Chase Refi

[btctony]

So this feels too good to be true, but maybe I just haven't been paying close enough attention to refi offers lately. I received a Chase refi offer via Fedex like someone else that I saw here received. My offer is a 30 year fixed @ 2.875%. Chase pays all closing costs. I spent about 90 minutes on the phone with them the other night going through all of the application questions, running my credit, etc. The entire time I'm sitting here waiting for a catch to come and it never did. The only difference between my current mortgage and this offer seems to be the interest rate. The rate I received 6-7 years ago when I purchased my home was 5.125%. This will save me around $240 per month. The loan amount is about 1K higher than my current loan balance due to funding an escrow account. Apparently they won't let you fund it with cash, but it's really a non-issue. When I receive the disbursement from my current escrow account and apply that to the principal of the new loan, it will match my current balance.

I keep thinking that something is going to come up that requires me to shell out cash or something they are going to try to roll into the loan. Is there anything that I should be keep an eye out for?

[Jluke]

Did they provide a good faith estimate?

Offers like this seem to be the norm now (bogleheads talk about this).

they probably don’t want you to refi elsewhere.

[btctony]

Yes, they provided a good faith estimate. Maybe I'm just paranoid. I hate dealing with big, crooked, and greedy financial institutions. So it's just second nature for me to think very long and hard about how they might be trying to screw me. My mortgage is my only debt and hoping to have it paid in full in a few more years. If this ends up being legit, it shouldn't even take me the full three years.

[Scallywag]

Question : does a good faith estimate have to be within a certain % of the actual closing & borrowing charges? How does this work?

[btctony]

I have no idea, Scallywag. But there are zero closing costs or other charges that I am responsible for in this offer. They are line items on the estimate, but then each fee has an identical credit, because Chase is paying for all of it.

[disneysteve]

You’ve been in your house for about 7 years. Why are you considering a new 30-year loan? You only have 23 years left. See what they’ll do on a 20-year loan instead. Don’t add an extra 7 years.

[btctony]

Thanks for the suggestion, Steve.

[disneysteve]

Thanks for the suggestion, Steve.

We did that with one of our refis. I only ever heard about 15 and 30 year loans but they'll do other durations too. We went to a 20 at one point.

[srblanco7]

We did that with one of our refis. I only ever heard about 15 and 30 year loans but they'll do other durations too. We went to a 20 at one point.

Agreed. We started with a 30-year, refinanced to a 15-year term, and then again to a 10-year term. Ended up paying off in roughly 17 years.

[bjl584]

I agree with Steve.
Don't reset the clock.
I did a refi about 2 years ago. Went from a 30yr to a 20yr
My next move will be to go to a 10yr if the numbers make sense to do so.

[riverwed070707]

I don't know what your original loan amount was so I can't give you an accurate visual but strongly encourage you to look at the interest savings over the life of the loan for all these scenarios in support of what others are saying about not resetting the clock - its not just about the time savings, its about the $10s of $1000s of interest savings. Example:

Orig. $300k mortgage @5.125 - if you kept this loan and did nothing, you'd have paid $288,046 IN INTEREST over the life of the loan

New options:
Lets say you have paid on it 7 years and now have a $263k balance. To date, you've paid more than $90k in interest already

If you refi at 2.875 for 30 years, you will pay an additional $130k in interest over the next 30 years. Add that to the $90k you've already paid and total you've spent $220k financing your loan ($68k LESS than your original loan terms! Yay!)

Now let's say you refi at 20 years and they give you 2.5%. Your payment likely still goes down a little, your loan will be paid off 3 years sooner than you're currently on track for and your total interest for this loan is only $71,746 ($126k less than your original loan terms and $59k less than the new 30 year loan.

What would you do with an extra $126k in your pocket? Easy choice IMO!

[LivingAlmostLarge]

I am the person who got 30 year fixed from chase 2.875% with a fedex letter on my doorstop. TAKE IT. Also just sign it because it doesn't restart your mortgage but just fixes it for the same time frame. At least for me it did. I had 7/1 Arm started in 6/2017 for 3%. I had no cost "refi" to 27 year @ 2.875%. They lowered the rate and they fixed it for the rest of the loan. I am never changing unless of course there is a drop because I don't want to pay for refi. FWIW I did have to pay around $800 because I had started a refi with BofA for 30 year fix for 2.625%. But i had to pay. This was free soo...i ended up paying for appraisal.

[btctony]

LivingAlmostLarge,

Why did you have to pay $800 for appraisal? Not sure I understand. Isn't the appraisal part of the fees that Chase takes care of?

[Jluke]

Not all lenders pay for the appraisal.

or in LAL case maybe appraisal had to be paid since they didn’t go through with the refi with BofA

[LivingAlmostLarge]

It was $800 to BofA for the refi, no fees to chase.