# Re-finance my mortgate with NO closing fees? Scam? **URL:** \ **Category:** Factual Questions\ **Created:** [April 20, 2011, 8:31pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127 "2011-04-20T20:31:05Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Mahaloth](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mahaloth/32/1079_2.png) [@Mahaloth](https://boards.straightdope.com/u/Mahaloth)\ **Post date:** [April 20, 2011, 8:31pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/1 "2011-04-20T20:31:05Z")
Chase bank owns my morgate and they overnighted me…what looks like a great deal, but at the same time strikes me as a scam. 1. They say they can lower my interest rate by 1%(down to a pretty good level from a decent level). 2. They say that his level is locked in and is not variable and can not change. Our current rate is also not variable. 3. We have to call them by Monday, April 25. Why would they require us to take action so quickly? Here is what their included FAQ says: Q: This offer sounds too good to be true. Why would Chase offer to lower my rate and charge no fees or closing costs? A: Because: \*\*-Today’s lower interest rates: we’ve locked in a special fixed rate for you that is lower than your current rate - but we can only hold this rate for a few days, so you must call now. We’re trying to offer lower rates and payments to all eligible customers, like you. - Low processing costs - Since we are your mortgage company and because of your strong payment history, we can refinance your loan without asking for things like an appraisal. This lowers the cost to process your loan…and we are passing the savings on to you.\*\* Is there some hidden scam to this? ---
**Author:** ![Gus\_Gusterson](https://avatars.discourse-cdn.com/v4/letter/g/85f322/32.png) [@Gus\_Gusterson](https://boards.straightdope.com/u/Gus_Gusterson)\ **Post date:** [April 20, 2011, 8:42pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/2 "2011-04-20T20:42:42Z")
It is not a scam. It’s called the Chase Mortgage Rate Reduction Program. They overnight invitations to eligible mortgage account holders. They overnight the letter because you’re more likely to actually read it than if they mailed it, since some people toss anything that looks like junk mail. You fit the profile of someone who is likely to refinance and they want to keep you as a customer. Most people refinance with a bank other than the one that holds their mortgage. Call them. It will take very little work and you will get the lower rate. They typically close these loans very quickly, so the whole thing can be done in a couple of weeks. You can read about some people’s experiences with this program in this thread on Fatwallet: [Chase Mortgage Rate Reduction Program kinda rocks!](http://www.fatwallet.com/forums/finance/1010575/) ---
**Author:** ![ChockFullOfHeadyGoodness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chockfullofheadygoodness/32/511_2.png) [@ChockFullOfHeadyGoodness](https://boards.straightdope.com/u/ChockFullOfHeadyGoodness)\ **Post date:** [April 20, 2011, 8:43pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/3 "2011-04-20T20:43:18Z")
> [@Mahaloth](#): > > Q: This offer sounds too good to be true. Why would Chase offer to lower my rate and charge no fees or closing costs? Because interest rates are really low right now, so refinancing is a good idea, and they don’t want you to refinance with someone else. The short reply time is to cut down the amount of time you have to comparison shop. Don’t worry about the urgency, I get one of these offers from CitiMortgage about every three weeks. Always using Fedex overnight, always breathless, never good enough to be worth doing. (I’ve got only 8 years left on my 4.25% fixed) They \*are \*charging you closing fees, the fees are just folded into the interest rate. Use an online mortgage refinance calculator to see if the offer makes sense for you. But it is legit. ETA: What Gus said. ---
**Author:** ![astro](https://avatars.discourse-cdn.com/v4/letter/a/9dc877/32.png) [@astro](https://boards.straightdope.com/u/astro)\ **Post date:** [April 20, 2011, 8:47pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/4 "2011-04-20T20:47:21Z")
> [@](#): > > Because interest rates are really low right now, so refinancing is a good idea, and they don’t want you to refinance with someone else. This. I did the same thing with Wells Fargo. Not a scam and saved me some real money. Lots of paperwork to fill out. You’re basically reapplying for a mortgage. ---
**Author:** ![Gus\_Gusterson](https://avatars.discourse-cdn.com/v4/letter/g/85f322/32.png) [@Gus\_Gusterson](https://boards.straightdope.com/u/Gus_Gusterson)\ **Post date:** [April 20, 2011, 8:50pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/5 "2011-04-20T20:50:17Z")
One thing to keep in mind is that your loan term will start over. That is, if you are a few years into a 30-year mortgage, after you refinance you will be back to having 360 payments to go. This results in a somewhat lower payment and will cause you to pay a bit more interest over the term of the loan (though still less than you would have paid at the old, higher rate). To avoid this, continue paying the amount of your original mortgage instead of using the new payment amount. More of each payment will go to principal and you’ll pay the loan off faster. I can show the math if this isn’t clear. ---
