I guess the bottom line with refinancing is how much it will cost and how much money I can save by going through what seems like a mysterious, somewhat arduous process.
Initially, I decided to refinance a home equity loan and another loan on a rental property I had with my local bank defaulting to what I was most familiar with, relying on a local lender at our branch to walk me through the steps and options available to me. I was most concerned about the pending interest rate hikes and decided to make sure I avoided the inevitable higher payments on the variable rate home equity loan. I also desired a more favorable rate for my other loan on a rental unit. My local bank offered me a 30 year fixed rate loan on the home equity at about 4.65% and offered to refinance the other loan to a 15 year fixed rate at about 4.25%. In order to secure the loans and what seemed like decent rates I would be obliged to pay some rather hefty fees for both loans; the appraisal fees, especially for the rental property were glaringly high. We all know how easy it is to see how much our properties are worth online, so paying some institution hefty fees for this service is annoying to say the least. At the last moment I decided to do some research, get my head out of the sand and see what the heck was going on not only with the fees but with the interest rates online. To my consternation the rates quoted online where so much better than what my bank had offered me. They were hovering around 3.85 to 4.00%, much less than the rates I had recently been offered by my branch lender. The significant difference made me go ahead and make some inquiries with a few online lenders including the NBKC bank, apparently one of several institutions affiliated with Costco refinance services. Being an avid Costco shopper for more than two decades made my decision to go with NBKC bank the following morning so much easier. I received both an email and a call from Mike Morris the following morning.
Mike Morris was a perfect fit for me. He was very personable and not too pushy. The information he provided was more matter of fact and didn’t have what I feared would be too much of a salesman’s pitch. I appreciated his calm demeanor and his ability to talk about the facts and figures. All those reasons we tend to go with the local town bank, Mike provided online and in our numerous telephone conversations. He offered a loan option called a “cash out” loan that my branch lender never even proposed and I ended up locking in a rate of 3.875%. I ended up being able to borrow 80% of the appraised value of my primary home which allowed me to payoff the balance of both the home equity loan and the rental loan. I completely avoided having to pay the refinance fees on the rental unit-it wasn’t necessary with this cash-out option. Furthermore, the appraisal on the primary home ended up being about half the price of what my branch lender was going to charge me. And, of course, the ultimate savings will be made with the substantially lower 3.875% in the next twenty years.