I'd like to refinance with no cost -- where do I go to do that? :-) Our last attempt cost us $400 for an assessment that determined we had no equity in our home due to the housing crash.

Get the good faith estimate of closing costs in writing. Sometimes lenders make up for a lower rate by charging higher fees up front.

melle, was the $400 maybe for an appraisal? Lenders must have an appraisal to be sure that the collateral (your house) is worth more than the amount they're lending on it. Once the appraisal is done, you can't undo it; the appraiser has done his/her work & has to be paid.

& the same "get the good faith estimate" applies, maybe especially, to re-finance loans with "no closing costs".

Oh, yes, is was for appraisal! I couldn't remember the right word. We definitely knew we'd have to pay for the appraisal, just couldn't believe it was so bad. That was several years ago.

No cost refi's - There are multiple fee structures for loans. For most loans today you have to pay for an appraisal if they are necessary. Sometimes appraisals are not needed for refi's. For a loan with buyer paid closing costs the fees of loan closing are paid by the lendee up front, in return for this they get a better rate. Often these upfront fees are funded by the loan itself (rolled into). Essentially these loans are at a favorable rate but you are borrowing slightly more money to pay for the closing costs. There is also no closing costs refi's. In this case the bank attempts to make up the difference in interest rate spread, by charging a slightly higher interest rate (usually about a half a percent).

It is important to understand that a no closing cost refi is a great way to keep your mortgage rate within a half percentage of current. I know someone who refinanced every three or four months as rates were coming down. Since he did't require an appraisal and he was doing no cost refi's he just kept on taking advantage of lower rates. They are also very good if you plan on moving sooner rather than later. But that extra half percent or so adds up over time, so if you don't think rates will continue going lower, and you plan on staying in the house a refi with closing costs are usually better.

As to the OP I would not go with a bank that gave you a rate that was 1.84% higher than current. Rates haven't changed that much in the last 120 days, so they were either taking advantage of you to begin with or your credit score has improved.

Hey Sylvia! I learned that lesson too when trading for my Miata. I didn't know they could change around where the money flowed and ended up getting the loan for the amount I wanted, but less for my trade in. Another lesson I learned, sell the trade in outright and/or save up and pay cash. Still have that Miata, so it doesn't really matter what I paid 20+ years ago, since it's all been free for a llllooooonnnnggg time :)

After that stunt, there was no way I'd work with that lender. The loan I am going with is my realtor's go-to guy. He is very down to earth and I just have a gut feeling about him. He wasn't trying to beat out their rate at all. He's so good, he asked me what payment I was looking for and after he'd run all the numbers, including fees, PMI, taxes, insurance... it was right where I thought it'd be. So I trust him. I don't trust a lender that "suddenly" can offer something more.

Did you find a house??? :)

Preapproval is necessary in our market--that's the loan issue. It's such a hot market, you need every edge you can get. So no house yet... I have a friend who is looking in the opposite place of me, south and east of Nashville (I'm west and some north), and she has the same problem I have, no houses! You can't even see a house before it goes on the market and be able to get it. We're about to start knocking on people's doors. "Excuse me, but are you moving any time soon? Would you please consider me as the next home owner if you do?" UGH! You cannot find any houses here.

Bummer....was hoping you fell into something! Hang in there! It's a battleground out there!