I've been a long-time follower and occasional commenter. Have a mortgage question that you might help me out with.

I almost picked out a lender, but just found out that the bank gives itself the "ability to require repayment in full before the scheduled maturity date". They claim that this is standard practice. Do you know if that's true? I'm a little concerned that this makes my "fixed" rate an illusion: if rates go up sufficiently, they will call the loan and I'll have to refinance before I planned to, at a higher rate. Am I misunderstanding something? It's a fairly reputable bank (ING Direct).

Thanks in advance!

You did take a risk between your application and approval. The pricing for a short lock was much more favorable than a 30-day lock. That's why Fremont Bank was able to give you a lower rate. The broker I worked with before also wanted me to go that way — float until the loan is approved, then lock and close — but I opted for a confirmed lock with NMA. According to the post I linked from Mr. Mortgage blog, that floating strategy backfired for many people lately.

Sorry about the mishap to the other post. It was released prematurely. I think my loan will fund on Tuesday. I will confirm everything afterwards.

I had 10 years left on my 15-year 5.25% mortgage. The balance was $98K. I tried calling National Mortgage Alliance but couldn't get through to a live person. I finally left a message but no one returned my call. According to their web-site, the best no-cost rate for my situation was 4.875%. Presumably, this was due to my relatively low loan balance. When I entered $200K for the loan amount, I was offered the same 4.5% rate that you received.

So instead, I went with Fremont Bank (fremont.bank), a local bank servicing California, Nevada, and Oregon. They specialize in no-cost loans. Their 15 and 30 year rates are prominently displayed on the front page of their website. They've been quite competitive over the past 5-10 years, so their website is a good source of quick information about national mortgage rates.

At the end of April, Fremont Bank's 15-year no-cost rate was 4.625% (their 10-year rate was also 4.625%; their 30-year rate was 4.99%). However, there was a potential problem. There was no same day rate lock for new customers and I hadn't refinanced with them before. More so, I had to pay a $395 application fee. This fee would be refunded if and only if the loan funded. I was pretty confident the loan would fund, but I was taking a chance that the rate would remain low (this was the main reason I haven't used them before). I was told that 2-3 weeks were typically required for loan approval and rate lock.

I submitted my on-line application on Wednesday April 29. I received a confirmation call-back the following day (April 30) with a request for documentation (pay stubs, tax forms, bank accounts). I was ready with the documentation and faxed in everything that day. I received a loan packet in the mail on Saturday (May 2), and signed/faxed the necessary information that same day. On Thursday, May 7, eight days after submitting my application, I was informed that the loan was approved and was asked if I wanted to lock in the 4.625% rate. I said yes. I signed loan papers the following Monday (May 11) when a notary came to my house. Although she was a contractor, she was quite familiar with the process and was able to answer a lot of logistical questions. She even had the phone number to my local credit union memorized. I faxed in a subsequent document (request for tax returns) the following Saturday (May 16). The assessment of my house was invisible to me and there were no issues associated with my request to forgo an escrow account.

I received a refund check of my $395 application fee on Friday, May 22. The application fee won't hit my credit card until mid-June, so I actually come out about 50 cents ahead in interest.

I don't have on-line access to my previous mortgage institution so I have no easy way to determine if the loan balance has been paid. I stopped the automatic withdrawal that was scheduled for June 1. I sent an interim interest check to the new institution over a week ago but so far it has not cleared my checking account (which has me a little worried). Automatic deductions won't begin until July 1. Everything seems to be on track but I won't consider the matter closed until July 1.

Overall, the process went extremely well. I'd recommend Fremont Bank to anyone living in California, Nevada, or Oregon. They even contacted my home owners insurance company to have my annual insurance forms sent to them. They sent me a postage paid envelop for my interim interest payment. I had to do next to nothing.

One final note. In late April I called my previous institution to learn if they could match the Fremont Bank rate. I was quoted a no cost rate of 5.125% (a notch below my existing rate), and a no points rate of 4.625% with "only" $3K in fees. They asked me to fax them the quote from Fremont Bank, which I did. However, no one called me back. Two weeks later I got a call from them that essentially said, "please don't leave us." I was a little irked by their call since they didn't bother to call me back, even to say that they couldn't match the new rate.