When we purchased our lake house, we used a little bit of money from our home equity line of credit. We had never used the line of credit but had it sitting there in case we had an emergency, or a good opportunity. When we got the loan, we locked the rate at 7.49% because we didn’t want to have the fluctuating risk. Of course it was just our luck to borrow the money when the rates were at their peak.
Fast forward 1.5 years and rates have gone way down. I called my credit union and asked to have the fixed rate lowered to 5.99%. They said, no problem and mailed me a form to sign. A few days later, our rate was lowered 1.5% just from making a phone call! While that doesn’t change our payment amount, it does shave many months off of our loan.
That got me to thinking, is this possible with a primary mortgage? Has anyone ever been able to get their 30 year fixed rate mortgage lowered simply by calling and asking? The sense that I get is that it’s not possible with primary fixed rate mortgages.
QUESTION:
Do you know anyone that has lowered their primary mortgage with just a phone call, or do you always have to “refi”?
There is something called a ‘rate modification’, which costs much less than a refi but does lower the primary mortgage interest rate. I found this which explains it better than I ever could.
I inquired about it with my lender a while back and they could not get the rate as low as current market. I think they offered to lower our rate half a percent or something.
Yes – most mortgage companies have what they call the “accelerated ownership program” where if your loan is in good standing, you are eligible for a lower interest rate (market rate) for what it would cost you to get some loan modification papers notarized. We just did this for about $20 (cost of $5 per notary seal). I can give you more details if you like.