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Wednesday, June 9, 2010

Call Your Bank

These days the big banks are not enjoying good press, and maybe that's appropriate on a corporate level, but our local branch has been treating us very well, and has just saved us a bundle of money.  A big bundle.

Our banker suggested that we move some of the money in our checking account into a savings account that does not provide overdraft protection to our checking account, so that if our checking account were compromised, we wouldn't lose everything in it to a thief.  At the same time, she said she'd have Sylvia call me back about saving some money our our mortgage, which we have with the same bank.  Before I forget, I should also mention that this bank provides us with our Visa account, which we use like cash and pay off every month.  If we need something big, we save for it first, buy it with the Visa, and then pay it off right away.  But the one percent rebate we get is applied directly to the principal on our mortgage, so it's free money to us.  Gotta love that.  But back to the mortgage savings.  Sonia, our branch manager, also told me that our out-of-bank transfers should happen at no charge, so if we were charged the three dollar fee I should call her and get that refunded to me, which I did today.  I also mentioned that Sylvia hadn't called me yet, which Sonia had her do.

It turns out that we qualify for a Fannie Mae three step HARP (Home Affordability Refinance Program).  The three steps are that they will send us a copy of the disclosure for our records, and then in July, we'll receive the loan package that includes the original copy of the disclosure statement, which we'll have to sign and return to the bank, and then the third step is that we'll close on the thirty-first of July.  This loan refinancing will cost us nothing; the only charges that might occur are the recording fees, which our bank will pay.  Evidently, the rates and offers change all the time- Sylvia told me that she's had some people call and there were no offers available at the time.  So what came up today were three offers: a thirty year fixed at five and an eighth percent, which would save us $105 a month; a twenty year fixed at five percent, which would cost us thirty-one dollars more a month, and a fifteen year fixed at four and a half percent, which would cost us another $155 a month.  The last one sounds good with a nice low rate, but we figure that if the chips fall against us, that extra $155 we'd be obligated for could make life a lot harder for us, so we opted for the twenty year fixed at five percent.  I usually pay extra principal every month anyway, because we really want to be done with this mortgage as soon as possible, and because I can right now.  So even with some of the extra money I have for the principal going into the actual mortgage payment, we'll still save a scad of money.   Steve did a rough, rudimentary calculation.  How much will we save?

Try $64,560.  That's not even counting the extra principal from our Visa or that I pay every month.

Call your banker and ask them to look into whether you qualify for HARP.  If you do, it will so be worth your while.

1 comment:

Toni aka irishlas said...

We just did this with a Fannie Mae - 15 years at 4.25%. A little more each month and with putting extra on the principal like you, we hope to have it done and over with in 10 years when the hubsters can retire. Ah, the American Dream....