If it sounds too good to be true, it usually is.
December 6, 2012 9:25 AM Subscribe
FHA Streamline Refi. Is there a catch? It feels like there should be a catch.
posted by gnutron to Work & Money (14 answers total) 2 users marked this as a favorite
We live in the Bay Area. We are two years into a 30 year mortgage. Over the last few months, I have been getting a ton of unsolicited mail offering to refinance our mortgage. And they generally seemed to good to be true.
I am generally very skeptical of things like this. Thinking: someone offering something for nothing is usually not what it seems. If it sounds too good to be true, it probably is.
I finally gave in and called one of the brokers that has been mailing us. According to him, we can lower our interest rate by a full percentage point or more (from 4.5% to 3.5% or lower). There's no closing cost, no appraisal, no fees to us at all. The only thing that might come out of our pocket is the funds to replenish the impound account and that would get reimbursed by our old lender. There's no obvious trickery, like switching from a fixed rate to an ARM or anything like that.
So from my perspective, this seems too good to be true. We get a lower interest rate on our mortgage for essentially nothing. Is there a hidden catch here that I'm not aware of?