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My wife and I have received the same offer. We too are suspicious. With all the flim flam from t

My wife and I have received the same offer.   We too are suspicious.   With all the flim flam from the big lenders going on we are being very cautious.  One thing I don't see mentioned here as this "rate reduction" is discussed is the fact that initially most of the payment goes toward interest and not to principal, you are essentially starting over.   Our remaining loan amt has been paid down without recasting the loan. We only have about 15 years left on the original.  However a lower rate on the remaining amt and no closing fees sounds awfully good.  If their only reason for doing this is customer retention, then it's a great idea.  If there are hidden charges, fees, or some other bogeyman in the closet then it is not a good idea. The fact that there is a time limit on the offer makes the hair on the back of my head stand up. dk  Help!
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December 02 2010 - Hamilton
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I find it hard to believe that Chase or any lender for that matter would search for existing clients that own ajoing land free and clear to offer them a rate reduction so they can encoumber the ajoining land.  they have better things to do! and more profitable ventures!

If the ajoing land is in fact part of the rate reduction loan it is probably part of the existing loan. 
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December 22 2010
Profile picture for Dog Wood
We crunched the numbers on the Chase rate reduction program and when everything seemed alright, decided to pursue. The night before the closing we had not yet received the Good Faith Estimate paperwork. We called the attorney assigned to the loan closing and advised; we were uncomfortable closing without time to review the documentation. He emailed a copy of the closing documents.  To our chagrin we found they had collateralized not only the 5 acre lot deeded with the house but a significant amount of adjoining property not a part of the original mortgage but owned outright by us.   Our agreement with Chase was to the effect that the only changes in the new agreement were rate and time.  The moral of this story is read the contract!   We canceled the closing, and have yet to hear anything from Chase.  We must assume that either their staff is inept or the change deliberate.  REMEMBER READ THE CONTRACT!!!!!! 
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December 22 2010
Profile picture for sunnyview
You are 100% right dogwood. I am sorry about that and thanks for catching my mistype. That's what I get for posting without the proper amount of coffee. 

The fact that you are 15 years into your current loan would be a reason to run the calculators to see if you would come out ahead or not. Getting a new loan would start the amortization table over again with most of the early payments going mostly to interest. I think dinkytown.com also has a mortgage comparison calculator that might help you break down the numbers compare whether a refi would make sense or not at this point in your loan.
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December 02 2010
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I'm sorry Sunnyview, perhaps I am mistaken but I thought the majority of the payment went to interest on the front end and not the principal.
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December 02 2010
There are always Marketing material being sent to homeowners, so it will get you to call them.  They offer you a lure and hope you take the bait.  They want to put a sense of urgency, so you will feel more pressure to call them sooner, than not at all.  If you're interested in refinancing, then you are correct about starting over.  If you want to keep your mortgage payoff to be on track, then it may be worth your while to see if a 15 year fixed makes sense for you.  As for closing costs, it may depend.  Every person's situation is different.  If they're unable to do a No Cost loan that will makes sense for you, then you may want to compare your monthly savings vs. the closing costs.  How soon will you recoup those costs?  If it's less than 2-3 years, then it may be worth it, as you will be enjoying 10+ years of savings.  Can't blame you for being suspicious.  A lot has happened over the past few years.  Best of luck to you.
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December 02 2010
Profile picture for sunnyview
Whenever you restart a mortgage, most of the money in payments on the front end go to principal. If you are half way through your loan I would see if Chase would offer you the rate reduction on a 20 year loan and see if that would lower your payment. The shorter term might still reduce your interest by a bit.

You might also want to see if you can refi through the HARP program sponsored by Fannie/Freddie here. If you do, they will do a no/low cost refi to lower your interest rate up to 125% That site has a Freddie/Fannie lookup hotlink to see have a loan that qualifies. I think that program ends in April so that may be part of Chase's urgency since after that time they lose government sponsorship of the refi costs.

Ask a lot of questions. Run a refi break even calculator here and you can compare mortgages here to see what makes sense. I read a lot of stuff on Zillow and off and I have no heard any bait and switch stories on this Chase program. I think that the main "catch" is that the interest rate is a little higher than the street rate to cover some of the fees on the banks end. Run the numbers and see if it make sense for you since you're half way through the term.
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December 02 2010
 
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My wife and I have received the same offer. We too are suspicious. With all the flim flam from t
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Latest answer by Andrew Adams
December 22 2010 | 6 answers
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