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Got The Mortgage Reduction Offer from Chase - graylocks - 11-12-2012
after hearing of other people getting it in the past year and assuming i was simply not eligible, UPS delivered a mortgage rate reduction letter from Chase today. with no appraisal and all fees waived my mortgage rate could be reduced from 6.125% to 4.125%. I owe $54,000 on this loan and am underwater with that. i also have a $28,000 out on a line of credit so there's no way i could hope to refinance other wise.
i have a few questions but their offices are closed today so i thought i'd pick the forum brain as someone else might have done this.
1. Is this for a new 30 year loan or can i keep going on my current time frame? With pre-payment of principal i've gotten it down to a 25 year loan and have been enjoying the feeling of pecking it down.
2. This offer holds even with the HELOC if it was with a bank they listed but it's not. They say there are other options in that case. Anyone know what those options might be?
Re: Got The Mortgage Reduction Offer from Chase - dmann - 11-12-2012
I'm exploring my refi options as well. Not sure what other things you have looked at and it depends on how underwater you are, but the broker I am working with is offering the following via HARP: 15 year mortgage at 3.75% (my current 30 year is at 5.25% and I am 9 years in.)
I have a closed HELOC with Chase and am paying principal + interest at a rate of 8%. With that amount and the amount I owe on the primary mortgage, I am flat to slightly underwater.
I have a pretty good amount of CC debt, but I manage it well
I am self employed and have been for over 5 years
I have a very good credit score
It looks like my monthly payment will go up about $85/month if I do the refi, and I'll pay about $2,000 in closing costs. Even with "losing" the 9 years I've been in my place, I'll still be saving 6 years over the life of my current mortgage and a good amount of interest paid. The main downside for me is that I can't roll the HELOC into the new mortgage and save some $$ there.
Not sure if any of this helps you, but I'm looking forward to what others have to say!
DM
Re: Got The Mortgage Reduction Offer from Chase - Will Collier - 11-12-2012
They've offered me a couple of times (former WaMu mortgage), but my rate was already very low, and I'm just over five years away from being paid off anyway.
Re: Got The Mortgage Reduction Offer from Chase - graylocks - 11-12-2012
thanks, dmann. i haven't even looked at refi since i'm underwater by about $20,000 on the first and i've heard it's hard to refi $54,000 anyway. plus i think HARP is only for Fannie/Freddie loans which mine isn't. this offer from Chase for customers in good standing is an effort to show the Feds banks can be nice too.
i'm semi-self-employed and other than the HELOC no CC debt. i have an excellent credit score. still, i doubt there are other refi options out there for me.
Re: Got The Mortgage Reduction Offer from Chase - Jimmypoo - 11-12-2012
BETTER CHECK THAT THEY DO NOT ISSUE 1099-C FORMS IN THE AMOUNT OF THE REDUCTION!
THEY HAVE 3 YEARS TO DO SO, AND YOU GET ONE, AND THE IRS. THE REDUCTION IS REPORTED AS INCOME, BE IT A REFI/RELIEF, LOST CREDIT LINE WRITTEN OFF, ETC.
IT’S BEEN AROUND SINCE MID-90S. THE CURRENT THRILL IS THREATS TO SEND THOSE OUT IF YOU DON’T START PAYING ON PAST-DUE BILLS/CREDIT (even though the statute of limitations expired).
ONCE THE IRS GETS IT, IT GENERALLY TAKES TAX COURT TO RESOLVE IT. LAST THING YOU NEED IS A TAX BILL (AND SE TAX) EXPECTED ON $20K YOU DIDN’T MAKE. THAT’S 15.5% + YOUR BRACKET + STATE.
ASK QUESTIONS!!! GET IT IN WRITING!!
Re: Got The Mortgage Reduction Offer from Chase - graylocks - 11-12-2012
poo, Chase is offering to reduce only my interest rate not the amount of the loan.
Re: Got The Mortgage Reduction Offer from Chase - space-time - 11-12-2012
yes, I think only the interest, the amount should be the same, so no 1099-C I believe.
So you have a 54k at 6.125% and 28K at ???%
http://www.drcalculator.com/mortgage/
for the 54k at 6.125% with 25 years left you would be paying around $352. total payments would be $105.6k assuming you stay there 25 years from now on
if you go with a new loan for 30 years, at 4.125%, your new payment would be $261 and total payments (if you stay there 30 years) would be $94.2k
I would refinance.
On the other hand, see if they give you an even better rate for 20 years, maybe a 3.5% for 20 years, and then you would pay $313/month (LESS THAN WHAt YOU PAY NOW) and total ymanets would be $75.2k.
heck, even if you taje the 4.125% offer but pay faster (in 20 years) would would pay $330 (STIll LESS THAN WHAT YOU PAY NOW AND YOU FINISH 5 YEASh FASTER) and total payments would be 79.3k.
Play with that calculator and analyze different scenarios. balance monthly payment with total payments. How lond do you plan to stay there?
Also, what about the 28k HELOC, is that also with chase and part of the offer?
sorry for those Caps, I wanted to emphasize the key facts
Re: Got The Mortgage Reduction Offer from Chase - mattkime - 11-12-2012
http://www.bogleheads.org - great financial advice.
Re: Got The Mortgage Reduction Offer from Chase - graylocks - 11-13-2012
thanks for running the math space-time. now I have a starting point for playing with the calculator. the
HELOC is tied to Prime and has held at 3% for the last three years. I don't expect prime to rise any time soon but I do need to dig out the paperwork. I dimly recall that there were X amount of years for withdrawal and then it converts to a fixed payback period.
I was planning on continuing with the payment I'm making now even if my actual payment gets lowered. either that or pile more into the HELOC.
Re: Got The Mortgage Reduction Offer from Chase - Jimmypoo - 11-13-2012
All you need to do is encourage Jr. to take 1 class during each summer session, never return perm, and
rent out his room to this lovely and highly susceptible to suggestion “waif", for $375/month.
If you can help her “socially” she will be indebted to you. I’ll even offer to help get her through the
adjustment period of a new place, different surroundings, the leather restraints, etc.
It could be very rewarding.
Look at her!! She is SO PAINFULLY socially awkward… you can see it in her eyes!
I can feel her pain…
You can see she is losing her “niceness” and needs guidance and a good home with a strong woman,
that will also take her rent money! (and who knows someone as philanthropic as myself!)
It just seems like a win-win for everyone. You could teach her to play banjo. I could help out a few times a week to change her diaper.