's hottest restaurant:
It's hard to get in, and you might have to settle for a less-than-ideal
time of day.
Stay in touch, but don't pester
With the delays and the worries over paperwork, borrowers
get antsy when they haven't heard from their lenders in a while.
They want to know what's going on with their loan. "To call
every few days probably doesn't make things go any faster,"
Vella says diplomatically.
She suggests that you discuss with the lender or
broker how often you want to be contacted, even if it's just to
hear that the lender is waiting for the appraiser to visit the house.
If you want a phone call every Friday, say so, Vella says. If you
want a phone call every time something significant happens, say
Ask for a timeline of the loan -- a document that
spells out when each step is expected to be completed. "It
relieves stress on the part of the borrower," Vella says.
Rich says "the best of the best of the loan
officers" give their customer's timeline routinely, without
Getting a timeline from the lender might not get
your loan closed before your next-door neighbors who applied on
the same day, but it helps you understand what's taking so long
-- and that can be the difference between a stressful and a stress-free