No benefit to refi with current lender?

DEAR BENNY: I am shopping for a new mortgage (I will refinance about $160,000 remaining on a condo worth about $300,000) and discovered my mortgage holder wants about $2,200 in closing costs. I just financed with this bank three years ago and have stellar credit. There seems to be no special benefit for refinancing with this lender. Their broker told me as much. I don't understand why they wouldn't want to keep a good customer. Any insight? --Janelle

DEAR JANELLE: I am not a defender of banks, but just because the bank performed a title search and a refinance three years ago does not mean that there are no clouds (i.e., impediments) on your title now. The bank must have clear title in order to make you a loan. Accordingly, it must again perform a title search. Additionally, there are administrative costs that have to be paid because the lender will have to look at your financial situation again.

There will also be closing (escrow) costs to the settlement attorney or title company.

My suggestion is to shop around. Rates are now quite low and mortgage money is becoming more available. Get some quotes from other lenders (including all costs), and then go back to your bank. Tell them you would like to work with them, but their costs are high, and you want them to give you a discount. If that works, go with your current lender. If not, you have the right to refinance with any lender of your choice.

DEAR BENNY: My husband and I own two properties, and we are in the process of getting a divorce. The house I live in right now with my daughter has equity of about $100,000. My husband moved out already, but now he wants the house back.

The second property we bought together before we got married for $445,000. It's now worth about $200,000, but we owe the bank approximately $400,000. I was the only one whose name is on the loan, but both of our names are on the title.

What would happen to me if we sold both houses after the divorce is final? Is he going to get 50 percent of the equity and I have to pay the loss of the other house by myself or do we get the same equity and divide up the loss evenly? --Jacklyn

DEAR JACKLYN: If you do not already have a divorce attorney, please get one immediately. Different states have different laws regarding spousal rights, so I can provide only general information. In many states, there is what is known as "equitable distribution," which means that depending on how long the parties have been married, both husband and wife should share equally in any profits or losses.

Your lawyer should make every effort to negotiate a realistic divorce and property settlement with your husband, which would include, at the very least, a 50-50 arrangement regarding both properties. ...CONTINUED

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