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Can a Refi be done with a new company with NO Appraisal?

I'm currently in talks with a Refi company who is setting up my paperwork to do this. 

Due to the market, my amount owed is more than what he says my house is valued at, therefore he is telling me that I will not be getting an appraisal. 

He also told me that I can NOT get my own appraiser, that if it were to happen, it would HAVE to be one from his company (or their company they use) who completes it. 

Key: He says because I'm not having an appraisal, I cannot add in my closing costs, and must pay them out of pocket, which is a $4400 charge. 

Is there anything wrong in his statements on any counts?
Is he lying about this to get me to have to pay these closing costs out of pocketfor his benefit somehow?
  • December 29 2012 - Williamstown
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Answers (5)

Profile picture for user2119299
This is not necessarily correct. If your loan is owned by FNMA (Fannie Mae) or FHLMC (Freddie Mac) you may be eligible for a HARP 2.0 (FNMA) or Relief Refinance (FHLMC). Both do not usually require appraisals and both are specifically designed to assist homeowners that owe more than their house is currently worth so they can get a better rate/term. The only caveat is that you must be current on your loan.  There is no need to pay the closing costs in cash if you are eligible for one of these programs.
You can check it out at the FNMA or FHLMC website to see if they own your loan.
  • January 13 2013
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Everything that Justin mentions is correct.  With rates being as low as they are, shop around a little bit. I would imagine you can find a lender that can cover most of the closing costs with a great rate and be able to explain it to you in a less combative mode.

  • December 30 2012
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Profile picture for Outer Banks N C
Lenders have new rules and old rules they must go by. One is that you can not pick an appraiser for very obvious reasons. Another is that the lender must select an appraiser randomly and they will NOT work for the lender.

If the house is not valued for as much as what is owed I can see that they do not want to add in more closing costs making it deeper under water.

If in doubt, go see another lender and ask them what they can offer, it's free so do it and find out.

tim
  • December 30 2012
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It sounds like you are being offered an FHA streamline, if this is true then all the information is accurate. If you would like to limit your cash due at closing, ask to review a slightly higher interest rate with additional credit provided toward your closing cost. Keep in mind on Streamline you will "skip" a payment and get a refund of your existing impound account, in many cases this serves to replenish the cash at closing required.
  • December 30 2012
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Your last statement is the most important....... "Is he lying about......." is a very poor example of having trust and confidence in the person you are about to do business with. If your loan is an FHA loan then you would not need an appraisal, and you should be able to have a lender give you a "lender credit" enough to cover the closing cost.
My suggestion is to get a referral to a loan officer from friend, co worker, relative and start the potential refinance on the basis of confidence that you can trust the information loan officer is sharing.
  • December 29 2012
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