to good to be true?

[terces]

Okay so we never jumped on the refinance bandwagon since our mortgage is low and we plan to sell in a few years. Didn't seem to balance out if we had to pay closing costs.

Just got a letter (UPS next day) from our mortgage company offering us a reduced rate with no closing costs. Part of their "rate reduction program". Only thing that we may have to pay is any interim daily interest and change to tax and insurance escrow accounts.

Anyone else get something like this from their mortgager? Seems like a gimmick but I'm gonna give them a call to see what's the deal.

[kork13]

Have you asked your mortgage company about refinancing or anything to do with their "rate reduction program"? If so, cool. If not, I would approach this with a rather suspicious outlook -- as in, I would question if it was actually your mortgage company (and not some sort of scam or phishing/identity fraud scheme). Does your mortgage company normally send correspondence to you via UPS next-day? That seems fairly abnormal, especially if you haven't asked them about the program they're advertising to you. It's not cheap, especially compared to the 17 cents or so they would pay for a standard letter through the USPS.

I would call a phone number that you know for certain is your mortgage company, like from a mortgage statement (don't use any phone number, email, or website from the UPS'd letter). Ask if they UPS'd a letter to you regarding the program. If not, report the letter to them as a probable scam.

If so, and they can assure you that the letter is legitimate (I would be surprised), ask for specific details on the offer. Mortgage companies still have to (and will be sure to) make a profit, and using UPS next-day is no way to start. There is likely a catch, a hidden fee, or something involved that will sour the "deal". Be very careful, because even if the letter was legit, the company's advertising may not be.

Bottom line, be careful. As you know--"seems too good to be true" normally means it probably is.

[terces]

Great info....thanks.

I am hesitant with it anyway because it re-ups me to a 30 year mortgage.

[disneysteve]

I am hesitant with it anyway because it re-ups me to a 30 year mortgage.

Assuming the deal is legit, I wouldn't let that stop you. Just use an online calculator to figure out how much you need to pay each month to be paid off on the same time line as with your current loan (or even sooner). The simplest thing is to keep making the same payment even though the required payment drops.

[MonkeyMama]

I don't think it's *too good to be true.* The banks want you to refi with them rather than refi elsewhere. It's a fairly common practice.

I admit the "UPS next day" thing does sound a bit like a red flag. Usually they just call or send you a normal letter or e-mail. But a quick google search shows this may actually be legit. Is it Chase?

You are in a good bargaining position - you can also ask about a shorter time frame for the loan, etc. You may find a better deal elsewhere.

[crazyskunk82]

Look into the options and ask if they offer a 15 year mortgage. It isn't as high a payment as you'd expect, and it will save you tens of thousands of dollars.

[disneysteve]

Look into the options and ask if they offer a 15 year mortgage. It isn't as high a payment as you'd expect, and it will save you tens of thousands of dollars.

Or get the 30 but pay it off at a rate that will retire the loan in 15 years. That gives you a bit higher rate but much more flexibility with your money. If something comes up and you need that extra money, you aren't locked into the higher payment.

[minnie1928]

I admit the "UPS next day" thing does sound a bit like a red flag. Usually they just call or send you a normal letter or e-mail. But a quick google search shows this may actually be legit. Is it Chase?

Wells Fargo did this with us a few years ago and it was totally legit.

[Frugal]

I too would be rather suspicious about this, until I talked to my bank. You never know nowadays, and it does not hurt to verify things.