2011
3 Bank of America Refinance Attempts, 3 Dramtically Different Outcomes
Three times in the last month, I’ve applied for HARP 2 through my current lender, Bank of America, and received 3 outcomes.
Today I heard that HARP 2 was not available through Bank of America until December 1st, 2011. So, I called back to see if, now that HARP 2 was available, if I would get a more appropriate outcome.
On my third attempt, Bank of America told me that as of December 13 (today’s date), they have not released the HARP 2 program, and that they “do not have a date as to when it was going to show up.”
In all 3 refinance attempts I specified that I wanted to refinance through the new HARP 2 program, and none of the 8 or more people I spoke with mentioned that HARP 2 had not been released. According to the most recent representative I spoke with, each attempt to refinance through Bank of America would have been through the original HARP program. But each attempt yielded dramatically different results.
3 Different Outcomes Breakdown
Here’s the breakdown of the 3 attempts, starting with my current scenario, for reference, all using 30 year fixed as a consistent baseline.
Current 1st Mortgage / 6%
$ 988 Principal
$ 300 Escrow
$1288 Total monthly payment
1st Attempt — Not Approved
Early November, 2011
I was not approved to refinance through the HARP program at Bank of America, my current loan holder.
2nd Attempt — 5.375%
November 21, 2011
1. I qualify for the loan at 5.375, 30 year fixed, but the percentage is not that great, they say, because of my 2nd mortgage.
2. While the appraisal fee of $425 not required, there are still over $3000 in closing costs.
3. It will take approximately 2 years to recoup the refinance costs.
$ 382 1/4 of a discount point
$1175 Bank of America’s total fee
$1567 3rd party fees
$3124 Total closing costs
$ 460 Out of pocket cost
$ 856 Principal
$ 264 Escrow
$1120 Total monthly payment
$ 168 Total monthly savings
3rd Attempt — 4.5%
December 13, 2011
1. I qualify for the loan at 4.5%, 30 year fixed.
2. Closing costs are $691 less than the second attempt.
3. It will take 4.6 months to recoup the refinance costs.
Discount points are not mentioned in the conversation.
$191 Discount Points
$866 All lender fees (Bank of America’s total fee)
$1567 3rd party fees
$2433 Total closing costs
$ 0 Out of pocket cost
$ 775 Principal
$ 264 Escrow
$1040 Total monthly payment
$ 248 Total monthly savings
Loan Amount Breakdown
$148,484 Current total loan amount
$1,380 Current escrow balance
$153,000 New total loan amount
$1887 New escrow balance
$188 Interest
$4516 Total loan increase
In Conclusion
The third attempt looks like what I should have been offered all along. I’m happy to finally have received a more appropriate interest rate, but am more confused than ever about actually Making Sense of HARP.