Updates to a couple popular no closing cost mortgage programs

I know that I have posted in a LONG while, but we’ll see if I can’t change my frequency. First though, an update on a couple programs.

Chase: Chase is still offering this program. They are still sending out the overnight letters and closing deals.

There is still updates being posted to Fatwallet's thread about the offer.

Wells Fargo: Well, it's no longer called the 1-2-3 Easy Refi program. They are still calling it the "Home Affordable Refinance." The weird thing is that a coworker of mine got the 1-2-3 program though and was able to refi for free about six months ago. Maybe because I already took advantage of the program that they are not making it available to me? Maybe it's also because there's a timeframe to how often you can use it? I don't know the answer...if you do though, I would be happy to hear what you have to say.

As for the other banks, I don't know the status of their programs although Fremont Bank is still active.

I'm also going to be discussing some other lenders I've run into also in a future post, stay tuned.

Update to Wells Fargo's No Closing Cost Mortgage

Folks, I called Wells Fargo tonight because mortgage interest rates have fallen again and just wanted to see what the rate on the no closing cost option was, because after all, I can seeing as how I have no skin in the game in regards to closing costs, and I was told that Wells Fargo did away with their no closing cost mortgage program, the internal program they used to offer.

The only available option left for a no closing cost mortgage through Wells Fargo is the "Home Affordable Refinance" program that was instituted to help out underwater home owners. This program appears to be tied to the federal government and is one of the many programs they have going trying to help out home owners. This does not appear to be a mortgage modification program, but instead a straight up refinance program, but you don't have to pay any closing costs for this program. To determine if you qualify for this program, visit the eligibility questionnaire to see if you qualify.

While I am disappointed that this program is no longer available via Wells Fargo, there are other lenders out there that offer similar programs, like the option offered from Fremont Bank and other banking institutions. My goal with this website is to find those lending institutions and highlight the program highlights so that people can easily find lenders that offer these programs. If you know of a program, let me know so we can spread the word.

UPDATE: After further 'investigation' on my part, it appears that the program is still alive and well. They have just tightened the requirements to qualify for this program. You just need to call them and find out what those requirements are and see if you qualify.

My Wells Fargo No Closing Cost Mortgage Refinance

I know it's been a while since I last posted, but I just wanted to say that my mortgage with Wells Fargo and their no closing cost mortgage went uneventfully. I do have some comments to share about them that I thought was frustrating.

I applied sometime at the end of March I believe. The process was relatively painless except for the fact that I felt like there was NO outreach from WF and my refi. I had to keep calling Wells Fargo's call center to find out what they needed, what I needed to do, anything to keep my process rolling. I did not even speak to my loan processor one time. This is definately NOT for the consume who needs their hands held to complete the refinance process.

In the end however, I randomly received a package from WF with my closing documents in it. There was two packets in the package that I received. Both of them were the same thing, but one had a note that the package was for my records, and the other packet was the one to be signed and then sent back to Wells Fargo for them to process. Although I was expecting a package, it was definately not like, it's supposed to be here on such and such date, it just appeared via UPS, not to be confused with USPS.

I had to take the package that needed to be signed to a notary, then sent back in the prepaid return package and then dropped off for UPS to send back to Wells Fargo. I didn't want to pay any notary fees, because I'm a frugal individual, and ended up calling one of the Wells Fargo branches here in town. At first, I would need an account to get the notary service for free. Fine, I'll slap $25 in an account to ge the service for free. Then I found out that if the documents are Wells Fargo documents, they would do it for free! Yeah, that's what I'm talking about! I drove my happy butt to the branch and signed and was out the door in about 20 minutes.

I placed the package in the envelope and dropped it off at an UPS drop site and was done. I again, didn't know how long the payoff would take, but I checked yesterday and the payoff has apparently cleared my old mortgage lender because the balance is $0.

I now am waiting for refunds from my old lender for my escrow balance and any overpayment that may have occurred to account for interest expenses that were missed. I am also awaiting for an account statement so that I can setup online access via Wells Fargo's website and then I'll be happy.

In the end though, I was expecting a little more hand holding than occurred only because mortgages are large transactions and every where else you get a mortgage, the people your working with want to get the transaction completed. If I was told I would be on my own more so, my expectations could have been set so that I wasn't caught off guard.

Now this transaction was good for me because my payment dropped almost $150 per month. Now that is a bit of a myth, but let me explain. I was paying $75.xx a month for PMI with my old lender, so there's half the savings. The other half came from a slightly lower interest rate, 5.875% down to 5.5%, and the reamortization of my mortgage back out to 30 years.

See, once you get into years 3-5, more and more of your mortgage payment starts getting applied to principal instead of the interest. Approximately $150 per month was getting applied to my mortgage principal. With the new mortgage though, I'll probably be somewhere in the high $100's again. Oh well, that's just the way things roll.

I only did it because I wanted to increase my cashflow. If I want in the future, I can always pay more money to principal and get the loan paid off quicker. Right now though, it's all about the cash flow! With the economy the way it is, a smaller mortgage is easier than a large payment. The other benefit now is my taxes and insurance is no longer escrowed. I can now put that month amount into my OWN savings account and collect the interest for myself.

In the end, I got what I wanted which was a no closing cost mortgage with a lower interest rate and a lower payment amount by about $150.00. If your looking for cashflow, I would highly suggest you look at Wells Fargo's no closing cost mortgage because it is pretty painless after all and requires NO money for your closing cost. Your loan balance doesn't even get increased. You do however have a higher interest rate to pay for that benefit, but if you don't know how long you'll be in your house, in a falling interest rate environment, and a house you will not own for a long time, a no closing cost mortgage is the best way to go. If however, rates are pretty stable or they are going up, and you will be staying in your house for a while, then pay points and closing costs will be the way to go.

In the end, my Wells Fargo no closing cost mortgage went well and I do encourage others to go with the program if it fits your needs and you do it for the right reasons that I mentioned above.