Relationship mortgage discounts for moving a million assets

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Topic Author
softwaregeek
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Joined: Wed May 08, 2019 8:59 pm

Re: Relationship mortgage discounts for moving a million assets

Post by softwaregeek »

gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
I believe so. I called around to see if my existing 2.75 30yr could be refinanced downwards to 2.5. I was ready to pay some points to get there since I wont move soon and I am possibly reaching the point of diminishing returns, plus the inflation rate is increasing, so it didnt' seem like much of a risk.

Tried Chase, BofA and WF.

Chase told me 2.625 with an eighth point and I pay closing costs. Not really worth it, paying essentially $6-7k between fees and .125 point to save $75 a month pretax, and probably $50 post tax..

BofA offered to modify my existing loan down to 2.5% for a $950 fee since it has been at least a year since I got the loan. Weirdly, it has actually been a year since the application date and not since the signing, but I am not quibbling. I took it, even without hearing back from WF (who still gives me the creeps from their prior behavior, which was well documented in the newspapers). This is about a 6.5 month payback pretax and under a year post-tax (although I didn't bother to formally calculate).

I started this journey two years ago, with 3.875% at a $4790 mortgage payment.I then went to 3.25%, at about $4400, and then to 2.75%, at $4070. Now going to 2.5% at $3922. I've saved almost 900 a month pretax, and locked it in for the next 30 years. Along the way, I also generated about $7k in cash and bonuses. I estimate the total benefit in net present value terms at $50-70k. Which is frankly, astonishing given that I had to learn about all this stuff by trial and error (and lots of effort).

I hope you guys can benefit as much as I did.

FYI, I would take the 7 year IO. that's just bonkers and even pretax is below the 2.4% implied 5-year inflation rate as measured by the St. Louis Fed.
Tingting1013
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Re: Relationship mortgage discounts for moving a million assets

Post by Tingting1013 »

gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
Schwab / Quicken may be able to beat that with $1M in assets.
mervinj7
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Re: Relationship mortgage discounts for moving a million assets

Post by mervinj7 »

softwaregeek wrote: Mon May 10, 2021 9:32 pm
BofA offered to modify my existing loan down to 2.5% for a $950 fee since it has been at least a year since I got the loan. Weirdly, it has actually been a year since the application date and not since the signing, but I am not quibbling. I took it, even without hearing back from WF (who still gives me the creeps from their prior behavior, which was well documented in the newspapers). This is about a 6.5 month payback pretax and under a year post-tax (although I didn't bother to formally calculate).
Did you have to contact someone to get the existing loan lowered? My old BofA lender left the company.
Topic Author
softwaregeek
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Re: Relationship mortgage discounts for moving a million assets

Post by softwaregeek »

mervinj7 wrote: Mon May 10, 2021 10:38 pm
softwaregeek wrote: Mon May 10, 2021 9:32 pm
BofA offered to modify my existing loan down to 2.5% for a $950 fee since it has been at least a year since I got the loan. Weirdly, it has actually been a year since the application date and not since the signing, but I am not quibbling. I took it, even without hearing back from WF (who still gives me the creeps from their prior behavior, which was well documented in the newspapers). This is about a 6.5 month payback pretax and under a year post-tax (although I didn't bother to formally calculate).
Did you have to contact someone to get the existing loan lowered? My old BofA lender left the company.
I emailed my old lender, had a 5 minute call and that was it. Don’t know anything beyond that,
Startled Cat
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Re: Relationship mortgage discounts for moving a million assets

Post by Startled Cat »

gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
Is this for a purchase or refi? Also curious about the LTV.
BusterMcTaco
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Re: Relationship mortgage discounts for moving a million assets

Post by BusterMcTaco »

Once the mortgage is closed, they can't roll back a relationship discount, right? The rate is locked by law?

I ask because WF messed up my transfer from Vanguard, but we're already closed. I'd rather leave the money in Vanguard so planning to just not move it.

