The last few weeks I have discussed different options that you may have when facing foreclosure and what you can do to get yourself back on track with your bank. This week I am looking at a slightly different topic but one that I think will be of great interest to many people.
Did you know that you can get your interest rate lowered without refinancing, without starting a new mortgage, and without paying any large refinance fees? It's true! Banks are people too and like people they are willing to negotiate and work with you to get you what they want. The secret to getting a lower interest rate may seem complicated but it's not. The secret is to call your bank and ask! Simply ask your bank for a lower interest rate.
Now, I know what your thinking, why would my bank just give me a lower interest rate? In order to understand this you must look at things from the other side of the table. The bank is in business to collect money from the money that they loan out. If you call them and say Hi Mr. Banker, I am planning to refinance my loan so that I can get a lower interest rate. But if you can give me a lower interest rate on my current loan I will stay with you.
Now the bank wants to continue collecting your money because after all you have been making payments for the last couple of years and they look at you as a cash cow, always paying your mortgage. If they lose you then they have to find someone to replace your cash flow and they have to hope that person pays on time. So it's easier to just give you a lower interest rate and keep collecting money from you than to go through all that.
The advantage for you is that you don't have to lose the years that you have already paid into your mortgage. It's a great way to save money and it's quick and easy. Once you call the bank and explain you would like a lower interest rate some banks will not allow lowering your interest rate. Sometimes it's because of the type of loan you have and some banks just don't do it. But it never hurts to ask and you could end up saving yourself thousands of dollars over the next couple of years.
The lowering of your interest rate is commonly known as a loan modification. Here's a little bonus... this technique can also be successfully used with credit cards or any other debts that you pay interest on. The principles of this technique are still the same.
Just so you know the only real requirement for this technique is that you call and ask. Everyone qualifies for that. So give it a try and see what happens. Till next time Good luck and God Bless and remember... If you have any questions about saving or selling your home or any topics on real estate that you would like to know more about please email me and I will answer your questions in this column.
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