Can I Reduce My Mortgage Rate Without Refinancing

Here'south an interesting one. Is information technology possible to snag a lower mortgage charge per unit without refinancing?

While it's not all that hard to refinance a home loan, it does accept a chip of time and energy, and you lot generally demand to authorize for the thing.

Not everyone qualifies for a mortgage for one reason or some other, and the aforementioned goes for refinancing an existing loan.

For instance, if your credit score isn't quite upwardly to snuff, or yous don't have the required income to keep your DTI below key levels, y'all may not get approved.

This means you might be locked out when it comes to obtaining a lower mortgage interest charge per unit in times when rates are favorable.

There are also times when it but doesn't make much sense to refinance because rates are college or similar to what you've already got.

So what are you to do if you can't or merely don't want to refinance, but all the same want a lower rate? Well, there are some options to consider.

Just Call and Request a Lower Mortgage Rate

While not conventional or at all common, some folks have obtained lower interest rates just by calling up their mortgage lender and requesting ane.

I don't know who they are, but I've heard of it happening.

You need to bespeak that you take no interest in refinancing with them considering otherwise they'll but take you down that route.

Information technology'due south kind of similar to the old credit carte fob where yous phone up and say, "Hey, I'1000 sick and tired of paying 20% APR!"

And so they put you on hold and come back and tell you congratulations, your rate is now 12%. Withal bad, merely lower!

Perhaps it won't be that easy, or anywhere close to information technology, but sometimes it'southward only a matter of existence the squeaky wheel if you want a lower involvement rate.

Your chances might be ameliorate if the originating lender also services your loan (collects your payments each month). And if your existing rate is significantly higher than current rates.

If they believe you're going to accept your concern elsewhere, they might be willing to help you out.

Of course, at that point you lot could be request yourself why non just refinance to an fifty-fifty lower rate, assuming yous're able to.

Tip: Third Federal'southward Charge per unit Relock feature allows its ARM borrowers to relock their rate without refinancing at any time for a small fee.

Negotiate Directly with Your Loan Servicer or Lender

At that place are as well a number of programs geared toward those who are having trouble making payments each month, or difficulty refinancing via traditional means.

The ii notable ones over the by several years have been HAMP and HARP, both of which allowed homeowners to obtain lower mortgage rates via special authorities programs.

These accept been phased out, but replaced by permanent loftier LTV refinance programs fix past the likes of Fannie Mae and Freddie Mac.

In that location are also proprietary loan modification programs available (guidelines vary by individual lender) that may provide lower interest rates to existing customers.

Similarly, options take been rolled out to help homeowners afflicted by COVID-19, which include interest charge per unit reductions.

Again, if yous don't take the time to contact your lender/loan servicer, y'all won't know about them.

Take Advantage of a Mortgage Settlement

Thanks to some questionable practices by the large banks and loan servicers during the housing crisis, some lucky homeowners were offered lower mortgage rates as restitution.

A notable mortgage settlement between Bank of America and the U.Southward. Department of Justice resulted in ii% fixed mortgage rates for some fortunate borrowers.

Of course, they probably went through a lot to get that indicate. But one mutual theme is that not all homeowners pay attending to or take advantage of these things, and as such aren't duly compensated.

Keep an eye out for legacy claims, and if they utilize to you, it might exist possible to save some coin or secure a better charge per unit in the process, all without refinancing.

Streamline Refinances Tin can Be a Lot Easier

Fifty-fifty if y'all're not eligible for these programs or able to negotiate a lower charge per unit, it might exist possible to execute a streamline refinance.

As the name implies, it'southward a faster and easier way to refinance a dwelling house loan for the express purpose of securing a lower interest rate.

This option allows you to refinance without the typical requirements like a minimum credit score or maximum LTV, and with express paperwork. Y'all might be able to skip the appraisal too!

Fifty-fifty though information technology's technically even so a refinance, it should prove to be a lot easier to authorize, and information technology shouldn't be as painstaking of a process.

Look Into a Recast Instead of a Refinance

There's also the lesser-known loan recast, which like a refinance, can lower the monthly payments on your mortgage.

The difference is you're simply adjusting the acquittal schedule of the loan.

Permit's assume you've been paying extra each month to lower your outstanding residuum, which is great for saving coin long-term, but does nothing to lower subsequent monthly payments.

If you want your lower residue to be reflected in your remaining payments, you can request a recast from your lender or servicer, which will re-amortize the loan.

So you should have lower monthly payments going forward, without a refinance or the closing costs that come with it. There may be a small recast fee though.

The dazzler of the not-refinance route is that you also don't reset the clock on your mortgage. In other words, you don't extend the term with a fresh loan.

Pay More Each Calendar month and Enjoy the Same Savings

Another thing you can practice to salve money without a mortgage refinance is to simply pay more each month, assuming you've got the cash on hand to practise so.

This is yet another reason to fix aside greenbacks for a rainy day, or simply to better manage your debt when information technology'due south favorable to practice then.

The more than you pay above what you owe each month, the more you'll relieve over the course of your mortgage term, regardless of your involvement charge per unit.

In short, extra payments, such every bit biweekly ones or just an boosted payment each yr, lower the amount of interest you pay.

While your mortgage rate won't change, nor your minimum monthly payment, the amount of interest paid will, which is basically the same deal equally a refinance without all the paperwork and qualifying.

Go with an ARM and Hope for the Best

If yous want a self-service mortgage, y'all could too just go with an adaptable-rate mortgage, which will rise and fall over time as the economy does its thing.

While this might sound giddy, tons of homeowners who took out Arms prior to the recent housing crisis really wound up with rock-bottom involvement rates without lifting a finger.

They actually benefited tremendously every bit mortgage indexes hitting all-time lows, assuming they kept their homes and their original mortgages.

Of course, this isn't for the faint of heart, and the way things are looking at the moment, interest rates seem unlikely to go much lower.

Nevertheless, this is 1 mode to potentially lower your interest rate without refinancing. Or doing anything at all.

Utilize a Second Mortgage to Pay Off the Get-go

One final trick some folks use to reduce their mortgage involvement expense is opening a second mortgage to pay off the showtime.

This fashion they don't demand to refinance, which tin can be a bit more involved than taking out a second.

It's basically a form of arbitrage where interest rates are lower on the second than the commencement for one reason or another.

For example, if the interest rate on your first mortgage is well above going rates today, information technology could make sense.

This can be done with either a stock-still-charge per unit home equity loan or adaptable-rate HELOC. Merely information technology takes a chip (sometimes a lot!) of tinkering and coin management skills to get it washed.

So in the end, you might simply be ameliorate off refinancing your mortgage or sticking to some of the alternatives discussed above.

Can You Switch Mortgage Companies Without Refinancing?

Lastly, you might be wondering if it'south possible to switch mortgage companies without applying for a refinance.

For case, if you lot actually dislike the loan servicer you're currently assigned to, tin you lot asking a switch? The answer is essentially "no" considering you don't get to cull your servicer.

Sure, you tin pick the company that originates your habitation loan, but it will probable be transferred to a different company presently after. And you won't accept whatever say.

Nigh mortgage companies don't keep the loans they fund – they transfer them to 3rd-political party servicers that collect your payments year after year.

So yous should actually only business concern yourself with pricing and customer service during the loan process. After that it'll be out of your control.

If you truly can't stand your servicer, a refinance would exist i mode to go a new 1, merely you lot could potentially wind up with the aforementioned company all over again one time it'south transferred!

Read more: How soon can I refinance my abode?

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Source: https://www.thetruthaboutmortgage.com/can-i-lower-my-mortgage-interest-rate-without-refinancing/