If the pressure me, I just want to know whether I'm obligated to cooperate.
mervinj7
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Re: Relationship mortgage discounts for moving a million assets

Post by mervinj7 »

softwaregeek wrote: Mon May 10, 2021 11:05 pm
mervinj7 wrote: Mon May 10, 2021 10:38 pm
softwaregeek wrote: Mon May 10, 2021 9:32 pm
BofA offered to modify my existing loan down to 2.5% for a $950 fee since it has been at least a year since I got the loan. Weirdly, it has actually been a year since the application date and not since the signing, but I am not quibbling. I took it, even without hearing back from WF (who still gives me the creeps from their prior behavior, which was well documented in the newspapers). This is about a 6.5 month payback pretax and under a year post-tax (although I didn't bother to formally calculate).
Did you have to contact someone to get the existing loan lowered? My old BofA lender left the company.
I emailed my old lender, had a 5 minute call and that was it. Don’t know anything beyond that,
Last edited by mervinj7 on Wed May 26, 2021 10:17 pm, edited 1 time in total.
mystiq
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Re: Relationship mortgage discounts for moving a million assets

Post by mystiq »

Hi,

I took the fresh loan from US bank for 10/1 ARM at 2.5% and considering the talk of inflation, I want to lock the rates for 30 years. Will Bofa be able to give this rate ? I am looking for around 840K. Thanks
Topic Author
softwaregeek
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Re: Relationship mortgage discounts for moving a million assets

Post by softwaregeek »

Update: WF Sent back a rate at 2.5% with lender credit covering closing costs.

I have asked for a new quote with a buy down to 2.375, since I wonder when we hit bottom.

Debating whether it makes sense to pay $950 to avoid WF.
thrownjunk
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Re: Relationship mortgage discounts for moving a million assets

Post by thrownjunk »

Just another data point (for a refi loan started in late Feb, but just closed last month)

Chase/JP Morgan

2.375; 750K; 30-year fixed conforming refi (high cost area); 70% LTV; no points; 2500 for opening private client account; brought 500K in VTSAX over.
Topic Author
softwaregeek
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Re: Relationship mortgage discounts for moving a million assets

Post by softwaregeek »

mystiq wrote: Tue May 11, 2021 4:20 pm Hi,

I took the fresh loan from US bank for 10/1 ARM at 2.5% and considering the talk of inflation, I want to lock the rates for 30 years. Will Bofa be able to give this rate ? I am looking for around 840K. Thanks
Only way to know is to call, develop a rapport with the mortgage person and toss out various scenarios. I find phone is best.
BusterMcTaco
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Re: Relationship mortgage discounts for moving a million assets

Post by BusterMcTaco »

BusterMcTaco wrote: Tue May 11, 2021 3:39 pm Once the mortgage is closed, they can't roll back a relationship discount, right? The rate is locked by law?

I ask because WF messed up my transfer from Vanguard, but we're already closed. I'd rather leave the money in Vanguard so planning to just not move it.

If the pressure me, I just want to know whether I'm obligated to cooperate.
Bump. Anyone know?
User avatar
8foot7
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Re: Relationship mortgage discounts for moving a million assets

Post by 8foot7 »

BusterMcTaco wrote: Wed May 12, 2021 11:16 am
BusterMcTaco wrote: Tue May 11, 2021 3:39 pm Once the mortgage is closed, they can't roll back a relationship discount, right? The rate is locked by law?

I ask because WF messed up my transfer from Vanguard, but we're already closed. I'd rather leave the money in Vanguard so planning to just not move it.

