Posted on: 15th Apr, 2010 09:38 am
my mortgage company offered to refinance my mortgage at a quarter of a percent lower than i am currently paying. they will cover all closing costs. the mortgage will be a 30 year fixed the same as i have now. i have made all payments on time and have 25 years and 3 months left on my original mortgage. if i do this i will overpay to have the mortgage mature in 25 years and 3 months and will save approx. $20. per month. why would a mortgage company make this offer? is there any downside that i am missing? i have a 38% equity position at this time. the lender is wells fargo and the offer is called, "three-step refinance system."
Presumably they want to keep your custom in a competitive market. But it would still be advisable to shop around and see what other brokers are offering.
Depending on your current interest rate, you may be paying a bit more than the going rates therefore they've made you an offer so you dont refinance with another bank. The banks need to keep they're paying customers to compensate for the bad debts they still have. Tell us here within the community what your Current rate is and we should be able to tell you whether this is the Best deal out there for you. I hope this helps...
it behooves loan officers to discuss refinancing with their existing pipeline of customers. it's an easy way to get a loan to closing and collect a pay check, usually.
most customers look at it as a boon to their lives to have their loan officer (maybe it wasn't the LO in this case) call new, lower rates to their attention. inasmuch as it's only a quarter of a percent in this case, maybe it's not such a deal as promoted.
JK is right...lenders don't want to lose their customers...also, there's always money to be made when a new loan is made, whether it's a refinance of an existing loan or a purchase.
most customers look at it as a boon to their lives to have their loan officer (maybe it wasn't the LO in this case) call new, lower rates to their attention. inasmuch as it's only a quarter of a percent in this case, maybe it's not such a deal as promoted.
JK is right...lenders don't want to lose their customers...also, there's always money to be made when a new loan is made, whether it's a refinance of an existing loan or a purchase.
