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-   -   Possible for good payer to negotiate a low early morgage payoff? (http://www.early-retirement.org/forums/f28/possible-for-good-payer-to-negotiate-a-low-early-morgage-payoff-46990.html)

thefed 10-24-2009 08:55 PM

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

Rambler 10-24-2009 09:00 PM

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.

R

Martha 10-24-2009 09:00 PM

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.

REWahoo 10-24-2009 09:02 PM

What Rambler and Martha said. Chances are zero of them accepting any early payoff less than the full amount due.

Gone4Good 10-24-2009 09:05 PM

It never hurts to ask, but why would any bank willingly take a loss on a performing loan to a customer with sterling credit?

thefed 10-24-2009 09:10 PM

that's what i figure, but i'm going to give it a shot.

wishful thinking, eh?

ziggy29 10-24-2009 09:17 PM

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.

Alan 10-25-2009 12:47 PM

Quote:

Originally Posted by thefed (Post 868595)
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.

Walt34 10-26-2009 08:43 AM

Quote:

Originally Posted by Martha (Post 868589)
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.

calmloki 10-26-2009 09:19 AM

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..

mn54 10-26-2009 03:26 PM

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.

ziggy29 10-26-2009 03:48 PM

Quote:

Originally Posted by mn54 (Post 868978)
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.

tryan 10-27-2009 10:10 AM

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.

thefed 10-28-2009 09:46 PM

Quote:

Originally Posted by tryan (Post 869234)
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$#

swampwiz 10-29-2009 12:59 PM

Quote:

Originally Posted by ziggy29 (Post 868987)
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.

:rofl: 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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