CitiBank Mortgage Refinance Review

Warning: this is a long post.  If you just want to get my quick review on Citibank Mortgage, just skip to the last paragraph.  If you want to hear my personal story, keep reading.

When rates dropped a few years ago, we refinanced our old house to a 15 year mortgage.  It was sold to Citi Mortgage, and I’ve had no problems with them throughout that process.  Now that rates have dropped again, to ridiculous levels, they sent me a letter in the mail to refinance with them to get a better rate.  Since that house is now our rental property, I was debating on refinancing again anyway.  We’ve been paying in addition to what the rent brings in to pay the mortgage for two years now.  I wanted to refinance so we don’t have to pay that extra amount anymore.  I want our renters to cover the entire mortgage payment.

So I gave them a call, and everything seemed great.  The person on the phone was helpful, and even gave me her direct line.  She explained the terms to me, and somewhere along the lines I told her it was a rental.  She told me that changes the terms, and gave me the terms that would apply to the rental.  The interest rate was a little higher, but was still lower than our current rate.  So I told her we wanted to go ahead and do it, and she told me that my credit card would be charged $415.50 for the appraisal.

This is where the problems started.  I checked my credit card statement a few days later, and noticed a charge from Citi for $600.50.  Come to find out, they charge more for the appraisal for rental properties, too.  When she mentioned the appraisal, she forgot to quote me the rental property price.  I figured I could just deal with that toward closing.

They sent me the first breakdown of costs (the HUD statement).  I reviewed it, and since I’ve been through a few of these in the past, one number stood out to me.  They estimated $1900 for the title fees!  That’s more than you should pay for a complete refinance!  But they had paperwork that I could fill out to choose my own title company, so I did that.  The title company I chose was one I used in the past, and had a total cost of $475 (plus, they were local, which is a HUGE plus).

I started the refinance process in January, and they had a 90 day rate lock.  I wasn’t in a rush to refi, so I was fine with waiting.  They told me it would take a while, and could take all the way up to the 90 days.  I’ve been through a few refinances in the past, and none have taken much longer than a month, if that.  But like I said, I wasn’t in a rush.

I’ll cut to the chase.  The loan processor was incompetent of doing her job.  She took forever to get back with me when I emailed her with a question, if she wrote back at all.  She asked for partial information that she needed, then added more to it after I sent her what she requested.  She never confirmed that she received anything.  The 90 days went by, and she emailed me stating that my loan had been cancelled due to lack of response on my end.  I was so upset that I didn’t even respond to her, but called the sales person instead.  That’s the short version.  The bottom line – this loan processor was simply incompetent at their job, and should be fired.

At this point, I should have just asked for my incorrectly charged $600 back, but they offered to give me $200 back to cover the difference in the quote, and would open the loan back up with the same terms and put a rush on it.  I talked to the salesperson’s boss, who was also very helpful.  He told me that he wasn’t sure if they could get it closed in two weeks, but it should be shortly thereafter.  He was going to put a rush on it, and was definitely not going to use the same underwriter.  I figured I’d give them a second chance, because their sales team was responsible.  I figured the chances of me getting another company to use the existing appraisal was probably slim to none, and I didn’t want to be out $600 that I didn’t ever agree to in the first place.

So I figured I had a bad underwriter on the loan, and it would go better this time.  Unfortunately that was not the case.  It took a month and a half to close, and that’s only after I started emailing the loan processor and both sales people every day trying to find out the status.

The original title company called me asking for some more detail.  I told them I wasn’t sure why they were calling, because I wasn’t going with them.  They asked why, and I told them I’ve never paid more than 1/3 of what they were trying to collect in closing fees.  I contacted the person who was working on my loan to make sure they were aware that I was using a different title company.  Of course, I got no response to my email.

Finally, I got a closing date!  They assigned a new person to close on my loan, and she emailed me the final closing documents.  She did state that the loan was to be closed at the company I requested.  I reviewed them, and noticed that they increased the appraisal again to be $729.50 (remember when they quoted me $415.50?).  That’s almost DOUBLE what they originally quoted me.  Can you say bait and switch?  I guess they figure nobody will ever look at the details of what they are paying on a mortgage (people really aren’t that dumb, right?).

