Background: I bought a new house before selling my old house, and therefore didn’t have much of a down payment to make on the new one. So the mortgage payment on the new house is large.
Now that I’ve been fortunate enough to sell my old house in this slow market, I have a large sum of money I can pay on the new mortgage. So I’ve been shopping around for a mortgage refinance. The first Good Faith Estimate I got is over $4,000 for a refinance.
Tonight I called Century 21 Mortgage, the company that holds my mortgage. When I inquired about refinancing the guy got some basic information and then told me he probably shouldn’t be telling me about this, but I should see about a “loan modification.” He said that will cost about $250 as opposed to thousands for a refinance. He offered to transfer me to another department that could handle that for me, and I of course agreed (couldn’t hurt to see what they have to say.) But unfortunately that department closes at 8:00 and I couldn’t talk to them today.
So that gave me a little time to research. A loan modification seems to be for people who are struggling to pay their mortgage, and the lender will modify the terms of the mortgage rather than head towards foreclosure.
Trouble is, in the 8 months I’ve had this mortgage, I’ve never made a late payment, in fact I usually pay more than the minimum. Plus I have a large sum of money to pay on the loan.
So what’s in it for them? There’s nothing about me that would be a risk, other than the large monthly payment I’m now paying. Am I really onto a secret program here or should I be extra-careful about tricks?