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2017 Earnest Refi Experience

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  • 2017 Earnest Refi Experience

    I finally completed a refinance recently with Earnest.  All in all, it was an easy, albeit very lengthy process.

    Time from application to approval was pretty short, maybe a couple weeks since I dragged my feet on pulling the trigger.  I never had to pickup a phone.  Plugging in our financial information was extremely easy and uploading a few additional requested documents was also simple.  They ask you to give them your bank login credentials which was a little creepy, but this did not bother me and saved a lot of hassle.  The actual "approval" was instant but I didn't sign until they had adjusted my rate.  I had to contact Earnest a couple few times asking if _________ affected my rate, explaining how it should not, etc.  Sometimes the response was "that has no effect on the offered rate" and others "that definitely improves your rate, here is a better rate" for the same question.  I'm very glad I asked twice.   

    The time from signing on the loan to funding, however, was almost three months.  In that time I made three additional payments on my existing loan, and the original approval amount had not considered the past month's payment, so the adjustment was a few thousand dollars which took a few more weeks to show up back at Earnest after it finally funded.  We were going from a lower variable rate (had adjusted up to about ~4.2%) to a higher fixed rate (~4.6%), so this was not a terrible thing, but if you were trying to refinance from 6.8% or worse down to a better rate, this would have cost you a lot of money in extra interest.

    I cross-shopped DRB (lender I was previously with) and SoFi (who has been sending us mail very persistently for years offering great rates), both of which will all give you a real rate offer without a hard credit pull.  Neither offered as good a rate as Earnest, and SoFi essentially bait-and-switched to a high rate after we had made it through the approval process.  It may have been possible to get DRB to offer a more competitive rate but I got tired of dealing with their customer service which was pretty atrocious.  In the end, I finally got a decent rep at DRB, and when you withdraw the application they try to get a second chance to beat another rate, but by those points I had already signed with Earnest.

    Overall so-far I'm pretty satisfied with the Earnest experience.  In addition to the rate and terms of the note, the UI is much better than what I had at DRB, and it looks like it's very flexible in allowing you to make additional payments, adjust your payment schedule and amount or even skip a payment once per year.  Furthermore, additional payments to principal (such as the overpayment) lower the required minimum monthly payment which is a very nice feature.  Previously with DRB I had made several substantial principal payments but there was no option to adjust the future monthly obligation.

    Once we get an attending income, I plan to refinance again (which Earnest actually encourages you to do), likely back to a variable rate if the rates are still attractive.  I will probably be looking at Earnest, Lend Key and Common Bond.

    Our first payment comes out soon so I'll see how that goes.  Wish me luck.   :lol: