Relatively Painless Experience
As I mentioned in a prior post http://lifeinvestmentseverything.blogspot.com/2012/07/fun-with-housing-finance.html I have recently been going through a refinance on my home with www.boxhomeloans.com in order to swap an ARM for a 30 year fixed rate loan at what appear to be historically low interest rates. The mortgage process is still time consuming and requires attention, but it is far less paper intensive than in years past.
I have to give Box Home Loans credit for moving the process along and keeping me informed throughout the process. After uploading and signing almost everything electronically, the appraisal was completed shortly thereafter and with an appraised value of 10% in excess of my purchase price I was good to go. Some additional documentation was required a few weeks into the porocess, but once again I was able to do everything quickly and electronically. The closing happened (barely) within the lock period, and this took some logistical effort on Box' part because I was actually out of the state on business travel the week the closing was scheduled. Box found a notary where I was travelling and was able to have me sign and review all of the documents in time to have them overnighted to my wife so that she could sign them in time to avoid breaking the lock. Since rates have risen a bit since I locked my rate, I did not want to have to refloat and accept a higher rate.
All this rosy stuff aside, this only went as smooth as it did because of a few factors:
- I fit in the"box": my situation was well within the underwriting parameters for conforming Agency mortgage originations. If this had not been the case, either I would have had to take steps to fit in the box (by paying down the loan balance, paying off other debt, etc.), or I would have had to go through a much more expensive and troublesome process that may not have been worth pursuing since this was an opportunistic refinance.
- I didn't need to close this loan in order to move. This was a refinance. If the loan process had broken down at some point and fallen through, all I would have been out was a few hundred dollars in expenses. If I were depending upon the closing of this loan to buy my new home (as was the case last summer when I moved in), this process would have required a lot more close attention and the stakes would have been a lot higher.
- I was fortunate in that the value of my property rose. If the appraisal value had instead moved down over the last year I would have had to either partially pay down the loan to get the loan to value down to 80% or give up on the refinance.
If you have an existing mortgage and you can qualify for an Agency mortgage, watch rates closely. Nobody knows how long rates will stay as long as they are, but the process is fast and simple enough that you should be able to lock in an ultra-low rate without a lot of fuss.