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Mortgage 'Rate Reduction'
Posted on 6/9/11 at 2:31 pm
Posted on 6/9/11 at 2:31 pm
(Just started posting on TD although I've been lurking and reading the money board for a while.)
Is anyone familiar with approaching your mortgage lender and achieving a rate reduction-no refinancing, just an internal process.
I was in the car yesterday and flipping through the channels listened to Clark Howard for a spell and he discussed this very topic.
I have a BOA 30yr @ 6.375% on a piece on a rental property I own in Atlanta. About 5 years in on the loan.
Basically listening to what Clark had to say, he said the bank would prefer to lower the rate somewhat as opposed to losing the loan to a refinance(at a competitor).
Anyone have any experience/advice/suggestions on taking a crack at this? I have no doubt the lender will blow it off, ignore it, delay, or otherwise tell me it's not possible.
(I need to clarify a few things. A)The current loan is not classified as investment, but residential)
Is anyone familiar with approaching your mortgage lender and achieving a rate reduction-no refinancing, just an internal process.
I was in the car yesterday and flipping through the channels listened to Clark Howard for a spell and he discussed this very topic.
I have a BOA 30yr @ 6.375% on a piece on a rental property I own in Atlanta. About 5 years in on the loan.
Basically listening to what Clark had to say, he said the bank would prefer to lower the rate somewhat as opposed to losing the loan to a refinance(at a competitor).
Anyone have any experience/advice/suggestions on taking a crack at this? I have no doubt the lender will blow it off, ignore it, delay, or otherwise tell me it's not possible.
(I need to clarify a few things. A)The current loan is not classified as investment, but residential)
This post was edited on 6/9/11 at 2:34 pm
6
Posted on 6/9/11 at 2:38 pm to atl4tigerfan
I've never done this, but I imagine it's pretty simple - just pick up the phone and ask. All they can say is no.
Posted on 6/9/11 at 3:11 pm to foshizzle
quote:That's the worst thing that can happen and if you never ask, you start at "no."
All they can say is no.
Posted on 6/9/11 at 3:56 pm to atl4tigerfan
This is a damn good idea. Let us know how it turns out....
Posted on 6/9/11 at 4:33 pm to atl4tigerfan
Worked for me. Got almost as good a rate as if I had refinanced.
They did give sort of a wiggle room disclaimer, saying they could go back to the original rates if they so chose (i.e., I wasn't 'locked in'), but that they had "never" done so in the past.
I rolled the dice with them about a year and half ago and went with it. So good, so far.
They did give sort of a wiggle room disclaimer, saying they could go back to the original rates if they so chose (i.e., I wasn't 'locked in'), but that they had "never" done so in the past.
I rolled the dice with them about a year and half ago and went with it. So good, so far.
Posted on 6/9/11 at 4:44 pm to Y.A. Tittle
How did you approach it? I just called to ask for the hell of it and they were just like WTF....never heard of it
Posted on 6/9/11 at 4:49 pm to Y.A. Tittle
Also, I'm not sure how much if at all this played a factor, but before contacting them, I had gotten a new rate quote from one of those online mortgage deals and that's what prompted me to contact them, telling them I had gotten a new quote. They were the ones who came back to me with the 'Rate Reduction' proposal. I guess they might have done the same thing, if I had just called out of the blue and asked for that, but I guess it couldn't hurt to have an extra bargaining chip.
Posted on 6/9/11 at 5:05 pm to Y.A. Tittle
If what you did was a "mortgage modification" then it will hurt your credit.
Posted on 6/9/11 at 7:36 pm to atl4tigerfan
quote:
but residential)
NASA WE Have a Problem
Posted on 6/9/11 at 9:28 pm to LSURussian
quote:
That's the worst thing that can happen and if you never ask, you start at "no."
That's what I was getting at, I phrased myself inaccurately.
You don't need any special preparation, asking for a refi quote is perfectly normal in the mortgage business.
ETA: Wait a sec, I just realized you have a residential mortgage on an investment property. Hmm - I might not want to call my current lender then. Sorry, I misunderstood. In that case you may already be getting better terms than competitors will offer. That being the case, I'd call a couple of competitors first to get a feel for the market.
This post was edited on 6/9/11 at 9:33 pm
Posted on 6/9/11 at 11:29 pm to atl4tigerfan
I work modifications for one of boa's competitors and the answer is probably no b/c the property is not owner occupied. For everyone else reading this thread its worth a shot but it will take a lot of time and paperwork.