If the pressure me, I just want to know whether I'm obligated to cooperate.
Bump. Anyone know?
You'd have to read your note to be sure, which would spell out all of the terms under which they could adjust the rate. But in practice this does not happen.
BusterMcTaco
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Re: Relationship mortgage discounts for moving a million assets

Post by BusterMcTaco »

Thanks, didn't think to just look at that. The Note seems pretty straightforward, no mention even of the relationship bonus, just the final rate.
grkmec
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Re: Relationship mortgage discounts for moving a million assets

Post by grkmec »

grkmec wrote: Sat Mar 27, 2021 6:36 am
stipeman wrote: Thu Mar 11, 2021 5:48 pm Looks like with $1M at Schwab you can still get 1.625% on 5/1 Jumbo with 0 pts.

https://www.schwab.com/public/schwab/ba ... gage_rates

Seems almost too good to be true given the move in rates recently.
Thank you, thank you !!!! Schwab rates are awesome. Since you posted this, I have locked two mortgages with Schwab/Quicken:

Primary -$1.2mm at 2.25% 7yr ARM or 2% paying 1 point
Investment Property refi cash out - $1.0mm 2.375% 7yr ARM or 2.125% paying 1 point.

I have private banking relationships with Citibank, BAMl, JPM, Wells and HSBC and nobody could touch the Schwab rates.
Update to my situation - so I went back and forth between Schwab and BAML and finally closed my refi this past Monday with Schwab. Ending up with a 7yr IO ARM at 2.0% paying 0.296 points at closing. I am happy with that.

Separately, my cash out refi on my investment property failed due to a bad appraisal. So I will try that again in July when the old appraisal goes stale.

I have also lined up a HELOC via Third Federal at Prime minus 1.01% which I am closing on next week.
Baldrekr
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Location: Seattle, WA

Re: Relationship mortgage discounts for moving a million assets

Post by Baldrekr »

Yesterday you could get a 1.625% jumbo 7/1 from Schwab (2.375% - 0.75% max relationship discount) although today the base rate went back 0.125% up to 2.5%.

Given the previous messages in this thread, I called up Bank of America but they aren't even remotely competitive and said that even after max relationship discounts, they couldn't even meet my existing 2.125% 7/1 without charging me points. I don't know how people are getting 1.75% or anywhere close to it from BofA with 0 points.
grkmec
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Re: Relationship mortgage discounts for moving a million assets

Post by grkmec »

Baldrekr wrote: Thu May 13, 2021 11:39 am Yesterday you could get a 1.625% jumbo 7/1 from Schwab (2.375% - 0.75% max relationship discount) although today the base rate went back 0.125% up to 2.5%.

Given the previous messages in this thread, I called up Bank of America but they aren't even remotely competitive and said that even after max relationship discounts, they couldn't even meet my existing 2.125% 7/1 without charging me points. I don't know how people are getting 1.75% or anywhere close to it from BofA with 0 points.
So on Bank of America - you can stack incentives:

New money discounts (reduction to interest rate)
250k = 0.125 rate discount
500k = 0.250 rate discount
3mm = 0.375 rate discount

Existing relationship discounts
250k – 0.5pts on points
1mm – 0.5pts and 1/8 rate discount
Max rate reduction = 3/8 (max stacking)

So with 1mm existing relationship with BAML and bringing in $500k new money, one can get 3/8 off rate and 0.5 closing credit.
drekin
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Re: Relationship mortgage discounts for moving a million assets

Post by drekin »

So is the optimum to have $1M with BoA and $500k available to transfer in?
Daapower
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Re: Relationship mortgage discounts for moving a million assets

Post by Daapower »

the schwab rate looks pretty good with 5mm in qualifying assets, 75bp off. 7/1 amortizing is 2% no points

just about all of the private banks will match any quote you have to keep the relationship. The schwab site makes it easy to go to you preferred private bank to just say match this
grkmec
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Re: Relationship mortgage discounts for moving a million assets

Post by grkmec »

drekin wrote: Sat May 15, 2021 12:39 pm So is the optimum to have $1M with BoA and $500k available to transfer in?
Looks like it
grkmec
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Re: Relationship mortgage discounts for moving a million assets

Post by grkmec »

