The aftermath of my mother's death has left me dealing with a small financial windfall, which led, by divers means, to talking to my bank about refinancing my home.
Now, this is something I really should do; I bought at the wrong point in time, my initial lender was Countrymark, which was snapped up by Bank of America who are, after all, BoA, with all the warmth and personal touch you might expect from a mega-megabank. The interest rate is terrible--
But I'm used to it. With homeowner's insurance and real-estate tax rolled in, my house payment is a predictable expense, and setting up a mortgage was stressful enough once. Still, shaving five years off my remaining payments for a 10% increase in home much I pay each month is certainly appealing.
My bank's home-loan guy is...too eager. Pushy, even. It gets my back up, and all the more when he exhorts, "Do it now! Lock in the rate! It's going up!" Yes, well-- It's been going up for awhile now, and it's still not close to the rate I'm paying. Plus, the appraisal process seems intrusive and time-consuming. So I don't think I'll be doing it just yet.
Banks used to be less annoying. Stuffy, sure. Stodgy. Snooty. But they'd by-golly take a hint and back down.
BUILDING A 1:1 BALUN
4 years ago
8 comments:
The bank guy is probably trying to make a monthly quota . You can gently remind him that he's not the only bank on the block if he gets too aggressive .
Having a good relationship with 2 banks is a cheap insurance policy .
Glenn
Talk to a local credit union for another option.
Our first mortgage was with Countrywide. We had a VA mortgage so no impound account and they didn't like that. Having to mail in property tax statements twice a year to prove I paid them was OK. I drew the line when I was told the homeowner's insurance policy they approved to fund the mortgage was no longer sufficient and I would be enrolled with *their* provider and my monthly payment would be increased.
I refinanced with my credit union and never looked back.
I have USAA insurance (many policies) so I pay everything monthly, no huge annual payment for homeowners...
We had the same experience with a smaller bank being taken over by BofA. We just finished refinancing with BofA. Lower interest rate, lower term (15 yr vs 30) and wound up with a lower payment. For us it was a win-win.
Banks used to make money on the mortgage itself. Now they only make money on the fees from doing a new mortgage or a refi.
That said, there is good call to refi. Just don't let them add too many years to the life of the loan. Best to add zero years.
Beware! Have a real estate lawyer check the new mortgage to see if it is a non-re course loan. Some companies will steal you blind. The house alone should cover default- ie pay off the loan if you became disabled and could not work. A non-recourse loan they will forclose the house, "sell" it to themselves for a very low ball price (little as 25% of market/remaining loan value), and bill you for the difference. Thieves.
best bet for mortgages is to make extra principle payments. Early that can really accelerate your loans pay off.
Last thing you want is to retire and have loan payments. I admit I am not as dedicated as I should be but we are in the last third of our mortgage 10 years in. If things continue as they have I should be mortgage free in 4 more years.
Really looking forward to that.
I did a re-finance with Quicken Mortgage, now advertised on TV as Rocket Mortgage. Got a great rate, did everything by email and it was totally painless.
When it was time to sign the final papers, they had a very nice lady meet me at McDonald's on a Saturday morning. I had a cup of coffee and a biscuit. Twenty minutes later it was all over.
DCP
I was in nearly the exact same situation. I wound up with a slightly shorter term but a much lower payment. I kept putting off doing something because I didn't want the hassle of shopping around...but finally decided worst case was a much lower rate immediately, even if it wasn't the lowest possible, and I could do it again when I got around to searching for the lowest. I even got some pressure tactics--"make up your mind immediately or the underwriters will make us start everything over" "If I have to start over, I can just as easily start over somewhere else".
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