So I immediately emailed her back, and asked her what was up with that amount.  She never wrote back.  I went to the closing, and nobody from Citi was there.  No surprise there.  I kind of gave a quick rundown to the person at the title company of the situation, and she was shocked that this whole process started in January (it’s now June 25, and I just closed today).  After I told her about the incorrect charge for the appraisal, she immediately called the person who was supposed to be dealing with my “closing” from Citi, but got her voicemail.  She emailed her as well, and tried calling back several times, with no response.  She called the sales person as well, and no answer there either.  She even tried contacting anybody from Citi during the closing, and couldn’t get through to anybody.

At this point, I was ready to be done with Citi.  I didn’t want to schedule another closing date to where I’d have to take off time from work to attend, so I signed the paperwork.  It was still a good deal, but they got me for $129 more than I agreed to (so far).  I contacted the sales person’s boss who was helpful before, but he gave me some bogus rundown of how it works out.  After I got off the phone, I looked into it more, and emailed him with all the numbers.  They should be writing me a check for $129, but we’ll see what he says.  I told him I’d give him until tomorrow night, then I’ll be in touch with the Better Business Bureau.  I’ll add a comment with what I find out, in case you’re interested.

Edit: He wrote me back, stating that they are not going to issue a refund.  I decided it’s not worth filing the complaint against the BBB, which I’m sure is what they were banking on.  I’m just glad this whole experience is over, and hope this post can help stop someone else from making my mistake.  They finally wore me down, and won on the $129, but I did a pretty good job of getting a good deal out of the whole thing overall.

If you are looking at refinancing with Citibank Mortgage, DON’T DO IT!  Stay as far away as you can, even though they seem like a reputable company up front. They will NOT close on your loan in a timely fashion, and will try to sneak charges in on you.  When you have any questions for them, they will completely ignore you.  Completely unethical company.  Go with someone local instead. That way, if they start ignoring you, you can simply visit their office.  That face-to-face option typically makes companies more reputable.

Home Depot Water Test Review

We had someone in Home Depot ask us if we wanted to get our water tested, and we were curious, so we said yes.  The person in Home Depot said it was a company affiliated with Home Depot doing the water testing, not Home Depot themselves.  The company that came to our house was Tri-State Water, Power, and Air, and they came tonight.

They said the test would take about an hour to do.  They ran through a bunch of different things, like showing us how soft/hard the water is, the impurities in it, etc.  She talked about all the products that are used to deal with all the impurities (fabric softener, laundry detergent, lotion, conditioner, etc.), and how those are not needed anymore if you have the right kind of water.

So after about a 2 hour demonstration of all this (along with showing us the system they have, and how it is much better), we were convinced that we should get something like it.  Then she starts talking about their product, which is called RainSoft Solution.  It’s around this point in time that I realized it was going to be one of those “buy it now to get this great deal” type of sales pitches.  But I thought this was a good product, and was willing to pay a reasonable price for it.  This was different to me than most of those sales pitches.  She worked with us to estimate how much we spend on all those products listed above that would no longer be needed, and it came out to about $30/mo (which fits right in line with how much I budget for them every month).

Then it comes to the price of their product.  $6400 to buy the product and get it installed.  Oh, but they would give us a 6 year supply of a better, organic version of all those products listed above, which she claimed to be an $81/mo value (don’t ask me how it’s so much different from what we’re currently paying for the same stuff).  But we’d only get the free household products if we purchased it tonight.  Yeah, a $6400 decision is fully expected to be made within a 2 1/2 hour timeframe.

So I was totally honest with her.  I told her that I think they have a great product, but I can’t make a $6400 decision in one night.  I said something like this: “So I think you have a great product, but I can’t make a decision that involves this much money in one night.  I like to research everything that costs that much before I buy it.  I mean, how do I know that there’s not a competitor of yours that does not have the overhead costs of going from home to home that sells the product for $3000?”

