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Mortgage modification

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  • Mortgage modification

    So I approached my bank about a refinance and they told me I can get a rate of 3.375% down from 4.375% but it will cost 8k.
    I said try again.
    Now they tell me it would be cheaper to do a modification. It will cost 1% of the value of the mortgage which is about 300k. Plus a $250 fee. So $3250.
    Anyone heard of a modification?
    Also still seems kind of pricey. It would take 2 years to recoup.
    I asked why the charge is based on the amount and not a flat rate. I have not heard back. Maybe the lawyers need to charge more to write bigger numbers.

  • #2
    My bank let me do a modification about 8 years ago (1 year into the mortgage)for a flat $1500. I made it back in about 8-9 months with the lower interest rate. Rates dropped again and I did it a second time about 15 months later. It worked out for me since we are in the same house.


    • #3
      Why don’t you approach another bank? If they think they’re going to lose the mortgage they may not be so quick to let you walk.


      • #4
        I did. The competing Banks had similar or higher fees and taxes. NYS take a portion of any refinance unless the issuing bank does some paperwork to get around the taxes. I guess banks do not play ball with each other for obvious reasons.


        • #5
          Biggest scam is having to pay title insurance again when you refinance


          • #6
            I know. Dealing with this process makes me realize how much I would like to get rid of the mortgage once and for all. But I understand the benefits of leverage so paying over 15 years as quick enough for me.


            • #7
              Okay here is the best numbers I was able to get after trying around to several banks.  Please help me figure out if it is worth it to proceed.  Seems like it is to me but I would love a second (or third, etc) opinion

              Original mortgage 328000 @4.375% 15 year fixed

              Currently   316000

              Can Modify the rate to [email protected] and keep the term ending at the original 15 year date.

              The cost is $3400.

              I attached the spreadsheet that @ENTDoc made with my info inputted.

              Looks like it would save me several thousand over the life of the loan and increase my cash flow monthly a little bit.

              Any information that I am missing?

              Questions and comments appreciated.

              Thanks for the help!



              • #8
                I’d do it if I were fairly certain I was going to stay in the house for the next 10-15 years.


                • #9

                  I’d do it if I were fairly certain I was going to stay in the house for the next 10-15 years.
                  Click to expand...

                  Unless something catastrophic happens my next move is to the nursing home.