The why, in my refi question, is this…

Why is it so hard to refi and not get screwed?
Here’s the deal we have our mortgage through a small town bank and our car loan through the same bankl and our home equity loan through 5/3. We want to refinance the two home loans and possibly my husbands government student loan…not sure if the car loan could get rolled in there too…
Anyway, he bought the house for 101K and 86k is left on it (including the equity loan) and we’re paying $1080 a month between the two loans. I asked the small town bank about refi-ing and she told me we had to pay for the appraisal and $2500 closing fees and that it would only work if our house appraises for $126K. Which it won’t appraise for the much…maybe $112K.
I’ve got a friend who worked for several banks as a loan officer telling me that the lady at the small town bank is nuts. They can waive the fees if they want and if they can’t they can roll them into the loan so we don’t have to pay anything up front.
Why are the two telling me such completely different things? What can ya’ll tell me about Refinancing the house loans? We need the payment to be closer to $850 a month vs. the current $1080….is it possible?