I think it was at this point that she realized we were smarter than her average household, because she started packing her things up.  She realized we weren’t going to be buying tonight, and explained that we could always purchase it later at the same price, but we wouldn’t get the free 6 year supply of cleaning products.  So she packed everything up and started heading out the door when I asked her if she had any information about the company she worked for (because she didn’t leave us a way to get back in touch with her).  She said she didn’t have anything other than a business card, which she gave to me at that point in time.  The business card had her first name on it (no last name) and was printed on a home computer.

So, like any budget-minded person would do, I immediately went to Google after she left, and looked for “RainSoft water reviews.”  Guess what I found.  A lot of unhappy customers.  I read review after review about how they are pushy to try to make a sale, how they do anything possible to not let you return it once you say you want it, and every once in a while a good comment about how it’s a great system but way overpriced.  Almost everyone said you could find something just as good but much cheaper, which was my gut feeling as well.

Never make a major purchase decision on the spot.  It is almost always a bad idea.  Anything that is semi-major of a purchase (let alone $6400) requires research and patience.  If you feel pressured into buying something, just say no.  You’ll almost always regret it later if you don’t.

I am convinced that we should do something to get better water, but I know it’s not going to be using RainSoft’s products.  We learned some stuff from her, but will find something that is a little more practical (and won’t pressure us into buying it).  Oh well, at least we got a $20 gift card to Home Depot. 🙂

Update: We ended up getting a Whirlpool water softener from Lowes for $400, and installed it ourselves.  It works great, and uses very little salt.  We’ve had it for a little over a year now.  We probably add a bag of salt every 2-3 months.

You Need A Budget (YNAB) Review

Note: This is sort of a long post.  If you are short on time, but still want the gist of the situation, skip down to the last paragraph.  Then come back and read the rest later when you have time.

Tracking and managing your money is the most important thing you need to do in order to understand your financial situation.  When you add planning for your future into the financial equation, a full budget is formed.  When you budget your money,  your spending habits start to line up with your ideas of how you want to spend your money, instead of wondering where it all went.  You will sleep better at night, since you won’t have to worry about how you’re going to pay your bills (since they should be the #1 priority), and you will live a much less stressful life.

Many products exist for tracking your money, such as Microsoft Money, Quicken, etc.  A few exist for budgeting, but I am going to focus on one that stands out from the pack – You Need A Budget (YNAB for short).

I was a Quicken user for about 10 years.  I liked tracking my expenses, because it helped me  understand where I was spending my money.  But I always felt like something was missing.  Even though I tracked everything I spent, I still didn’t feel like I had a good hold of how I spent my money.  I would look at how much money was in my checking account, and make my purchases based off of that.

Little did I know, that was the wrong way to go about life.  Out of nowhere, I’d get a bill for 6 months of my car insurance (around $600).  Or I’d need new tires, and I didn’t have any money to pay for it (I was living paycheck to paycheck).  I knew something just wasn’t working like it should be.  I was always looking backwards at my money.

When my wife and I got engaged, we had to go to a class that informed us about a lot of things regarding marriage.  One of the topics was budgeting.  I never really budgeted my money, because I always thought of budgeting as being the same amount every month, which never seemed to work for me.  It seemed like I always spent my money toward different things each month.  The key thing they said during that class was that every month is different, and that you need to plan ahead.

I thought that sounded like a great idea to merge our finances, so I decided I was going to start up a spreadsheet to budget our money.  I thought I’d start fresh with my categories, so I googled something about it, and accidentally ran across this site: www.youneedabudget.com.  I started reading about it, and thought maybe using something like that would be even better.  So I started researching a few different companies, and decided to go with YNAB because it was a one time fee (as opposed to a monthly fee of their competitors).

I had no idea what I was getting myself into.  I read about a few things on their site, and thought the Four Rules set them apart.  I’ll just give you a quick overview of those rules, so you understand how YNAB is different.