Posted on 6/10/11 at 2:14 pm to OhioLSUfan
Just to clarify, we are talking about a rate reduction here, not a refi as it seems some are discussing.
Someone brought up the term mortgage modification and the impact on your credit. I'm not sure if this is a mortgage modification or not.
Basically I was listening to Clark Howard and a listener called in and had a question for Clark. She said, hey Clark I received an unsolicitated offer in the mail from my mortgage lender on my current loan offering to lower my rate with no closing cost, etc, etc. She thought it was a scam and wanted to hear his opinion. She had a 6.75% 30yr fixed and the offer was to lower it 1.5%. This WAS NOT a refi offer, just a rate reduction under the same terms of their current loan.
Clark agreed, saying it does sound too good to be true, however he went on to say the offer is legitimate and they've been getting calls nonstop about it. So his advice was to take advantage of it as the banks would rather lower your rate than lose your mortgage to a refinance(with a competitor).
As for my specific situation, I purchased this 'rental' property about 5 years ago, however when we purchased it we intended to move into it and turn the property we lived in into a rental(as opposed to selling it). Matter of fact we had it leased out before we purchased the new property.
Turns out we just ended up staying in our current property and renting out the new property we purchased. Both properties are identical and in the same townhome development literally doors down from each other.
The original lender was a 3rd party that ended up selling the loan to countrywide and then countrywide folded and BOA picked up the assets.
Bottom line is the holder of the loan could give a crap as long as the mortgage is paid on time, which it has been for 5 years now.
So obviously the refinance route is not one I want to head down as I might get forced into a investment rate.
So that is why I was asking if anyone had an experience achieving this 'rate reduction'. I actually tried it myself about a 1-2 years ago and they acted like they had no idea what I was talking about. Big shock there.
Someone brought up the term mortgage modification and the impact on your credit. I'm not sure if this is a mortgage modification or not.
Basically I was listening to Clark Howard and a listener called in and had a question for Clark. She said, hey Clark I received an unsolicitated offer in the mail from my mortgage lender on my current loan offering to lower my rate with no closing cost, etc, etc. She thought it was a scam and wanted to hear his opinion. She had a 6.75% 30yr fixed and the offer was to lower it 1.5%. This WAS NOT a refi offer, just a rate reduction under the same terms of their current loan.
Clark agreed, saying it does sound too good to be true, however he went on to say the offer is legitimate and they've been getting calls nonstop about it. So his advice was to take advantage of it as the banks would rather lower your rate than lose your mortgage to a refinance(with a competitor).
As for my specific situation, I purchased this 'rental' property about 5 years ago, however when we purchased it we intended to move into it and turn the property we lived in into a rental(as opposed to selling it). Matter of fact we had it leased out before we purchased the new property.
Turns out we just ended up staying in our current property and renting out the new property we purchased. Both properties are identical and in the same townhome development literally doors down from each other.
The original lender was a 3rd party that ended up selling the loan to countrywide and then countrywide folded and BOA picked up the assets.
Bottom line is the holder of the loan could give a crap as long as the mortgage is paid on time, which it has been for 5 years now.
So obviously the refinance route is not one I want to head down as I might get forced into a investment rate.
So that is why I was asking if anyone had an experience achieving this 'rate reduction'. I actually tried it myself about a 1-2 years ago and they acted like they had no idea what I was talking about. Big shock there.
Posted on 6/10/11 at 2:54 pm to OhioLSUfan
quote:
For everyone else reading this thread its worth a shot but it will take a lot of time and paperwork.
For me, I think it simply required me and my wife to sign one form, mail it back to the bank, and it was done.
I got a rate reduction NOT a refinance.
Posted on 6/10/11 at 5:33 pm to atl4tigerfan
quote:
Is anyone familiar with approaching your mortgage lender and achieving a rate reduction-no refinancing, just an internal process.
I did this two years ago. My original 30-yr mortgage is with Pentagon Federal Credit Union. I purchased my house in Covington in 2005 at 6.4%. Penfed lowered my rate to 4.5%. The rest of the loan terms remained the same. Minimal paperwork to close the deal. I was charged a 1% loan origination fee. This deal was strictly a lender specific deal. My $200+ a month I saved is being applied directly back to my principal on my mortgage. This will shave many years off my loan.
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