Daapower wrote: Sat May 15, 2021 8:21 pm the schwab rate looks pretty good with 5mm in qualifying assets, 75bp off. 7/1 amortizing is 2% no points

just about all of the private banks will match any quote you have to keep the relationship. The schwab site makes it easy to go to you preferred private bank to just say match this
I think this used to be the case, but not sure anymore. I have found the large banks to be way more dysfunctional post COVID. My banker at Citi begged me to apply and he promised to match the Schwab 7yr ARM with their 10yr ARM product. It sounded too good to be true, but I said what the hell, might as well try. A mortgage app, a credit pull, and a week later, he can back with tail between his legs saying sorry, I thought the $1mm in new assets would get us over the line but management doesn’t care.

Then at Bank of America, my banker has been a rock star matching mortgages, told me to take the Schwab deal. He didn’t have confidence in his own banks ability to beat Schwab, and he cited multiple levels of management turnover. He mumbled about how he might be gone himself in 2022 as the bank seems to changing compensation structures, and guys are leaving.
Baldrekr
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Location: Seattle, WA

Re: Relationship mortgage discounts for moving a million assets

Post by Baldrekr »

Agree with the above, when I got my Chase 2.125% earlier this year, I told them Schwab’s website is offering 2.0% (for the same amount of assets brought over) and they wouldn’t match it (without proof of an actual offer from Schwab and then escalating to upper levels, and he sounded doubtful about them approving). Other banks like Wells Fargo just straight out said they could not match even my Chase offer and weren’t interested in negotiating. I would have just gone with Schwab back then but they didn’t get back to me for over a week and I wanted to lock in a low rate.
Daapower
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Re: Relationship mortgage discounts for moving a million assets

Post by Daapower »

I started my mortgage process with JP last week but will send over schwab rates to see if they can match. JP has a mechanism where you can deduct interest beyond the 750k limit
Daapower
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Re: Relationship mortgage discounts for moving a million assets

Post by Daapower »

problem with schwab is their rates are only good for lower LTV. JPM and other banks will go 85 LTV on 3mm+

$1.5million- 2million= 75%

$2,000,001- 3million= 65%

$3,000,001- 4million= 55%
mervinj7
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Re: Relationship mortgage discounts for moving a million assets

Post by mervinj7 »

Daapower wrote: Mon May 17, 2021 7:35 am I started my mortgage process with JP last week but will send over schwab rates to see if they can match. JP has a mechanism where you can deduct interest beyond the 750k limit
Isn't the $750k limit part of current tax law? What kind of mechanism can be used to go over that? Or do you mean using the investment interest expense trick to go over that limit?
gmang
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Re: Relationship mortgage discounts for moving a million assets

Post by gmang »

gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
Wow, so I sent the closing estimate to my Schwab/Quicken mortgage rep and they matched the post-relationship ML rate with even better closing costs to get to 1.75% 7y ARM IO with no points. like $4,500 to close. Apparently Schwab buys the mortgage from them directly, so they can do whatever Schwab signs off on on a case by case basis. The nice thing is that I do not need to move any assets and the closing estimate shows the full pricing. I would definitely see if Schwab can be aggressive if needed.
Daapower
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Re: Relationship mortgage discounts for moving a million assets

Post by Daapower »

That's really good. I don't have a BAML relationship. Do I contact BOFA or Merrill lynch to start this?

Also is that on a conforming or jumbo? Conforming rates posted on Schwab are much lower
Tingting1013
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Re: Relationship mortgage discounts for moving a million assets

Post by Tingting1013 »

Tingting1013 wrote: Wed Apr 14, 2021 7:46 pm
Tingting1013 wrote: Wed Mar 31, 2021 10:39 pm
Tingting1013 wrote: Sat Mar 27, 2021 1:59 pm
grkmec wrote: Sat Mar 27, 2021 6:36 am
stipeman wrote: Thu Mar 11, 2021 5:48 pm Looks like with $1M at Schwab you can still get 1.625% on 5/1 Jumbo with 0 pts.

https://www.schwab.com/public/schwab/ba ... gage_rates

Seems almost too good to be true given the move in rates recently.
Thank you, thank you !!!! Schwab rates are awesome. Since you posted this, I have locked two mortgages with Schwab/Quicken:

Primary -$1.2mm at 2.25% 7yr ARM or 2% paying 1 point
Investment Property refi cash out - $1.0mm 2.375% 7yr ARM or 2.125% paying 1 point.

