Can you walk away from refi before sign final papers

[niccig]

So they still won't increase appraisal of our house despite neighbour's house has 3000sq ft smaller lot and 170 sq foot smaller house all because...she has granite countertops. She put granite on her crappy old cabinets. And for that reason her smaller lot and smaller house is worth same as my house.

There are two other homes of similar size, 1 has updated bathrooms and 1 has pool/spa. So they sold at 20K more according to appraiser.

We have to bring some money to table for this refinance. I'm tempted to walk away and put that money into my kitchen (I can put granite on my cabinets, and update bathrooms and put in a hot tub (DH wants one)) and then see where things are in 6 months with house values and I think interest rates will still be low. At least then I'll have some updated areas of the house as well.

So annoyed right now. But I need to think this through with a clear head. If we did walk away, what repercussions would there be? I know we'll need to pay for appraisal...anything else?

Thanks.

[Pennylane]

Other than the expenses that you paid up front, you should be able to walk away free and clear. Although I'm sure you will get some pressure from the mortgage company.

Good luck,

Ann

[kaharris83]

We just did that with Amerisave. We got an awful apraiser and he really did a poor job, upon talking to other appraisers. We were out the $400 appraisal fee and that's it. Stinks but we were going to go from having no PMI to paying PMI which can be a hassle to try to get rid of so for us it was best to walk away. Sorry you're dealing with this. It stinks I know. All the home values around us increased by leaps and bounds and houses are selling for far more than they did a year ago yet our appraisal only increased by 5000. Made no sense. Frustrating.

[hillview]

yup you can walk away and just be out the initial fee you paid

[SkyrMommy]

yup you can walk away and just be out the initial fee you paid

:yeahthat: We stopped a refi last spring after an awful appraisal, comps that were used weren't really comparable and the appraiser was far, far too conservative. We then worked on updating a bath, fireplace, and some outdoor improvements over the summer.

New appraisel this fall was by a different company who really spent time finding great comps and really took time during the walk through and took detailed notes that were included in the write up. We're glad we stopped & restarted; even better rates, better appraisal and updates in the house are done and we were only out the cost of the initial appraisal.

[mytwosons]

I'm sorry the appraisal didn't come in higher. It's so frustrating!

[daisysmom]

I'm sorry the appraisal didn't come in higher. It's so frustrating!

I think we are about to walk away too for similar reasons. The only other thing that worries me a tad (aside from being out the appraisal fee and the application fee) is that he ran a credit check on us and that is recorded. Honestly I didn't think this was an issue but my dh says that it could raise a question if we want to do this in 6 months and someone then says "why was their a credit check run for you 6 months ago". I think it is explainable but that gives me a tiny but of pause. We might go back to our appraiser tho and explain and show him better comps.

[crl]

As far as the credit check goes, we just got a mortgage and shopped so we had three or four run within a week or two. The bank we went with just had us sign a statement that all those credit checks were mortgage shopping and it was no problem. I would think you could do something similar for a refi.

Catherine

[mommylamb]

That stinks. But, I think you're right that rates will stay low for a bit. Enjoy your granite!

[arivecchi]

Did you know that you can dispute an appraisal? I did this successfully when I first closed on my house in May. The appraiser did just a horrible job and I sent better comps over with a detailed explanation and they took them!

You can also request a second appraisal. You'll be out some money but it might be worth it if you know you just need a different appraiser who knows the area better.

We are closing on our refi today and I asked them to please get a better appraiser this time around. The difference this made was huge! This guy definitely picked the right comps.

[AnnieW625]

Unless you truly can't afford your mortgage I would do the home improvements. I know of a good general contractor in your area. Please PM me if you want his information. He does small and large contracts depending on his time.

[niccig]

They did review the appraisal. I think there's better comps, the appraiser gave reasons for why these houses either sold for same value or higher, so those won't change our value. I don't know if a different appraiser will view it differently. Isn't there some formula they use, I know there's less lee-way on the appraiser for how they value things.

To further complicate things, DH's work may be up in air. If we go ahead, we'll have less payment a month by about $1000, but we'll have used up big chunk of savings. I have started part-time work and DH has work opportunities on the side to generate more income, but that is still being discussed. He's supposed to get a bonus in April from his full-time job, that would bump savings back up, but he's not sure now about security of his work - they were supposed to get 2 projects that have fallen through as client put the work on hold.

If we don't go ahead with the refi, we'll still have that bigger payment and if DH does have to look for another job, it'll probably be at less salary and that bigger payment won't be good, but we'll have more savings to tide us over if we need it. And with his work looking the way it is, I can't see us doing work on the house right now, so probably won't update things.

And if this side business of DH takes off, DH will want to work in that full-time and that means self-employed and more difficulty to refi. But we don't know how far in the future that will be.

Gah....I just don't know what we should do. Any decision we've made with this house has turned out to be the wrong and we've paid for it later.

[sste]

Oh no, no great advice over here but I am sorry you are dealing with this!

If bringing money to the table would deplete your "emergency reserve" at a time when your DH's job might be somewhat less secure than normal, I would hesitate to do that. Could you still live for 6 months on your savings if you went through with this refi?

[AnnieW625]

I would look on the bright side that even though you have to bring some of your savings to the table now vs. needing them in the future I think by using them to lower your mortgage now you might be in a better place if for some reason your DH is between positions in the future you have the security of knowing that your mortgage will be $1000 less per month.

[niccig]

If bringing money to the table would deplete your "emergency reserve" at a time when your DH's job might be somewhat less secure than normal, I would hesitate to do that. Could you still live for 6 months on your savings if you went through with this refi?

No. Not quite. If DH's bonus comes through in April, yes we could.


I would look on the bright side that even though you have to bring some of your savings to the table now vs. needing them in the future I think by using them to lower your mortgage now you might be in a better place if for some reason your DH is between positions in the future you have the security of knowing that your mortgage will be $1000 less per month.

DH told me it's more than $1000 as the property tax and insurance will be rolled into that lower payment and currently we pay those separately. So it's more like $1500 a month.

As for DH needing to get a new job. We just don't know what will happen. If they get 2 new projects, they're fine for next year. Other people have gotten work, so he will get it a job somewhere or he could go freelance - though probably it would be a lower rate than he is now. And you're right, a lower payment would be very nice in that scenario.

[codex57]

YOu can walk away. You can also consider another broker and see what they can do. Different companies use different appraisers, underwriters, requirements, etc. If you walk away, they typically charge you a paperwork fee of around $500 but you may have paid that already.

[sste]

Oh that it tough, I def. think you should explore all other options as PP are mentioning.

I am not asking you to answer this on a public board (!) but just to think about. If it was a worst-case scenario and your DH lost his job or his income plummeted and there was no bonus in April, would you have another source of funds. Could you borrow the type of money you would need from family? Can you open some sort of line of credit (I don't think these are easily available anymore but I am not up on this). I can see why the big cut in costs is highly appealing . . .

[crl]

Is your current mortgage the orginal one? If you have a loan that was for a home purchase, in California, you have the right to walk away. Just something to keep in mind as you lose that with a refi.

Catherine