How I Saved $9,206.86 in Just Three Days
“Being good in business is the most fascinating kind of art.”
I run a website for creatives, not a real estate column, so you might ask as you read on what’s going on? Think of this as a classical cut in the middle of a jazz album. To write this, I’m wearing my artist’s cap and my business bonnet alternately (one has a pair of metallic jangly bells and one has a calculator taped to it). If you’ll bear with me through the boring bits — and through the blatant departure from creative pursuits — you’ll find this article scintillating. Actually… “scintillating” might be projection on my part, since you didn’t save $9,206.86, I did.
I was refinancing a house (are you still with me?). The process began in January when I applied for the loan and ordered an appraisal (nice job, you made it to the end of the sentence). The lender whom I’ll call Lender One was the current lender on this property, so it made sense to refinance with them. However, when Lender One pulled my credit score, which was a respectable number, I only qualified for a lesser-tier loan package with mediocre rates and terms. That’s because the lender was now using a credit benchmark called FICO 8, and it’s a lot tougher to meet FICO 8 standards. So I stepped away and took time to increase my credit score and shop around for more lenient lenders. It all took a while. Fast-forward to the month of May when I not only got my credit score where it needed to be, I also found another lender with better terms. Instead of the 5-year ARM (adjustable rate mortgage) Lender One offered, I now qualified for a 10-year ARM (10 is better than 5).
That’s when I went back to Lender One’s account executive and told him, “I’d like to work with you, but Lender Two has a better deal on the table.” He replied, “We can beat that. With your new credit score, we have a 30-year fixed rate loan that we can do at the same rate and terms as a 10-year ARM.” According to the numbers he emailed me, I would only have to come up with $500 at settlement to close the deal. That was great!
“When someone makes you an offer, get them to write it out, email it, text it, prick themselves and drip it in blood. Whatever it takes, get it in writing somehow.”
And so it was that I finally said, “Let’s move forward.” About three weeks passed while they worked on my loan and by the first week of June we were approaching closing day. Then, just two days shy of closing, the Lender One rep emailed me saying I would have to come to the table not with $500 but with $5,884.38! Insert collective gasp here.
Everything about this was wrong, not just the numbers. Notice the cavalier attitude of the email? To me, what it actually says is: “Hey, I screwed up big time. I mistakenly informed you in May that it would cost you about $500 and it’s actually 11 times that amount. Furthermore, we’re only two days away from closing, so I’m pretending everything’s fine except for this tiny teeny eeensy teensy detail of coming up with $5,884.38.” If you’re going to be a piker, own up to it. The account executive had goofed by quoting terms based on the month of May’s rate when he was supposed to quote terms based on January’s rate — but that detail didn’t come out until a couple of communication exchanges later. He asked if I wanted to proceed. I did not. An hour after the first email, he sent me another: “The down payment was reduced to $3,302.29. Are you ok with that?”
Are you ok with that? Where was this Covey-like mantra coming from? Who was his communications coach? We’re removing four molars right now instead of the one we discussed. Are you ok with that? I told you forever but I found someone else. Are you ok with that? Furthermore, I was a little mystified what kind of elfish huldufólk were working their mysterious magic behind the curtain of Lender One. Poof! It’s $500! Whoosh! It’s $5,800! Shroppeggongg! Make that $3,300! So I was not okay with that. I felt like I was witnessing a bait-and-switch. To start all over or to apply to Lender Two would have been inordinately time-consuming, so I asked Lender One’s account exec if he would take up the matter with management. That was crucial. I asked him to request an exception given the circumstances of my case (I was prepared to take it up with management directly). The next day, management said yes exception granted and we were clear to close, this time with something between $1,000 and $2,000 coming to me. Money in my pocket vs. from my pocket.
I was eager to see all of this in writing. And so was my settlement agent at STA TITLE & ESCROW in Northern Virginia – an incredibly customer-focused and innovative title and settlement firm. It took what felt like an eternity for the lender to send over the preliminary settlement sheet. As we waited on it, I remembered an offer the Lender One rep had made in January (“since this is a refinance of one of our loans, you’ll get a break off the origination fee”), so I contacted my settlement agent and she handled it, representing my interests and reminding the lender to make good on the purported discount of about $1,500. The amount I signed off on Friday increased to a final number of $3,322.48.
My closing document. $3,322.48 due to borrower.
Had I acquiesced Tuesday to my lender’s 11th-hour adjustments, my refinance would have cost me $5,884.38. Ask people to ask — that’s all I did. Add to that the fact that communications were never confrontational or adversarial from start to finish. By Friday I was signing papers to walk away with $3,322.48. And I have to say, going from a deficit of $5,884.38 to a gain of $3,322.48 is a little intoxicating. Lesson: Ask, ask, ask. As my mother said, “It never hurts to ask” – and sometimes it’s downright lucrative.
