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I talked to my lender today and got a chilly reception. They basically told me my loan was "small potatos" and that a 1% rate difference wouldn't make such a big difference on such a small amount so why go through the trouble.
Good grief! I had no idea I was such a pauper!
My next phone call was to my old broker here in Raleigh. His reception was much better and we are currently exploring some options....
I talked to my lender today and got a chilly reception. They basically told me my loan was "small potatos" and that a 1% rate difference wouldn't make such a big difference on such a small amount so why go through the trouble.
Good grief! I had no idea I was such a pauper!
My next phone call was to my old broker here in Raleigh. His reception was much better and we are currently exploring some options....
Man that is outrageous! Sounds like they are overwhelmed with people wanting to refinance so they're focusing on the big ones with more bang for the buck. That's incredible tho. I can't believe how rude they were. Good luck with your old broker.
I locked a 30-yr refi fixed at 4.875% with a floatdown down to 4.625%, zero pts, and 1% loan origination fee. My breakeven point is 21 months.
Uhm a 1% origination fee is a point.
Points consist of an origination point(s) & a discount point(s). The origination point(s) goes in the pocket of the mortgage broker for "Originating the loan". A discount point(s) goes to the lender to buy down the rate.
I talked to my lender today and got a chilly reception. They basically told me my loan was "small potatos" and that a 1% rate difference wouldn't make such a big difference on such a small amount so why go through the trouble.
Good grief! I had no idea I was such a pauper!
My next phone call was to my old broker here in Raleigh. His reception was much better and we are currently exploring some options....
Wow. I'd love for you to post the name of your lender, but a private message would work too. I'd like to see what that same lender would say to me. Though the lender may have stated some clear facts, it's not for them to judge or label you and your loan as insignificant as a small potatoe. Let me at 'em, NRG, let me at 'em.
Points consist of an origination point(s) & a discount point(s). The origination point(s) goes in the pocket of the mortgage broker for "Originating the loan". A discount point(s) goes to the lender to buy down the rate.
Oh okay. Marketing verbiage then. That's how it is listed. Well either way it makes sense for me to refi now since I'm currently paying 6.25%.
Though the lender may have stated some clear facts, it's not for them to judge or label you and your loan as insignificant as a small potatoe. Let me at 'em, NRG, let me at 'em.
Umm, actually the lender has every right to refuse your loan as small potatoes. They make their money off loan origination fees and points. If your balance is too low, then they don't make money. Plus I doubt NRG has an escrow account, so they won't be able to put the screws to him there either.
I have always had small mortgages and have often been told exactly the same thing by lenders. Ditech.com does not even talk to people who are less than 150K in debt (last time I called--which was years ago).
Congratulations to NRG for his low debt level! Someone will finance his loan, but he will no doubt pay a higher interest rate than someone with big debt.
I talked to my lender today and got a chilly reception. They basically told me my loan was "small potatos" and that a 1% rate difference wouldn't make such a big difference on such a small amount so why go through the trouble.
Good grief! I had no idea I was such a pauper!
This could make sense. If you only owe $10k on your house, then paying $1500 in fees may not make sense. If you owe $200k on your house, then it makes a lot of sense. Every situation is different.
I am sure that all the lenders are absolutely swamped right now.
For small loan amounts, credit unions or a bank you hold accounts at is usually the best. As was mentioned, if you think of 1-2% in fees on a $50,000 loan... its not much. On a $250,000 loan the same 1-2% is substantial.
Unfortunately, lenders and Realtors are paid on a % basis. The attorney, underwriter, appraiser, inspector DOES NOT care if your loan is $5 or $500,000.... because they make flat fees regardless of the loan amount. Its unfortunate both for the lender and the home owner, because small loans get less service and large loans pay far more than the service is worth in some cases.
I think there should be a flat fee service on the lending side, but there isn't. The closest thing to it will be a credit union. Lenders like Ditech say it in their fine print on their ads. Those great rates they offer are usually based on loans >$250,000. Thats because the spread that they make of 1-2% isn't worth it unless the loan is large enough. For smaller loans, they have to increase the rate/fees to make the X hours of work and expense that goes into a loan yield a good return.
Every lender is different. Some I work with won't take loans <$125,000 at all. Some will go down to $40,000 BUT they will increase the rate/fees to compensate. Its all about profitability.
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