I have private banking relationships with Citibank, BAMl, JPM, Wells and HSBC and nobody could touch the Schwab rates.
Incredible. I just called Schwab/Quicken and they just confirmed that I can refi to:

1.875% 5/1 interest only ARM with $4k closing cost, or
2.0% with zero closing cost

With $1M in assets transferred to Schwab.

Thank you stipeman and grkmec! You just saved me $6k/yr in interest!
Even more incredible - I was able to get BoA to beat Schwab’s offer!

Terms from BoA:

5/6 Interest Only ARM
1.75%!!!!
$4k of closing cost (same as Schwab/Quicken)
Only $500k of investments required!
The bidding continues...

Latest offer from Schwab
1.6% and no fees, or
1.5% with $4k fees
Finally scheduled closing on Thursday with Schwab

5/6 IO ARM
1.5% no points
$1.2M loan (66% LTV)
$3,700 closing costs

$1M in assets with Schwab
Count of Notre Dame
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Re: Relationship mortgage discounts for moving a million assets

Post by Count of Notre Dame »

Would Schwab match the margin rates at Interactive Brokers?
gmang
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Re: Relationship mortgage discounts for moving a million assets

Post by gmang »

Count of Notre Dame wrote: Thu May 20, 2021 6:34 pm Would Schwab match the margin rates at Interactive Brokers?
It sounds like everything is negotiable. I am in the process of closing with Quicken, and my local Schwab rep reconnected with me today. It sounds like they can negotiate a much higher waiver of wire transfer fees and can offer a much better margin schedule if they you are primarily playing at IB.
modernist
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Re: Relationship mortgage discounts for moving a million assets

Post by modernist »

Some initial quotes from BofA

5/6 ARM with 10yr IO @ 1.75% after 500K transfer
7/6 ARM with 10yr IO @ 1.875% after 500K transfer
7/6 ARM (but not IO) @ 1.75% after 500K transfer
10/6 ARM IO @ 2.25% after 500K transfer

Current mortgage 10/1 ARM @ 2.25%.

Bay Area, jumbo approx 65% LTV
Lucky2Invest
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Re: Relationship mortgage discounts for moving a million assets

Post by Lucky2Invest »

Tingting1013 wrote: Tue May 18, 2021 2:08 pm
Tingting1013 wrote: Wed Apr 14, 2021 7:46 pm
Tingting1013 wrote: Wed Mar 31, 2021 10:39 pm
Tingting1013 wrote: Sat Mar 27, 2021 1:59 pm
grkmec wrote: Sat Mar 27, 2021 6:36 am

Thank you, thank you !!!! Schwab rates are awesome. Since you posted this, I have locked two mortgages with Schwab/Quicken:

Primary -$1.2mm at 2.25% 7yr ARM or 2% paying 1 point
Investment Property refi cash out - $1.0mm 2.375% 7yr ARM or 2.125% paying 1 point.

I have private banking relationships with Citibank, BAMl, JPM, Wells and HSBC and nobody could touch the Schwab rates.
Incredible. I just called Schwab/Quicken and they just confirmed that I can refi to:

1.875% 5/1 interest only ARM with $4k closing cost, or
2.0% with zero closing cost

With $1M in assets transferred to Schwab.

Thank you stipeman and grkmec! You just saved me $6k/yr in interest!
Even more incredible - I was able to get BoA to beat Schwab’s offer!

Terms from BoA:

5/6 Interest Only ARM
1.75%!!!!
$4k of closing cost (same as Schwab/Quicken)
Only $500k of investments required!
The bidding continues...

