Is the Chase New Lower Rate OK?

I received an overnight document from Chase telling me I had a locked in rate of 4.63 and no closing cost if I call them within 5 days. I currently am at fixed 5.50 on a 64K 30 yr. mortgage. Too good to be true? Is this a scam?

many variables exist but basically understand that you currently have a historically good rate already so don't sell your home anytime soon if you choose to refi...

- Ron A. - Jan 24, 2012 at 6:18PM
1 Answer

They may well be offering you a refi, which is great, but you need to look at the payoff amount versus the new loan size. The term "with no closing costs" is wonderful when it means you don't have anything due at closing OR rolled into the loan, BUT many lenders use it when they are rolling costs into the new loan, and the borrower just doesn't have to bring anything to the closing table. Especially if you had another lender pull your credit, Chase may think you're in the process of doing a refi, hence their interest in improving your loan and keeping your business, but just make sure your new loan is basically the same size as your current payoff. It's also important to look at the loan term. If you have 20 years left on the current loan, and they want you to take out a new 30 year, it may not be in your best interest, and the monthly savings are not accurate since you're stretching out the term. Bottom line, best to call the name of the loan officer on the package (assuming there is one!!), and ask him what the scoop is.