Profile picture for user9375795

Was contacted by my own mortgage co. and they say I qualify for a new program

that will lower my interest rate from a 4.5 to a 3.37. The original loan was for 30 years and 86,000 but I have been paying for about 15 years and owe 49,000 on the original loan. I have about 15 years remaining on the loan and my payment is $377.00 a month. They say at no cost to me they can modify the loan so it will be paid off in 12 years at a payment of 416.00 a month. I am skeptical and afraid that there is something hidden here that is a negative. They say that they are receiving federal money under the harp program for these kind of refinancing but I thought those programs were for house that were upside down and having financial difficulties which is not the case here.Just wondering what's up with this.
  • October 31 2013 - US
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Answers (4)

You have already paid the majority of interest on your current loan.  Use an amortization chart (found online) and add the difference to your current payment...you can probably pay it off in 12 years.  Seems like a lot of work for very little gain.

All my best,

Deborah
WJ Bradley
NMLS #279125

"We Listen.  We Care.  We Deliver."
  • October 31 2013
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You could achieve the same result (12yr payoff) by simply paying an extra $100 a month towards principle on the loan you already have. (estimated)
  • October 31 2013
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Profile picture for goodmortgage
It is common for mortgage companies to reach out to prior customers when new programs are available, or if rates change and they can save you money.  Just make sure 100% that it is your current mortgage company.  Often times other companies will send out flyers making it LOOK like it's your current company - when it is not.  Regardless, do your homework, ask questions and make sure the refi makes sense for you.
Good Luck!
  • October 31 2013
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Profile picture for zuser20140120081814583
Your numbers don't seem to work.  Principal & interest on $86K @ 4.5% should be $435.75/month.  Your remaining balance should be around $56K.

If you really owe $377/month & you start paying $416/month, you'll reduce the time to payoff even without some special program (assuming your loan has no prepayment penalties).  Without knowing your real balance or interest rate, I can't calculate how early you'll be done.  Three years early might be right.
  • October 31 2013
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