Here’s a strategy. Mortgage rates have fallen and it makes sense to refinance but you also want to explore selling the property. Maybe list the unit on the high side just to test the waters and see if you get any interest. All the while, you can apply for a refinance and lower your monthly payment and if refinancing a listed propertyyour property doesn’t sell for the price you want then you still win with a lower rate.

Yet that scenario won’t ever happen. Why? Because lenders lose money on such a deal. Losing money and issuing more loans is a sure way to go out of business if you’re a bank.

Lenders do charge upfront fees to offset some of the overhead accrued during the loan approval process but it’s never enough to cover all the expenses incurred. Beyond the loan officer’s pay, there’s additional staff on payroll, loan processors and underwriters and bank fees that need to be settled. The loan is typically sold and the proceeds from the sale add to the lender’s coffers but typically not very much. The Mortgage Bankers Association regularly reports per-loan gains and losses each quarter and it might surprise many to learn that total loan productions expenses average just under $7,000 per loan.

If a lender discovers a home is listed the loan application will never make it out of the gate. The loan won’t be on the books long enough to recover the fees needed to fund the loan. Even if the home has been taken off the market, lenders will still discover the listing and the borrowers will have to convince the lender they’ve decided not to sell after all and intend to live long, happy lives in the subject property.

How do lenders find out? Easy. The appraisal report will identify whether or not the property is currently or recently listed. There are even instances where the appraiser pulls up to a property to start an appraisal and sees a “For Sale” sign in the yard. Dead deal. Won’t happen. Refinancing while listing or even refinancing after a listing has been cancelled doesn’t mix.