Latest offer from Schwab
1.6% and no fees, or
1.5% with $4k fees
Finally scheduled closing on Thursday with Schwab

5/6 IO ARM
1.5% no points
$1.2M loan (66% LTV)
$3,700 closing costs

$1M in assets with Schwab
Very interesting, I can't get under 2.5% on a 10yr IO with more assets at Schwab. I don't have another bank for them to match though. Any recommendations on how I can get another rate for them to match?
User avatar
ray.james
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Re: Relationship mortgage discounts for moving a million assets

Post by ray.james »

modernist wrote: Mon May 24, 2021 4:05 pm Some initial quotes from BofA

5/6 ARM with 10yr IO @ 1.75% after 500K transfer
7/6 ARM with 10yr IO @ 1.875% after 500K transfer
7/6 ARM (but not IO) @ 1.75% after 500K transfer
10/6 ARM IO @ 2.25% after 500K transfer

Current mortgage 10/1 ARM @ 2.25%.

Bay Area, jumbo approx 65% LTV
excellent pricing! Another choice I came across is Schwab at 2% 5/6m arm with 250K transfer.
When in doubt, http://www.bogleheads.org/forum/viewtopic.php?f=1&t=79939
Count of Notre Dame
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Re: Relationship mortgage discounts for moving a million assets

Post by Count of Notre Dame »

grkmec wrote: Wed May 12, 2021 10:37 pm
grkmec wrote: Sat Mar 27, 2021 6:36 am
stipeman wrote: Thu Mar 11, 2021 5:48 pm Looks like with $1M at Schwab you can still get 1.625% on 5/1 Jumbo with 0 pts.

https://www.schwab.com/public/schwab/ba ... gage_rates

Seems almost too good to be true given the move in rates recently.
Thank you, thank you !!!! Schwab rates are awesome. Since you posted this, I have locked two mortgages with Schwab/Quicken:

Primary -$1.2mm at 2.25% 7yr ARM or 2% paying 1 point
Investment Property refi cash out - $1.0mm 2.375% 7yr ARM or 2.125% paying 1 point.

I have private banking relationships with Citibank, BAMl, JPM, Wells and HSBC and nobody could touch the Schwab rates.
Update to my situation - so I went back and forth between Schwab and BAML and finally closed my refi this past Monday with Schwab. Ending up with a 7yr IO ARM at 2.0% paying 0.296 points at closing. I am happy with that.

Separately, my cash out refi on my investment property failed due to a bad appraisal. So I will try that again in July when the old appraisal goes stale.

I have also lined up a HELOC via Third Federal at Prime minus 1.01% which I am closing on next week.
Interestingly I went to apply for a HELOC with Third Federal and they told me they don't allow HELOC's on properties held in trusts in California. Kind of weird rule since everyone I know has a living trust for their kids.
mervinj7
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Re: Relationship mortgage discounts for moving a million assets

Post by mervinj7 »

Count of Notre Dame wrote: Mon May 24, 2021 6:14 pm Interestingly I went to apply for a HELOC with Third Federal and they told me they don't allow HELOC's on properties held in trusts in California. Kind of weird rule since everyone I know has a living trust for their kids.
I agree. Very strange rule. I ended up opening my HELOC at my credit union instead. Rate is just Prime but at least they don't have any issues with the trust.
investor231i
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Re: Relationship mortgage discounts for moving a million assets

Post by investor231i »

softwaregeek wrote: Mon May 10, 2021 9:32 pm
gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
I believe so. I called around to see if my existing 2.75 30yr could be refinanced downwards to 2.5. I was ready to pay some points to get there since I wont move soon and I am possibly reaching the point of diminishing returns, plus the inflation rate is increasing, so it didnt' seem like much of a risk.

Tried Chase, BofA and WF.

