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No Fee, 10-Yr Mortgage Refinance at 3.74%

February 7th, 2011 at 07:00 am

I considered it, but ultimately decided to pass.

An area credit union is offering this great deal: a no-fee refinance for 10 years at 3.74% with 1 point, or 4.74% with 0 points.

As you may know, I'm anxious to pay off my mortgage, or at least make it as inexpensive as possible for the duration of payments. But I long ago concluded it didn't make sense to pay $3,000 or $4,000 in closing costs on a $31,000 balance. I've aggressively pre-paid it down these past 15 years, and ramped that up in the past 3 years or so.

But the credit union deal caught my eye. I spoke to the director of refinances there and told her of my situation, namely, that while i have ample liquid assets and could pay the whole thing off now if I wanted, I do happen to be unemployed right now.

She said that would "be a concern." I told her my credit's great, over 800 last i checked. She said the unemployment situation would still be "a concern." But with no fees, I had nothing to lose, so i went online to pursue this a little further.

To be eligible for membership, you have to live or work in certain counties, which I do not. However, belonging to a church in those counties will also be enough to grant you membership. I could become a member of a nearby church in said county very quickly.

But then I saw you can't just become a member and then go for the refinance. You have to open some sort of checking or savings account, which is just a $25 minimum, but i really don't like to complicate my financial life unnecessarily, since i would never have any intention of further funding such an account as their rates aren't as good as my online money market.

I'm sort of on the fence about it, but mostly, I guess, I lost my enthusiasm about doing it. Because even with no further pre-payments, I'll have my existing mortgage paid off in 4 more years, and as soon as i do get a job, you can bet I will be prepaying my little heart out, and i plan to pay the whole thing off in 3 years once it gets down to about $9,000.

Going for such a juicy refinance would save me about $5,400 in interest payments, but i figure that once i get over the unemployment hump (a big if) my frugal habits of prepaying at least $100 or $200 a month will shave off some of those interest payments anyway.

In other news, Patient Saver was shocked at the still rising cost of heating oil this winter. Normally, Patient Saver would only need 2 fill-ups to get through the season: once in the summer, when prices are lowest, and once again in January/February.

But because Patient Saver decided to live in a tolerably warm home this winter (66/64)she did her 2nd refill Christmas week and now, with a quarter tank left, needs to do one more refill to get through to spring.

Today's price, after calling a half dozen discount heating oil places, was $3.36 a gallon. With a 150 gallon minimum at most places, that's $504 for my final fill-up. Shocking and OUCH that hurts!

7 Responses to “No Fee, 10-Yr Mortgage Refinance at 3.74%”

  1. Ima saver Says:

    I feel your pain. I have had to fill up twice this year (1000 gallon tank) My propane was $2.29 a gallon for a total heating cost this year of $2500. I keep my house at 64 degrees too!

  2. CB in the City Says:

    I'd pass on that, too. Just the fact that unemployment is a "concern" when you have the cash on hand to pay it off. Are they brain-dead?

  3. MonkeyMama Says:

    Traditional mortgages look to income over assets. The thing is, they can't go after your other assets if you don't pay up, so what do they care about your assets? We have seen a few people in the forums/blogs go through this over the years.

    Anyway, those promotions are generally iffy. For one, I found my own credit union to be very frustrating to deal with compared to a hungry banks or brokers. There was really no flexibility on a rate lock - they only gave me the choice of the interest rate on the day that my application was processed and maybe a window of a day or two. They were unwilling to wait a reasonable amount of time for rates to drop down to where they were the day I applied. (Having had loans with 2 brokers, a home builder, and Countrywide, if I Wanted to wait 90 days to lock in a rate no one cared - they'd hold my application indefinitely. Heck, I think I took a full year before I even turned in any paperwork and locked with our latest mortgage broker). No money exchanged until rate lock, anyway. CU wanted me to pay some fee and take the chance that rates would lower some time before closing. Rolleyes Though if they didn't lower - there was no point to do it!

    Likewise, I recently got a promotional offer for a 4% mortgage rate, I believe. I didn't want to deal with a new company and the rate was pretty much gone before I got it in the mail. Trusted broker said he could maybe get me 4% but not with a proper rate lock. Might get stuck with a higher rate if couldn't close fast enough - so no point in going with that.

    I think you may find some of these same issues, even if they worked through your employment status with you.

  4. NJDebbie Says:

    I just got my tank filled (400 gallons), the total was $1300. Ouch!!!!

  5. patientsaver Says:

    Debbie, if i had an oil tank that size, I would not fill the whole thing now. Why not just order what you think you need to get thru the rest of the winter, and then fill the tank completely in summer, when prices are lower?

  6. Jerry Says:

    Heating oil costs lead to a big problem for a lot of fixed-income people like the elderly in colder areas. I worry about that, because a winter like this one can really wreak havoc with people who have no insurance of being able to heat their homes without assistance when the costs get this high. Scary.
    Jerry

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