I have a client right now that contacted me about refinancing. He wanted to get out of his interest only loan, a first and second. I took a look at the situation, and I honestly do not think the value is in the home to combine the two loans. Also, all of the costs (pre-paids/CC's) would equal about $11,000. After I did some research, I told him that it might be worth it to just pay a couple hundred each month on his loan, so he paying on the principle, rather than do a full refi, just to get out of the interest only feature.
That is when he told me that he was also talking to Bank of America, and they said they had no doubt about the value, and that they would do the refinance. With a $400 application fee, of course. I told him that I did not want him to be taken advantage off (up front costs in my mind, before knowing they could do the loan, are just wrong).
He agreed with me, and said he wants to go forward with me. So, I told him I would start the process, and it would all hinge on that appraisal. Now that I have done quite a bit of work on it, he is having second thoughts, about the cost, and the value of the home. I reiterated what I had told him in the beginning, and am waiting to hear back.
How many others have situations like this? What would you do?
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