Home Refinance

[studenygreg]

I get several letters from mortgage companies, bank, CC, etc offering to refinance my home at a lower interest rate. Even my current loan holder. Can anyone explain why they are so aggressive right now? What is in it for my current lender to refinance at a lower rate? I can't think of a good reason they would want less money.

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[AZ Refugee]

I went through the same thing, my guess is its easy money for your current lender to refinance. When I did mine about a year ago, they did not do an appraisal or have to verify our employment, they used all the info from the previous loan. My payment went down and they made a few bucks for little effort.

 

[Daley_G]

What's in it for your current lender is some level of assurance they keep you as a customer vs. you going somewhere else. With interest rates at an all-time low, lenders are well aware their customers are shopping around.

 

[pronstar]

Lenders aren’t making money loaning hundreds of thousands of dollars at an interest rate that’s below inflation.

99% of the time, your lender doesn’t hold the note, they sell it on the secondary market, where it is then bundled with other loans/debts to become part of a larger mortgage-backed security.

The other 1% of the time, the originator holds the note, and these are called portfolio lenders. It’s not super common, and typically have both higher rates and pre-payment fees.

For the offers you’re getting, those companies (including your current lender) make money via the various origination associated with the loan.


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[toddnjoyce]

I get several letters from mortgage companies, bank, CC, etc offering to refinance my home at a lower interest rate. Even my current loan holder. Can anyone explain why they are so aggressive right now? What is in it for my current lender to refinance at a lower rate? I can't think of a good reason they would want less money.

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No such thing as a free lunch.

Fees (payable now) are rolled into the re-fi resulting in increased principal. Might be as little as $5K in fees, but that books as soon as the loan closes. Then, in a year or so the paper is securitized or sold and rinse, lather, repeat.

 

[oldag]

I get several letters from mortgage companies, bank, CC, etc offering to refinance my home at a lower interest rate. Even my current loan holder. Can anyone explain why they are so aggressive right now? What is in it for my current lender to refinance at a lower rate? I can't think of a good reason they would want less money.

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They are afraid you will refinance with someone else.

You may or may not pay fees.

Some years back when rates were at their lowest, I looked at refinancing. When they found out I intended to refinance, the loan company holding the current note offered to refinance at the same rate as I was being offered and they charged no fees.

 

[studenygreg]

My loan changed hands 3x withing the last year. Very annoying

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[baboon]

Follow the money!

 

[studenygreg]

Follow the money!

Thats what I am trying to figure out.

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[toddnjoyce]

Thats what I am trying to figure out.

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Here’s a good primer on various reasons why a mortgage keeps getting sold.

Why Does My Mortgage Keep Getting Sold?

Why does your mortgage get sold and why can it happen multiple times? Banks and mortgage servicers constantly run the numbers to determine your value.

www.realtor.com

 

[Texas45]

The only refi Im going to do is in about 18 mo when I become the true Title Holder.

Then I will refi by letting someone else deal with a mortgage company.

Pay off my land and GTFO of the city for good.

BTW I get offer to sell daily. Unsolicited which means round file. I AM interested in selling but NEVER would I deal/sell with an unsolicited recvd via mail email or text offer.

Just tossed one that said your offer is 156,xxx. Pay all associated cost no repairs hell even rent it back to ya.
Round file!.


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[avvidclif]

Refinance what???? I paid cash for it.

 

[studenygreg]

Refinance what???? I paid cash for it.

Okay. Thanks.

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[Eli]

They all want to sell you their product.

There is some deception in the industry, those 'no cost' guys roll those costs into the loan so you spend 30 years paying for it instead of amortizing it over a couple of years.

I've been in Real Estate professionally for over a decade, and am happy to refer anybody looking to refinance a single-family home to some great professionals.

Refinance what???? I paid cash for it.

Why?

Eli

 

[ArmyDub]

What is the current rate 2%? We should look at refinancing.

 

[Hoji]

I get those too. The calls I will string them along and then break it to them that my home is paid for and refinancing just does not seem like something I need.

 

[Fishkiller]

I got about 4.5 years left on my current mortage. No good reason to refi. Once it is paid off I get to keep the money. Finance people always tell ya to have a mortage for tax write offs. What’s buch of BS. Pay it off and keep the money

 

[Texas45]

Better yet are the ads for the reverse mortgage.
Stuuupiiid.


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[Eli]

The reason to refi a paid-for or nearly-paid property is to 'cash out' and invest the money elsewhere. You can borrow for 30 years at less than 3% - considerably lower than the rate of inflation - so the money is 'free' and can be invested in things that will produce considerable income - and a lot of tax advantages.
Take, for example, a paid-for $250K 'primary residence' home. You can easily borrow $200K out at less than 3% interest (which is tax-deductible) and buy 4 similar $250K rental properties. While the interest isn't tax-deductible on income properties, the properties can be depreciated (ask your tax professional), and there a lot of other tax advantages - in assets that will not only produce income, they generally appreciate.
Ever notice how many wealthy people hold their wealth in Real Estate?

Eli

 

[avvidclif]

They all want to sell you their product.

There is some deception in the industry, those 'no cost' guys roll those costs into the loan so you spend 30 years paying for it instead of amortizing it over a couple of years.

I've been in Real Estate professionally for over a decade, and am happy to refer anybody looking to refinance a single-family home to some great professionals.


Why?

Eli

Retirement and no house payment.