LSI Mortgage and Chris Piatchek pulled the Refinance bait and switch on me pure and simple. They promised me (in writing) a 30-year fixed rate of 3.625% and then at the last second (when it was too late for me to bail out), they changed the rate to 4.5%, not because interest rates went up, but for a completely bogus reason.
When I saw the higher rate on the Final Hud statement, I called Chris Piatchek and asked him about it. He assured me once again that I was locked at 3.625% and that the 4.5% on the paperwork must be a mistake. However, shortly before closing Chris changed his tune and said he was having trouble getting any banks to take the loan. I knew that there was no possible reason that the banks should be balking at the loan. My credit rating is beyond excellent and the loan was for $250,000 LESS than the appraised value of the house! So I knew the appraisal being too low could not be an excuse to raise the rate. But WAIT! LSI managed to come up with a reason why they could not give me the agreed-upon rate: Not enough comparable sales in my neighborhood in the last 6 months, so the appraisal wassuspect. HA! I live in a subdivision that has 1100 (yes, count em 1100!) houses all pretty similar. So that is a completely bogus excuse to raise the rate almost a whole percent. And ESPECIALLY when the appraised value was almost $600,000 and the value of the loan was under $350,000!
And if you have read anything about LSI, you know the ending to this story: All the other banks (BOA, etc.) turned down this risky (HA!) loan and good old Flagstar bank was the only one that would take the loan, but of course at 4.5%, not 3.625%. Because it was too late for me to make other arrangements, I had to go ahead and refinance at 4.5%. Chris Piatchek gave me a rebate of sorts by covering the difference in interest payments between 4.5% and 3.625% for the first FOUR months (until I would hypothetically be able to refinance again). But that hardly makes up for all the expense of a second refinance and for the huge difference in mortgage payments after the four months is up.
Six months later, I was able to refinance the same property with a real bank (not a mortgage broker like LSI) and had no problems at all and got a rate of 3.375%. So, you can do like I did refinance with LSI and then have to do it over 6 months later and pay all the closing costs twice. Or you can skip the LSI fiasco and go directly to a reputable bank or mortgage broker.