I have an interest rate at 6.725 for an 840k jumbo loan and I’m not happy with it. I found a local credit union that offers a rate of 5.6 but they don’t allow recasting of the loan. The loan estimate includes $900 of bank fees, with the rest being typical charges. When I asked them why they don’t allow recasting, especially when other banks charge only $250 for it, they mentioned it’s due to high workload and limited operational capacity. Is this true? Is the clerical work involved with recasting really that significant? I’m willing to pay the $900 bank fee if necessary.
Mind if I ask which CU?
Slate said:
Mind if I ask which CU?
It’s a credit union. Thanks for all the downvotes. The original post asked what a CU was. Now it’s been edited and makes me look silly.
Slate said:
Mind if I ask which CU?
It’s a credit union. Thanks for all the downvotes. The original post asked what a CU was. Now it’s been edited and makes me look silly.
Which CU is this anyway?
Why would you recast the loan?
No two banks are exactly the same and not all credit unions are created equal. Many of them use third-party mortgage companies they are just referring you to. In those cases, their mortgage rates are the same as the major banks. I’m a big fan of Wings Financial. Anyone can join for $5, they keep all loans in-house, and service their own loans. No BS and usually the best rates possible.
Most credit unions are still using 1985 technology.
Chen said:
Most credit unions are still using 1985 technology.
Most banks are as well.
I worked in the mortgage department at a credit union about 10 years ago. The system they had sucked at handling mortgages (because it was mainly meant for deposit accounts and simple auto loans) so most of the mortgage servicing was done on an Excel sheet. I’m sure recasting is in fact a heavy lift for some credit unions.
Depends on the servicing system they use. Some can be tougher to work with. Also, depending on their size it may be due to less than competent leadership in their mortgage servicing area. Sometimes in smaller CUs and banks, you have the managers who just claim things are too difficult to do and the organization is too small to have someone call them out on their BS excuses (personally I’ve had to dive into admin manuals of systems I wasn’t familiar with just to remove roadblocks for members set up by lazy managers).
It’s about ROI. Credit unions are using house money to fund that loan. The last thing they need is for money to be still tied up and making less off interest.
Dru said:
It’s about ROI. Credit unions are using house money to fund that loan. The last thing they need is for money to be still tied up and making less off interest.
The CU is not the holder. We’re discussing a new loan with a CU.