Rule 1: Give Every Dollar a Job.  You make sure you assign every dollar you make a job.  If you plan to spend $50 on eating out, you put $50 of your hard earned money into that category.  You owe $100/mo on your credit card statements, so you assign $100 of your income to that category.  You do this until you assign every last penny you earn to some category that you have created.  You can have as many or as little categories as you want, so it’s extremely flexible.  This gives you a great sense of awareness about where you plan on spending your money.  Then you just execute your plan throughout the month.  It helps keep you on track.  This also brings you and your spouse together financially, as you both agree to where you plan on spending your money.

Rule 2: Save for a Rainy Day.  Remember that car insurance that threw me off before?  Well, this rule helps with that by planning for it ahead of time.  Instead of me being out $600 out of nowhere, I just budget $100/mo to my car insurance.  When the bill comes due, I just paid it and didn’t think twice about it.  Once the six months hit, I had the $600 already allocated toward it.  Saving for Christmas is another big expense I budget this way, as mentioned previously.  This rule helps balance the stress in your life by planning for those big expenses

Rule 3: Roll With the Punches.  Every month is not perfect.  Things still come up that you didn’t plan.  One of our biggest issues with this is groceries.  If we plan to spend $200/mo, we’ll spend $225.  If we plan on spending $250, we’ll spend $265.  It never fails – there’s always some category you’ll over spend.  This rule helps with those situations.  If you overspend by $25 on groceries in January, you won’t be $25 short for groceries in February.  It’ll spread the $25 across all your income for the next month, so you won’t notice it as much.  It still hurts, but not as bad.  I actually cheat on this rule a little bit.  I have a category I label as Buffer, which allows me to overspend on things.  When I overspend, I just take some money out of my Buffer category to replenish it, so I can start the next month fresh.  I try my best to not overspend more than what’s in my Buffer category though.

Rule 4: Stop Living Paycheck to Paycheck.  This rule really sets the software apart.  To use the software at it’s fullest potential, you really need to live off last month’s expenses.  This is especially key to people who have variable incomes, as it lets you know exactly how much you have to spend for the month on the first day of the month.  It’s still magical even if you have a set income, though.  Once you get to this point, your whole outlook changes.  I keep forgetting which weeks I get paid, because it doesn’t matter to me.  According to me, I get paid on the first of every month, as that’s when my budget switches over.  My money builds up throughout the month, but I don’t spend it until the next month.  This rule really helps reduce the stress of managing your money.  If you have a bill to pay, you just pay it.  You don’t have to worry about when you’ll get paid next to make sure you have enough money in your account to cover the bill.  Since you are living on last month’s income, you already made the money last month.

YNAB’s four rules really set the software apart.  These four rules are built right into the software, so you don’t even really have to think about it.  When I used Quicken, I was always looking backwards at my money, and never really got to save much due to that.  With YNAB, I’m always looking forward, while still tracking everything that already happened.

With Quicken, I had different savings accounts for different things: one for car payments, one for house payments, etc.  But savings accounts are not budgets, and YNAB helps us logically separate our money from the physical location.  You just need one checking account, and maybe one savings account (just to earn more interest).  Instead of looking at your account to see how much money you have to spend, you look at the category where you want to spend your money.

When I used Quicken, I could tell you exactly how much money was left in my checking account.  Now, I couldn’t tell you even within hundreds.  I know there’s a few thousand in there, but other than that, I have no idea.  But I can tell you exactly how much money we have left to spend on eating out this month.  This is a much better way of thinking.  It almost gives you a sense of euphoria with your finances.  You spend money where you want to spend it.  Your spending aligns with your values.  It’s magical.

To sum it all up, budgeting your money is a must.  YNAB does an incredible job with this task.  They keep everything very simple with their software, and incorporate life-changing rules into their application (that’s a good thing!).  YNAB is the greatest piece of software I’ve ever used.  It’s helped us get on track with our spending, and stop living paycheck to paycheck.  Once you taste this way of living, you’ll never want to go back.  If you want to sign up for YNAB, click here to save $6 off your purchase (and I get a referral bonus if you sign up).