My Best Mistake in a While

[Christopher Scott]

Given the current interest rate environment my wife and I decided to refinance our primary home. I'm always on the look-out to decrease my monthly payments and at 2.5%, how could I say no?

As anyone who's done this before knows, as soon as you submit an application and have a background check run, your lenders start getting nervous. They don't want you, their loyal customer who has been paying on time for years, to go somewhere else. In the past I have typically avoided these phone calls and deleted the emails because I've often already checked with my current lender to see if they have a better rate and have frequently found that the lenders for my rental properties really can't lower my rate at all on a non-owner occupied unit.

This week I picked up the phone from a unknown number (what I thought was a mistake) and it was the lender for my very first rental property, a condo I bought 10 years ago. I've been with them ever since and have never had a missed or late payment. When I realized who it was after he introduced himself and noted we were on a recorded line I have to admit, I was kind of rude (turned out to be my real mistake). After my 30 seconds of laying out why I didn't want his call and how he couldn't help me he politely said "well, maybe we can do something, let's take a look." 10 minutes later I had a loan modification with an adjustment down on my interest rate by 1.5%! 

This isn't a refinance, I'm not changing any loan terms other than the interest rate. Still 20-years left on my 30-year mortgage, no points, no appraisal, just a $400 fee which I will recoup in less than 4 months.

So I guess the point is, if you haven't contacted your lender in a while to see about rates, take a look, they may be interested in modifying (not refinancing) your mortgage to keep you there, especially if you are a reliable customer. And, be nice to the guy on the other end of the line, he may just save you $1200/year in 10 minutes.