I wanted to refi my 1st only and leave heloc open as it is estranged husband's debt.I specifically asked prospective lenders if they are willing to subordinate the loan with the holder of the 2nd.
I even asked if there was a situation where they would not subordinate. They only said "it just depends on the other bank's policy regarding subordination." The loan-to value ratio is an incredibly low 16.7%! my credit rating is 780. After three weeks of the most rigorous document demand of any closing I've ever been through (including 3 business property closings) they denied me because the heloc had a pre-payment penalty.
They won't subordinate when there is a pre-paymment penalty. They conveniently forgot to tell me that when I *very specifically* asked about subordination and what would prevent subordination. Two bankerss at Wells Fargo told me AmeriSave never even *requested* subordination, only *payoff* information. Secondly, I'm in the 2nd year of the heloc and the pre-payment is a whopping $500 at this point.
And besides, *I was not going to prepay* Can you say *smoke screen* *only interested in the up-front fee*? Plus they recently lost a lawsuit regarding other misrepresentations.
Beware!If already in process get a Buyer's closing attorney and owner's title insurance to protect yourself at the very least!
Monetary Loss: $440.