Asking current mortgage holder to reduce interest rate

[Anonymous]

Anyone had any success with this? We are thinking of refinancing because the interest rates are so low right now. In searching the internet I found that some folks suggest first checking with your current lender to see if they will reduce your rate to keep your business. Any advice on how to argue for a rate reduction? Better to do it in writing or on the phone? We are currently with Wells Fargo. TIA!

[Anonymous]

Anonymous wrote:Anyone had any success with this? We are thinking of refinancing because the interest rates are so low right now. In searching the internet I found that some folks suggest first checking with your current lender to see if they will reduce your rate to keep your business. Any advice on how to argue for a rate reduction? Better to do it in writing or on the phone? We are currently with Wells Fargo. TIA!

Torn on this one. On the one hand, I doubt Wells Fargo owns your loan anymore so not sure what, exactly, is in it for them to do this. On the other hand, I think my parents had a Wells Fargo loan and did a surprising affordable refi with them. But they're not just going to reduce your rate. It doesn't work like that.

[Anonymous]

I've heard of people reducing the interest rate on their credit cards just by asking and lowering their phone bills by asking, so it stands to reason this could be done. The difference is that a mortgage is set up as a XX year contract, and is much bigger obviously.

I think it doesnt hurt to ask, especially if you are in some financial hardship which may prevent you from makng payments down the road. They're more likely to want a reduced interest rate and a up to date borrower than to deal with a foreclosure

[Anonymous]

The servicer does not have any incentive to assist. We tried it and eventually refinanced with another company.

[Anonymous]

You can call it whatever you want, but it's a refi -- so you might as well talk to as many lenders as you can.

[Anonymous]

Anonymous wrote:You can call it whatever you want, but it's a refi -- so you might as well talk to as many lenders as you can.

it's a loan modification w/current lender - you can reset the rate and clock stays the same. if you switch to a new lender, it's a refi and you are reset to a 30-year clock (assuming 30 yr mtge here). loan mod is much easier on you paper-wise (no closing -- just some docs from your lender), but a pp is right that lender may not have incentive to change.

[Anonymous]

never hurts to ask

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can call it whatever you want, but it's a refi -- so you might as well talk to as many lenders as you can.

it's a loan modification w/current lender - you can reset the rate and clock stays the same. if you switch to a new lender, it's a refi and you are reset to a 30-year clock (assuming 30 yr mtge here). loan mod is much easier on you paper-wise (no closing -- just some docs from your lender), but a pp is right that lender may not have incentive to change.

The incentive would be to keep my business (although rates are so low they may not care). I can refi, but it's a huge hassle, and I have to pay closing costs. But, if they knock the rate down a bit, I'd forgo the refi, even if the refi was for a slightly lower rate. I don't need a modification, but I do have the opportunity to save some money, and I will do that with another lender if they won't accommodate me.

[Anonymous]

Anonymous wrote:Anyone had any success with this? We are thinking of refinancing because the interest rates are so low right now. In searching the internet I found that some folks suggest first checking with your current lender to see if they will reduce your rate to keep your business. Any advice on how to argue for a rate reduction? Better to do it in writing or on the phone? We are currently with Wells Fargo. TIA!

Just call them and see. I did, and despite the saved closing costs their quote still wasn't competitive.

[Anonymous]

My boss just did this- they made a large principal payment and negotiated a modification of the note at the same time.

[Anonymous]

With BBT, I had to refinance to get a lower rate. But, they made it very easy.

[Anonymous]

We are also with Wells Fargo. Just over a year ago we did a zero cost refi with them - all we had to do was get the large packet they mailed us notarized. It was some program they had (have?) for borrowers who paid on time. I know for a fact our loan was owned by Freddie Mac at the time. Always a good idea to check with your own servicer first.

[Anonymous]

OP here. Thanks for all the advice! I called Wells Fargo and told them I was considering refinancing and asked if they would reduce my rate. They just referred me to their refinancing folks. I asked them about the zero cost refinance and it turns out that we do not qualify because we have an FHA loan (they only do those for conventional loans). But I did get a couple of quotes from Wells Fargo for conventional loans that would reduce our payments.

Another question for you guys - anyone used United Mutual Funding Corp for their mortgage loan? They have a really low interest rate advertised on bankrate so I'm a little skeptical....

[Anonymous]

Anonymous wrote:OP here. Thanks for all the advice! I called Wells Fargo and told them I was considering refinancing and asked if they would reduce my rate. They just referred me to their refinancing folks. I asked them about the zero cost refinance and it turns out that we do not qualify because we have an FHA loan (they only do those for conventional loans). But I did get a couple of quotes from Wells Fargo for conventional loans that would reduce our payments.

Another question for you guys - anyone used United Mutual Funding Corp for their mortgage loan? They have a really low interest rate advertised on bankrate so I'm a little skeptical....

i would be skeptical too. never heard of them.

bankrate's rates are almost never in line with what lenders actually charge anyway.

[Anonymous]

We did this. It's not a refi, but the company lowered the rate because we said we would redi with another company if they didn't. There is a term for it, and it doesn't affect your credit. We had to pay about $1000 in costs.