Several weeks ago I started shopping for my mortgage refinancing into 15-year since the rates were at the lowest point for over the last 18 months. My current 20-year mortgage rate is at 3.75% and my goal was to shorten my amortization and lower my rate. I received quotes from Bank of America, Chase and Better.com. I had to eliminate Chase pretty early in the process since they were the least competitive. After I talked to Chase’s mortgage specialist several times it was clear they won’t negotiate.
It came down to Bank of America and Better.com. Bank of America online application process was very easy. It helped that I am a customer and being a customer certainly helped negotiate a better deal. Initially both lenders have offered 3% fixed rate for 15 years. The only difference was in closing costs. Initially Better.com closing costs were lower, but when I presented their offer to BofA, they knocked down their origination fee to $854 compared to Better.com’s $1,137.
- Bank of America total estimated closing costs of $3,636
- Better.com total estimated closing costs of $3,979
What really sealed the deal was that during the negotiations Bank of America offered me Appraisal Waver option. In other words, they won’t need to do the appraisal on my property. The estimated value of my house was $500,000 and refinancing amount of $342,500 brought down my LTV to 68.5%. I presume bank will use my county’s tax assessed value and will apply some kind of multiplier and as long as LTV according to their calculations is below 80% they are fine with no appraisal. BofA advised me that they still had to include an appraisal fee line item in my loan estimate, but at the closing this fee won’t be collected. Also when I locked my rate, I din’t have to pay that appraisal fee.
My 3% fixed rate with Better.com has already been locked and appraisal fee of $550 has been paid. Before I locked the rate I confirmed that appraisal fee is refundable as long as the actual appraisal hasn’t been completed yet. Now it was time to test Better.com’s customer service. I called Better to let them know that I chose a different lender. I was very impressed and nicely surprised how easy it was to cancel my loan application and get my appraisal fee refund.
My closing is in two weeks and I can’t wait to start paying slightly higher monthly mortgage payment knowing that over the life of the loan I will save $71,853.