**Author:** ![Gus\_Gusterson](https://avatars.discourse-cdn.com/v4/letter/g/85f322/32.png) [@Gus\_Gusterson](https://boards.straightdope.com/u/Gus_Gusterson)\ **Post date:** [April 20, 2011, 8:53pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/6 "2011-04-20T20:53:30Z")
> [@ChockFullOfHeadyGoodness](#): > > Don’t worry about the urgency, I get one of these offers from CitiMortgage about every three weeks. Always using Fedex overnight, always breathless, never good enough to be worth doing. (I’ve got only 8 years left on my 4.25% fixed) It costs you nothing and lowers your rate. How can it not be worth doing? As I noted above, if you keep paying your old payment amount instead of the new payment amount, you will still pay the loan off in 8 years and you’ll save on interest. I can’t think of a downside. ---
**Author:** ![The\_Second\_Stone](https://avatars.discourse-cdn.com/v4/letter/t/bbe5ce/32.png) [@The\_Second\_Stone](https://boards.straightdope.com/u/The_Second_Stone)\ **Post date:** [April 20, 2011, 9:27pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/7 "2011-04-20T21:27:50Z")
Chase has such a program. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [April 20, 2011, 9:30pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/8 "2011-04-20T21:30:07Z")
> [@Gus\_Gusterson](#): > > It costs you nothing and lowers your rate. How can it not be worth doing? As I noted above, if you keep paying your old payment amount instead of the new payment amount, you will still pay the loan off in 8 years and you’ll save on interest. I can’t think of a downside. At just eight years the interest savings may not be greater than the cost of toiling over loan paperwork. 🙂 ---
**Author:** ![Topologist](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/topologist/32/3208_2.png) [@Topologist](https://boards.straightdope.com/u/Topologist)\ **Post date:** [April 20, 2011, 9:38pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/9 "2011-04-20T21:38:07Z")
I recently refinanced my Chase mortgage with them. What took my breath away is that, even with restarting the mortgage term (I was a few years into a 20-year) and rolling the low, but still present closing costs into the mortgage, I saved money no matter how I looked at it. My monthly payments are significantly lower, there was no upfront out of pocket expense, _and my total interest over the life of the loan was reduced._ Yes, I did the comparison correctly; math of finance is a chapter in the textbook I wrote. Took my breath away. The only way this made sense for Chase is that it kept me from jumping to another bank. ---
**Author:** ![Mahaloth](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mahaloth/32/1079_2.png) [@Mahaloth](https://boards.straightdope.com/u/Mahaloth)\ **Post date:** [April 21, 2011, 12:04am UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/10 "2011-04-21T00:04:04Z")
K, so as long as I require them to make my payments stay the same, it sounds like a real deal. Thanks, folks. ---
**Author:** ![Gus\_Gusterson](https://avatars.discourse-cdn.com/v4/letter/g/85f322/32.png) [@Gus\_Gusterson](https://boards.straightdope.com/u/Gus_Gusterson)\ **Post date:** [April 21, 2011, 8:58am UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/11 "2011-04-21T08:58:05Z")
> [@Mahaloth](#): > > K, so as long as I require them to make my payments stay the same, it sounds like a real deal. The required payment will be lower since the interest rate will be lower and the term will be reset. There’s nothing they can do about that. You will have to send in the original payment amount yourself. ---
**Author:** ![Keeve](https://avatars.discourse-cdn.com/v4/letter/k/f07891/32.png) [@Keeve](https://boards.straightdope.com/u/Keeve)\ **Post date:** [April 21, 2011, 11:05am UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/12 "2011-04-21T11:05:15Z")
I consider myself a pretty cynical person, and after having read all the above, there are still a couple of things I’m wondering… The banks are (or will be) under pressure from various directions to help out their customers who are having trouble paying their mortgage in this economy. One way to do this is with drastically better terms for the people who are unemployed or underemployed. The banks are reluctant to do that, so I’m wondering if this “Chase Mortgage Rate Reduction Program” is an attempt to make themselves look good at a smaller cost. In other words, even if they would truly get less money from **Topologist** and others, it would be much less expensive than some of the more drastic measures that some people have been clamoring for. And now, Chase can say “Look how many people we have in our Chase Mortgage Rate Reduction Program!!!” without it costing all that much. Along the lines of the above, the _really_ cynical side of me is wondering: If you accept this offer, will it disqualify you from something even better? ---
**Author:** ![Gus\_Gusterson](https://avatars.discourse-cdn.com/v4/letter/g/85f322/32.png) [@Gus\_Gusterson](https://boards.straightdope.com/u/Gus_Gusterson)\ **Post date:** [April 21, 2011, 12:22pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/13 "2011-04-21T12:22:41Z")
> [@Keeve](#): > > Along the lines of the above, the _really_ cynical side of me is wondering: If you accept this offer, will it disqualify you from something even better? The Chase program is a simple refinance. Nothing in the terms will prevent you from being eligible for any other program and you can refinance again if rates go lower. If you’re eligible for this program you’re probably not going to be eligible for any assistance program because they only make this offer to customers in good standing with good credit. Most assistance programs require you to actually be in default before they will help you. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [April 21, 2011, 12:57pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/14 "2011-04-21T12:57:46Z")
