Will WAMU really refinance your home with no closing cost or is that a lie?

Question

I'm a loan officer and lately I've heard that Washington Mutual will do your home loan with no closing cost and the will use your old appraisal. Is this true or are there closing cost when it's all said and done?

Answer 1

they will use the old appraisal if it's a rate/term refi or if DU waives it.....streamline Refi

anyone can do NO CLOSING COSTS...if the going rate is 6.125% with closing costs....they will charge 6.75% no closing costs. they raise the rates by at least 0.5%

nothing in life is for free

Answer 2

Any lender can offer a no closing cost loan. It is called "premium pricing" in the industry. You simply pay a higher rate of interest than what you qualify for. The overage in rate you are paying the lender uses to pay for the closing costs. While it looks like there is no closing I can assure you you are paying it one way or the other. It is pretty much a gimmick to attract customers to refinance. As far as no appraisal there are FHA streamlines, and VA rate reductions that do not require a new appraisal. In most situations it is better to go for the lower rate and roll in closing costs to the loan amount or pay them out of pocket.

Answer 3

I have had several mortgages with both Washington Mutual and one of the lenders that they purchased in California where I live. That bank was Great Western.

Great Western gave me my first mortgage on a house when I was in college over 40 years ago. I decided to buy a house and rent out bedrooms to my fellow students rather than pay rent.

It was one of the best decisions that I have made in my life.

Great Western gave me a mortgage when no other lender would. I worked my way through college and was self employed most of the time.

No lender and no REALTOR even wanted to talk to me. But Great Western did.

I bought that house directly from the seller who was selling the house without a REALTOR.

That house was the best investment that I ever made in my life.

I paid $15,000 for that house back in 1967

I recently had that house appraised at $860,000.

I see one of the responders posted an issue of inflated appraisals.

I agree that is a problem with all lenders, not just Washington Mutual.

The way that I see it, it is your job as a purchaser to protect your interests.

One way that I do that is that I hire my own appraiser when I am purchasing a property. I make the sale contingent on my apprasal, not the lender's appraisal.

I also hire a real estate attorney who writes the language that makes that work. The language of the standard real estate contracts is not sufficient to make that work. You need a good real estate attorney to write that language for you and more importantly enforce that language in the event of a dispute.

Invariably my appraiser is lower than the lender's appraiser.

I give the seller two choices. That is the seller may either reduce his selling price to the value determined by my appraiser or I withdraw my offer and buy another property.

The seller is to agree to sign instructions to the title company directing the title company to return my deposit to me. If the seller fails to sign those instructions, and some sellers do, then I have my atorney notify the seller that he can be fined for unreasonably refusing to direct the title company to return my deposit to me and also under the terms of my contract the seller will be liable to pay my attorny fees as well if he fails to sighn documents directing the title company to return my deposit.

I have never had a seller continue to refuse to sign after he was contacted by my attorney and my attorney has explained the terms of the contract including the special language that my attorney added to the standard contract.

Essentially my experience with Washington Mutual is that they are one of the most honest lenders out there, however I do agree that they should increase the quality of their appraisers.

However I also think that you should do like me and hire your own appraiser to protect your interests. Then the issue of the lender's appraiser becomes irrelevant.

Answer 4

You are probably hearing about WaMu's new 'switch mortgage' program. When you take an original mortgage with WaMu, they will switch you from variable rate to fixed rate with no closing costs and no refinance charge.

You can read the whole story at the supplied URL.

Answer 5

I don't know about WAMU, but Bank of America does a loan with no closing costs. Not rolled in or hidden, but truly no closing costs.

Answer 6

No body works for free.

Nurses don't work for free.

Firemen don't work for free.

The guy on the phone at Wamu does not work for free.
He also doesnt have to be licensed as he works for a corporation.....he probably doesnt want to be called a loan officer...he's likely referred to as Production Staff.
If they can get you to go with a higher rate and a bigger loan........they will get paid more. As long as they produce they get a small base pay and commission based on total loan amount volume in the month.

Read up on whats going on with WaMu.

http://www.bloomberg.com/apps/news?pid=20601206&sid=aFSwsh_NlJYk&refer=realestate

Answer 7

Exactly what Carolina says. They advertise "no closing costs" then they charge what is called YSP (Yield spread premium). You pay an increased rate and that is where they get their profit. Mortgage brokers may charge YSP as well but have to disclose it, they do not.

Nothing is free, ask questions, use a broker. Everything has to be disclosed with a broker.

Answer 8

I'd check out this story before doing any business with Washington Mutual.

http://www.iht.com/articles/ap/2007/11/01/business/NA-FIN-US-Subprime-Mortgages-Scandal.php?WT.mc_id=rssap_business

Answer 9

With an 820 or better credit score. Who qualifies for that.

Answer 10

thank you everyone for the answers!