I was in an online chat with a loan agent out of Quicken Loans' Arizona office. We led the conversation with:
[My Name]: I want to move forward, BUT I'm about to sit down to tacos with my kids.
[Agent's Name]: aww. its easy to proceed.
[My Name]: So, how do we proceed later or tomorrow?
[Agent's Name]: I can secure this for you now, and we can go through your documentation tomorrow.
[Agent's Name]: There are no out of pocket expenses for you to refinance with us here at Quicken Loans- upon application we do accept a deposit in the amount of $500 to cover the costs of your out of pocket expenses, including your appraisal, up front. Then we apply that back to you at the closing table. It isn't a fee- it's just used for out of pocket expenses. Naturally, if we cannot get you initially approved based on the information you have provided me, then we do not charge you the deposit. I lock your rate and send you all the documents in black and white...We take Visa, Mastercard, Discover, Amex...
[My Name]: Can you explain that?
[My Name]: I need zero out of pocket, period.
[My Name]: No deposit, no credit back at closing. Nothing.
[Agent's Name]: Yes, to secure the loan and move forward we accept a commitment from you in the form of a good faith deposit. This helps cover the appraisal upfront.
[Agent's Name]: Once the loan closes, we reimburse backs towards the closing costs.
[My Name]: Welp, it'll need to wait then.
[Agent's Name]: Okay,
[My Name]: Caught me at a bad time. Not about to but another $500 on credit. Seems odd that a loan company would encourage that.
[Agent's Name]: It's actually quite standard. Last year we closed 70 billion in mortgages, so people are accepting of this.
[My Name]: That's okay. You found the one in 70 million that won't.
[Agent's Name]: I am sorry to hear that [My Name], but there needs to be a way to pay the appraiser.
[My Name]: Just doesn't work for me, right now. Doesn't matter what the guy next door does.
[My Name]: They do not cost $500
[Agent's Name]: I am showing appraisal costs in your area are close to $460.
[Agent's Name]: [My Name], I am here to help you. When we secure a loan, this is part of our process.
[Agent's Name]: I am sorry if I caused any frustration. I was only trying to help.
[My Name]: Well, I started this very long conversation about me not wanting any out of pocket.
[My Name]: Maybe I wasn't clear
[My Name]: So anyway...thanks for the help.
[Agent's Name]: I am looking back at our conversation, and there was no mention.
[My Name]: Let me refresh you
[My Name]: "[My Name]: I am looking to lower my monthly payment, get rid of PMI, not pay anything out of pocket and have a few bucks at the end. You know, all the good stuff."
[Agent's Name]: Usually my clients still us the deposit and bring $0 to close.
[Agent's Name]: I am sorry if I misunderstood. T
[My Name]: Me too
I have some issues with my experience:
1. The canned message says that there are no out of pocket expenses, yet requires a deposit to cover out of pocket expenses. This is deceptive. Does the deposit come out of my pocket? Yes it does. Just calling something different does not change what it is: an out of pocket expense. Even if it were returned or reimbursed to me 5 minutes later, it had to come out of my pocket first and therefore by definition is an out of pocket expense.
2. The agent spent an outsize amount of time generating rapport and trust with me. Though she made NO mention of the deposit until the very end. If not a ripoff, most definitely a waste of my time.
3. The agent also included scare tactics like this in the midst of the conversation:
[Agent's Name]: Before I spoke with my director I was about to let you know the rate was 5.125-5.25% with 4900 in costs. Your credit score causes some large adjustments. Most lenders right would not offer 4.75% fixed for only $3,900 in costs. Because the market has gone up over the past 2-3 months. We saw really slightly dip end of last week, but the market is very volatile right now.
[My Name]: Right. I believe it to be trending upwards.
[Agent's Name]: If your score drops anymore for any reason...
[My Name]: It won't.
[Agent's Name]: you might not even be able to qualify for refinance.
Beware of Quicken Loans. The phrase "No out of pocket expenses" means something different to them than it does the entire rest of the universe. If they are willing to deceive about a $500 deposit, then I'm not interested in going any further. Their loan terms are indeed attractive and their size/heft allows them to offer programs that a lot of other lenders simply can't. However, Lenders don't get giant and huge by not closing deals. They will seduce you. They will make you trust them. They will make you feel like an outcast for having a problem with something when a bajillion other customers are just fine with it. If you choose to do business with them, maintain a skeptical eye.