Ref **Keeve** ’s cynical angle… What banks \*really \*want now is stable customers who pay their debts on time. And they’re all in competition for what is really a precious and kinda rare commodity right now. So they’re falling over themselves to capture those customers. Before you take that “free” refi from your current lender, comparison shop the other majors. You might be surprised at what you can do. In banker-speak, they’re in a flight to quality. And you’re quality. ---
**Author:** ![Quercus](https://avatars.discourse-cdn.com/v4/letter/q/7ab992/32.png) [@Quercus](https://boards.straightdope.com/u/Quercus)\ **Post date:** [April 21, 2011, 1:19pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/15 "2011-04-21T13:19:25Z")
Just to be clear: the reason you’re paying no closing costs is because the interest rate is slightly higher than you’d get if they weren’t paying the closing costs. If you call them back and say “That’s a nice offer, but what rate will you give me if I cover closing costs?” you’ll get quoted a lower rate, just like when you’re originally getting a mortgage, you can pay extra points to get an even lower rate. Usually, the longer you think you’ll be paying off the mortgage, the more it’s worthwhile paying closing costs or points to lower the rate. Also, you can refinance to different lengths of the mortgage; you don’t have to refinance to a 30 year starting from the refinance data. If you’re 11 years into a 30 year mortgage, you can refinance to a 20 year, and be on just about the same track to paying it off. ---
**Author:** ![Sigmagirl](https://avatars.discourse-cdn.com/v4/letter/s/c89c15/32.png) [@Sigmagirl](https://boards.straightdope.com/u/Sigmagirl)\ **Post date:** [April 21, 2011, 1:48pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/16 "2011-04-21T13:48:32Z")
My mortgage is with Fifth Third (it was originally with a local bank, but Fifth Third bought it, which annoyed me because I wanted to keep my business local, but Fifth Third has treated me well) and they have sent me these offer letters every couple of weeks for about six months, each saying that the offer is going to end soon and I’d better act quickly. Actually, we probably should do it; we’re just procrastinating. We have so little left on our mortgage and the payments are so low we could double up and have that sucker paid off in a couple of years. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [April 21, 2011, 2:10pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/17 "2011-04-21T14:10:52Z")
I did a similar refinance with Chase. My monthly rate went down over $400. Perhaps I could have negotiated an even better deal, but I know that I wouldn’t have gotten anything like this from another lender, due to the low equity I have right now. No money out of pocket, they came to my house for the closing, at worst I had to spend a few hours going over the documentation to satisfy myself that it was all straight. Best decision I’ve made all year. If I wanted to, I could go back to paying my old amount and pay off the loan faster than before the refinance, even with the closing costs rolled into the new loan. ---
**Author:** ![Folly](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/folly/32/3219_2.png) [@Folly](https://boards.straightdope.com/u/Folly)\ **Post date:** [April 21, 2011, 2:27pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/18 "2011-04-21T14:27:37Z")
I got one from Chase, but couldn’t take advantage of it because it’s not my primary residence. ☹ ---
**Author:** ![Tastes\_of\_Chocolate](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tastes_of_chocolate/32/3232_2.png) [@Tastes\_of\_Chocolate](https://boards.straightdope.com/u/Tastes_of_Chocolate)\ **Post date:** [April 21, 2011, 4:49pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/19 "2011-04-21T16:49:14Z")
We did this with Wells Fargo, about a year ago. We were offered a rate that was a little over what I could get a new mortgage at, but without closing costs. When we ran the numbers, it made more sense to take the slightly higher interest rate, with no closing costs. The big book of paperwork was mailed to us. We went into a local bank office, asked to use the services of one of their notary publics (free because we are customers), sat down and signed everything, and mailed it back. Took less than an hour of our time. Of course Wells Fargo turned around and sold our mortgage to Fanny May. That sort of annoyed us, since we’d always kind of liked that the fact that Wells Fargo hadn’t sold our previous mortgages. ---
**Author:** ![Mahaloth](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mahaloth/32/1079_2.png) [@Mahaloth](https://boards.straightdope.com/u/Mahaloth)\ **Post date:** [April 21, 2011, 6:59pm UTC](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127/20 "2011-04-21T18:59:21Z")
Called them today and worked it out. **I will finish paying of my mortgage in 15.5 years now instead of 19.** Very happy! [Next page](https://boards.straightdope.com/t/re-finance-my-mortgate-with-no-closing-fees-scam/579127.md?page=2)