My Mtg. Co. called and offered to reduce my rate.Admittedly my rate was relatively high because I haven't refinanced since we have been contemplating selling.

They said they were doing this for the reason that they were loosing a lot of their retained loans to refinances. It's a "streamlined" refinance which involves about $1500 in closing costs which can be rolled into the new loan and no underwriting is required. They are doing this for their "seasoned" customers.

In my case it will result in about a $100 reduction in mo. payment and since it will be for a 15yr instead of 30, will reduce term by about 1 1/2 yrs. All terms and conditions of the current Mtg remain as is.

Sounds a bit strange,but what think Ya'll?

-- NewHam (KindaWonder@Mtg.com), November 07, 1999

Answers

You should ask for a written Good Faith Estimate from your mortgage company ahead of time, so can see what this will cost you and if this $100 saving is TRUE. Do not roll in your closing costs into the note! you'll be paying interest on them for 15 years!

It is a bit strange that they're soliciting your business when mortgage interest rates are the highest in over 24 months. Most mortgage companies who normally concentrate on refinancing are hurting BIG TIME right now... they will do anything to get your business even if there is a TINY saving.

-- jake melon (feds@re.watching.not), November 07, 1999.

If your thinking about selling, don't do it. The finance company is going to make $1,500 off of you, and it will take you a long time to make that $1,500 up. Shop around for refinancing if you plan to stay in your home, there might be a lender around that will refinance at a cheaper rate with no cost to you.

-- bardou (bardou@baloney,.com), November 07, 1999.