A fruitful trip to...the bank? These days?
Today I went to the bank (something I almost never do) to get a cashier's check.
The teller told me there was a $8 fee, but that we qualify for a much better checking account that would allow us to avoid the fee. In addition, we'd get free checks, some number (infinite?) of free ATM withdrawals from other banks' ATMs, and a bunch of other good ( Read more... )
The teller told me there was a $8 fee, but that we qualify for a much better checking account that would allow us to avoid the fee. In addition, we'd get free checks, some number (infinite?) of free ATM withdrawals from other banks' ATMs, and a bunch of other good ( Read more... )
Comments 13
I'd suggest sitting on the decision for a little while. Meanwhile, you do some research on your bank's solvency, what the refinancing rates are, calculate what your new costs would be each month (including that initial five-month closing cost recoup), and so on.
I like the sound of free stuff and deals, but you've got to wonder: what's the catch, here?
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Regarding solvency, our bank is Wells Fargo and I believe they're doing way better than most these days. The rates and the closing costs we'll have to confirm with an actual...refinancing person (?). The guy I spoke with wasn't qualified, he just ballparked it. He could be way off, but I do have co-workers that have gotten staggeringly low rates on their refis.
It seems like what makes all this stuff worthwhile is that our bank is also our mortgage lender, so we get benefits on our bank account for having the mortgage and benefits on mortgage stuff for having the bank account. It's all clearly designed to keep us "loyal," but as long as its win-win...
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And you're absolutely right--given an emergency fund tucked safely away and no other debt beyond student loans--doing the refi but sending extra money to your mortgage seems like an excellent idea. Well, as long as you feel certain that you'll make the extra payments. :)
Two other possibilities to look into are:
doing a refi for 20 years instead of 30--with enough of a reduced rate it might still lower your monthly payment.
whether your bank will do biweekly debits instead of monthly debits--which can save a shocking amount of money, as seen by the Bankrate.Com calculator here.
Good luck!
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Well, as long as you feel certain that you'll make the extra payments.
Or, alternatively, these days we could put it into another emergency fund labeled the "oh shit I lost my job" fund. Though, we already have an emergency fund and in truth, we could probably just barely scrape by on just mrsmetallian's salary if we had to...
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Most of the "sounds too good to be true" stuff involved either negative amortization - the debt gets larger over time, or resetting interest rates. Both are bets on the part of the borrower that they will be able to refinance cheaply later. You want to be better that you can steadily pay off the loan
I'll second the ideas of putting the reduction of monthly payments right back into paying off the principal. Or going biweekly if you can remember to pay the bank more often than your other bills.
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We just looked at this and decided not to but we have less than 10 years on our mortgage and the savings in interest didn't cover the cost to make the change. If you are looking at 20+ years the math will work in your favor.
Find out what percentage of mortgages the bank keeps and how many it sells. We used our credit union to be sure the mortgage stayed in house.
As for the checking account that's a good deal. Some banks won't include loan accounts in that calculation and look only at a minimum balance in checking, savings, CDs and other assets. We lock in the same deal with an active checking account and an attached CD.
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Having a loan sold won't change the terms however, no risk there.
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