Well-Healed Borrowers May Want to RUN for the Ultimate Refi

There have been many news stories reporting on how the CFPB’s new “ability to pay” mortgage rules, now in effect, will make it harder for regular hard-working Americans to get home loans. Many of the stories make the new rules sound just terrible, but really, the rules just make it more likely that loans go only to people who will be able to pay off their homes and not go into foreclosure.  Banks must now consider a consumer's financial health, including income, existing debt obligations and credit history, when making a loan. Makes sense to me, though I’d image some low income borrowers will not be able to get loans now. No doubt too, there will be fewer loans to make, if the borrowers need to be more stable financially. Nevertheless, there are mortgage brokers out there that just need something to do, not to mention mortgage lenders that need to lend. There is no doubt that people with excellent credit are now in hot demand by lenders. We are finding out about this in our household first hand and it is fascinating.

We currently have a 3.75% 15 year fixed rate mortgage that I swore would be our last. Financing bogus closing fees, yuck! Yet we are like junkies. We can’t seem to stop refinancing.  This winter we remodeled a bathroom and now want to fix up an adjoining room. I stopped by our local credit union and get a home equity line of credit to close a cash gap and avoid giving up our wonderful 3.75% mortgage. There would be no fees of any kind, not even an appraisal.  I filled out the paperwork for a $25,000 loan, they pulled our credit on the spot, and then the firestorm began.
The next day we were literally being stalked by a lender who made us a home loan three years ago. We ignored the calls to our home phone and both our cell phones.  Next our own lender sent us a fed ex package offering the same rate we had now on a higher dollar loan, but with $2,000 off our closing costs.  A lady called offering us a loan and saying she was from the federal government? Suddenly other lenders are also calling our phones in search of our next home loan. Could all of these lenders have learned that we were getting a home loan at the credit union? I can’t attribute all of this attention to anything else.  We have never felt so popular. 

Finally the stalking lender caught us live and the deal it is offering is hard to believe. No closing costs of any kind, other than one $450 appraisal. Plus, the rate will not be any higher than our current one. I will keep you posted but it seems as though things are better than ever for the best borrowers. Once again, there are unintended consequences of furthering the divide between the haves and the have nots.