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Possible for good payer to negotiate a low early morgage payoff?
Old 10-24-2009, 08:55 PM   #1
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Possible for good payer to negotiate a low early morgage payoff?

I have about 10 years left on a 15 yr fixed 5.5 mortgage...75k left of 105 origianal. Mortgage is about 860 and I pay 1150/mo to CCO.

Is there a chance that they would negotiate an early cash payoff? I know it doesnt hurt to ask, but I'm curious as to the best approach. Tell em "hey, i just got a lump sum settlement and want to pay this off now" or" hey, i'm self employed, work sucks, and i have a family member willing to do this for me" etc etc


Any ideas, advice? ? I have excellent credit and never defaulted on any payment of any kind
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Old 10-24-2009, 09:00 PM   #2
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They'll certainly accept payoff of the full amount. If you can pay part of the amount but not the full amount, I doubt they would even talk to you. They'd rather let you pay the monthly for the next few years including the interest. I can't think of a reason they would accept settlement at a discount from a good payer. BTW, that is not an excuse to become a bad payer. If you fall behind and then suddenly have a chunk of money, they'll just want you to catch up.

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Old 10-24-2009, 09:00 PM   #3
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They don't want you to pay it back. What are they going to do with the money? I think the chance is about nil of negotiating a discount. They will try to nickle and dime you for every cent they can.

My guess.
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Old 10-24-2009, 09:02 PM   #4
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What Rambler and Martha said. Chances are zero of them accepting any early payoff less than the full amount due.
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Old 10-24-2009, 09:05 PM   #5
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It never hurts to ask, but why would any bank willingly take a loss on a performing loan to a customer with sterling credit?
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Old 10-24-2009, 09:10 PM   #6
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that's what i figure, but i'm going to give it a shot.

wishful thinking, eh?
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Old 10-24-2009, 09:17 PM   #7
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I've heard of this happening when borrowers have mortgages with rates several hundred basis points below the current market rate, but not otherwise. And we're not in an interest rate environment where that's likely.
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Old 10-25-2009, 12:47 PM   #8
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that's what i figure, but i'm going to give it a shot.

wishful thinking, eh?
Good luck, always worth asking but I can't see why the bank would want to give a discount (and lose money in the process) on an early pay off by a good customer.
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Old 10-26-2009, 08:43 AM   #9
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They don't want you to pay it back. What are they going to do with the money? I think the chance is about nil of negotiating a discount. They will try to nickle and dime you for every cent they can.

My guess.
Agreed. When DW and I paid off the old house the first piece of mail we got from the mortgage company was an offer for a new mortgage.

We recently applied for and got a new cc account to replace one that was going to charge annual fees and the loan officer seemed disappointed that we had no interest in a HELOC.
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Old 10-26-2009, 09:19 AM   #10
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some years ago i came into a lump sum and told one one mortgage holder (private party) that I could pay off him or another note - if he would reduce the interest rate on his note I'd pay off the other one. He didn't want to reduce his rate, so I paid him off. He was not happy - as I told him, it seemed odd that I should apologize to him for paying him, so I wouldn't.

If you have a couple notes and it's true you might try for an interest reduction on one and pay off the other..
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Old 10-26-2009, 03:26 PM   #11
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Ther's no chance of getting a discount on your mortgage if you want to pay it off early. Check to make sure there isn't a penalty for paying it off early.
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Old 10-26-2009, 03:48 PM   #12
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Ther's no chance of getting a discount on your mortgage if you want to pay it off early. Check to make sure there isn't a penalty for paying it off early.
Not in the current climate. Though in the early 1980s, when mortgage rates were in double digits, my parents did receive an offer from the lender to pay off their 4.5% mortgage at a discount.

Figuring the bank wouldn't offer unless it was to their advantage, they declined.

If mortgage rates suddenly spiked to 8% or more, I could potentially see lenders willing to give discounts to pay off 5% mortgages -- but again, that's nowhere near the current environment.
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Old 10-27-2009, 10:10 AM   #13
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Skip a few payments ... trash your credit ... then they'll talk (especially if your self employed). Until then, they're happy with the monthly payments.
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Old 10-28-2009, 09:46 PM   #14
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Skip a few payments ... trash your credit ... then they'll talk (especially if your self employed). Until then, they're happy with the monthly payments.
yeah,aint that some sh$#
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Old 10-29-2009, 12:59 PM   #15
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Not in the current climate. Though in the early 1980s, when mortgage rates were in double digits, my parents did receive an offer from the lender to pay off their 4.5% mortgage at a discount.
Of course the lender wanted them to payoff their old mortgage. And so long as the discount would comparable to that of a bond paying that interest rate, it would be a fair deal. Methinks that the lender did not want to give them such a great deal.
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