REFI FUN!

In refinancing my home mortgage, I decided to be a wise shopper and get offers from multiple firms. It's the biggest financial transaction I am likely ever to engage in, so I should give it at least as much consideration as buying a used car.
I solicited bids from about 10 firms. Most of them quoted the same interest rate (3.25%), which is not surprising since they're based on 10 yr Treasury bonds or something. This would reduce my monthly payment by let us say $100. It's not big money but I've never gotten much for free so I pressed on.
Most competitors did not talk about the total cost of the refinance, including 3rd party fees. I had to probe, which was annoying. Generally the attitude of the sellers was that I should not worry about that because I'm just adding it to the principle so what the heck.
I'll tell you what the heck: it would be another 8 months or more tacked on to how long before my home was 100% mine. Not insignificant!!!
Some sellers tried to discount the cost by counting the payment made during the skip month against the cost of the loan; this was doubly annoying. I don't mind a salescritter putting the best spin on things, but don't treat me like I'm stupid.
If I had nothing else to do with $8500 just sitting around, I might put it into something that repaid it in 85 months and thereafter paid me $1200 a year (plus or minus its impact on the mortgage interest deduction). Since I don't have that cash in my pocket, it would be borrowed at 3.25%: still a profitable use of the money but not great.
One bidder used this tactic: get the bid going, then when I've put in some time ask for $500 to pay for something - maybe the inspection - they take credit cards right over the phone - how convenient!.
I had to probe to discover that this fee was non-refundable even if I found another firm with a better offer. When I politely said I'd think about it and ended the call, they contacted me again with the good news that the manager let the fee be reduced to $100. Obviously the purpose of the fee was to lock me in emotionally to working with that company ( resisting the pull of sunk costs can be hard.) I was not going to commit to a lender before I completing due diligence, so that company took itself out of the running.
Everyone wanted to talk over the phone. I did not like that at all, because it meant I had to take notes while talking and then file them usefully. Texting was a little better but I haven't figured out how to store a permanent copy of texts on my computer so I can go back some day and see what was promised. Eventually I just got to saying, "send me an email"; some did and I ignored the rest.
Many competitors worked on being my friend. I did not like this; it is a business transaction, not a friendship. It's good to speak in a friendly way but I was uncomfortably aware of our respective roles in the predator-prey relationship.
One sellerperson in particular talked about their pride in drafting bids so complete that underwriting would accept them with no questions. I guess that's important but not really relevant; I felt they were trying to get me invested into that transaction which was not necessarily in my best interest. I'm not going to accept a higher price just to make someone feel better.
The big differentiator between bids was the total fee, including mortgagor fee, title search, inspection, etc. One and only one competitor offered to cover most of the costs. This reduced the cost of the refinance to a point where it made sense.
I was willing to jump away from this company if it went bad, but I had enough confidence then that I took a phone call to work through the paperwork. All the of paperwork was online of course, but for some reason sales people like to ask questions orally. Whatever.
I was pleasantly surprised that this bidder took me through the process of showing me where the 3.25% rate came from. We looked at Yahoo finances and the 50 year history of 10year T Bill rates; this increased my confidence that this was a good time to refinance although I have to be wise enough to accept that I don't know the market. I now have a better idea of why most of the bidded rates were the same. I now realize that I could have done this part of the analysis before soliciting bids, so that I could winnow through offers faster.
The lesson here: DO YOUR HOMEWORK. If you want to save $100/month, don't just buy the first package of magic beans someone offers you. Figure out how much time it would take to earn that at your current job, and put in at least that amount of time. Get everything in writing, and read everything!
It's a fun puzzle you can do at home in your pyjamas drinking coffee; the scoring system is not much more complicated than your average web-based game; and it offers real cash prizes!