Chase Refinance - No Cost

[Dog]

We have our mortgage with Chase (used to be WaMu). In January, Chase sent us an Express Mail letter notifying us that we could refinance our existing mortgage to a lower rate at no cost to us. We missed out on the opportunity because we vacationing in Hawaii. I called them when we returned home, but they could not extend the time.
Last week they sent us another Express Mail letter with the same offer (expires this coming Tuesday).

Our existing loan is 5.5% - 30 year. They offered to refinance our existing balance at 4.88% for 30 years. We had to answer about 10 questions that would be reported to Fannie/Freddie (some are below):

- Original cost of home
- Purchase Date
- Both employed?
- Any bankruptcies
- Any leins against property
- Is it our primary residence
- Verify employment on one of us (employer, title, address of employer and phone# to verify)

All costs associated with the refinance are waived. Lowers our monthly payment by $260/month at no cost. Once the paperwork is completed they send a notary to our house. No cost - no hassle! We both have steady jobs and excellent credit.

Well, we jumped on the opportunity. Save $260/monthly at no cost/hassle to us. We plan on selling the house when the conditions are right - so the 30 year mortgage doesn't concern us.

Almost seems to good to be true.....what am I missing?

[Gone4Good]

Quote:

Originally Posted by Dog Almost seems to good to be true.....what am I missing?

A quick look says that Wells Fargo's conforming 30 year rates are at 4.5% . . . so 4.88% isn't exactly 'free'. But the 'no hassle' aspect is worth something.

My guess is that they're trying to encourage existing customers with above market rates to refi with Chase rather than go elsewhere.

[Aiming_4_55]

I agree "no hassle" is worth something.

The Wells Fargo rate just dropped to 4.5% on Friday. The cost of the refi with Wells is 1% + closing cost which adds up.

Perhaps you can call Chase and see if they can reduce the rate further with the recent rate decrease.

[powerplay]

Hopefully you aren't missing anything.

I was able to refinance my mortgage 2 times through Wells Fargo for no cost. It was done through their website and they sent out a close at home package with papers to sign and have notarized. WF even included a mailer to send the signed papers back to them. Each refi I was able to reduce my interest rate and the number of years financed. I thought it was a great deal and one time I was given a website to go to where I could order a free gift. Think I ordered a DVD player. WF didn't really send me an offer, rather I read about it on Fat Wallet and went to the WF website to see if I was eligible and found I was.

[Dog]

Thanks. I've heard and read that people are paying points and paying to have their homes appraised to qualify for a refinance to lower rates. Just wondered why?

[Patrick]

Check out these guys. They have the lowest rates I've seen. I just did a 3.25% 10-year with them. Mortgage Rates | Get Current Mortgage Rates in Seconds

[gerntz]

That other places are offering lower rates than Chase is no reason to not take something for apparently nothing. Then justify the costs elsewhere of even lower. I think 1% refinance costs are about the same cost as a +1/8% interest over the life of a mortgage, but you pay them upfront. Maybe even a 1/4%.

[Patrick]

Quote:

Originally Posted by gerntz That other places are offering lower rates than Chase is no reason to not take something for apparently nothing. Then justify the costs elsewhere of even lower. I think 1% refinance costs are about the same cost as a +1/8% interest over the life of a mortgage, but you pay them upfront. Maybe even a 1/4%.

If you're going to refi the Chase loan right away, you might as well go with the lower rate loan to begin with. It saves you the paperwork.

If you're going to refi to Chase now, then refi that loan later, it costs you the difference in interest due to the higher rate on the Chase loan for the time that you keep that loan. And you still have to do the paperwork twice.

[Patrick]

Quote:

Originally Posted by Dog Thanks. I've heard and read that people are paying points and paying to have their homes appraised to qualify for a refinance to lower rates. Just wondered why?

Paying points can be a net winner over time, depending on how long you keep the loan. You really need a calculator to figure out if you'll be ahead or not. Here's a site with some calculators: Points Calculators

I had to pay to have my house appraised when I refied. The then-current lender wouldn't lower my rate to one comparable to Amerisave's, and Amerisave wouldn't refi it without a new appraisal. So I paid for an appraisal and came out a winner overall. Tiger's Blood!

[gerntz]

Quote:

Originally Posted by Patrick If you're going to refi the Chase loan right away, you might as well go with the lower rate loan to begin with. It saves you the paperwork. If you're going to refi to Chase now, then refi that loan later, it costs you the difference in interest due to the higher rate on the Chase loan for the time that you keep that loan. And you still have to do the paperwork twice.

That's true if the loan elsewhere is zero cost too. Otherwise, the costs of the other loan are a net + on their interest rate. Also, the paperwork & time to execute on the other loan could wind up a complication that isn't worth it to a borrower.

[Patrick]

Quote:

Originally Posted by gerntz That's true if the loan elsewhere is zero cost too. Otherwise, the costs of the other loan are a net + on their interest rate. Also, the paperwork & time to execute on the other loan could wind up a complication that isn't worth it to a borrower.

Absolutely. The customer should evaluate the total cost of all options before deciding on one.

And "no-cost" loans are rarely really no-cost. The customer should make sure that all the costs associated with the new loan are paid by the lender. Sometimes they just cover their own fees but "roll" the third-party fees into the loan. If the OPs "no-cost" loan is this type, then it behooves him/her to evaluate other options before signing with Wells Fargo. Once those fees are paid he/she can't get them back, even if the loan is later refied with another company.