Chase told me 2.625 with an eighth point and I pay closing costs. Not really worth it, paying essentially $6-7k between fees and .125 point to save $75 a month pretax, and probably $50 post tax..

BofA offered to modify my existing loan down to 2.5% for a $950 fee since it has been at least a year since I got the loan. Weirdly, it has actually been a year since the application date and not since the signing, but I am not quibbling. I took it, even without hearing back from WF (who still gives me the creeps from their prior behavior, which was well documented in the newspapers). This is about a 6.5 month payback pretax and under a year post-tax (although I didn't bother to formally calculate).

I started this journey two years ago, with 3.875% at a $4790 mortgage payment.I then went to 3.25%, at about $4400, and then to 2.75%, at $4070. Now going to 2.5% at $3922. I've saved almost 900 a month pretax, and locked it in for the next 30 years. Along the way, I also generated about $7k in cash and bonuses. I estimate the total benefit in net present value terms at $50-70k. Which is frankly, astonishing given that I had to learn about all this stuff by trial and error (and lots of effort).

I hope you guys can benefit as much as I did.

FYI, I would take the 7 year IO. that's just bonkers and even pretax is below the 2.4% implied 5-year inflation rate as measured by the St. Louis Fed.

When you took the new loan with the previous lender, did it go through the normal process: e.g., credit check, appraisal, underwriting, closing etc. and would last 2-3 months. Or any steps would be skipped. Trying to understand this as this is just a new loan with the old lender. Or the lender is giving an advantage that the previous loan is with them etc. Thanks.
Topic Author
softwaregeek
Posts: 634
Joined: Wed May 08, 2019 8:59 pm

Re: Relationship mortgage discounts for moving a million assets

Post by softwaregeek »

investor231i wrote: Wed May 26, 2021 3:23 pm
softwaregeek wrote: Mon May 10, 2021 9:32 pm
gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
I believe so. I called around to see if my existing 2.75 30yr could be refinanced downwards to 2.5. I was ready to pay some points to get there since I wont move soon and I am possibly reaching the point of diminishing returns, plus the inflation rate is increasing, so it didnt' seem like much of a risk.

Tried Chase, BofA and WF.

Chase told me 2.625 with an eighth point and I pay closing costs. Not really worth it, paying essentially $6-7k between fees and .125 point to save $75 a month pretax, and probably $50 post tax..

BofA offered to modify my existing loan down to 2.5% for a $950 fee since it has been at least a year since I got the loan. Weirdly, it has actually been a year since the application date and not since the signing, but I am not quibbling. I took it, even without hearing back from WF (who still gives me the creeps from their prior behavior, which was well documented in the newspapers). This is about a 6.5 month payback pretax and under a year post-tax (although I didn't bother to formally calculate).

I started this journey two years ago, with 3.875% at a $4790 mortgage payment.I then went to 3.25%, at about $4400, and then to 2.75%, at $4070. Now going to 2.5% at $3922. I've saved almost 900 a month pretax, and locked it in for the next 30 years. Along the way, I also generated about $7k in cash and bonuses. I estimate the total benefit in net present value terms at $50-70k. Which is frankly, astonishing given that I had to learn about all this stuff by trial and error (and lots of effort).

I hope you guys can benefit as much as I did.

FYI, I would take the 7 year IO. that's just bonkers and even pretax is below the 2.4% implied 5-year inflation rate as measured by the St. Louis Fed.

When you took the new loan with the previous lender, did it go through the normal process: e.g., credit check, appraisal, underwriting, closing etc. and would last 2-3 months. Or any steps would be skipped. Trying to understand this as this is just a new loan with the old lender. Or the lender is giving an advantage that the previous loan is with them etc. Thanks.
Modification, not new loan. They fedexed me a form to sign, I added my 950 check, they fedexed me back another form to return and a week later the interest rate on my existing loan went down in my online account. Literally the majority of the work was two trips to fedex to drop off the docs.
mervinj7
Posts: 1840
Joined: Thu Mar 27, 2014 3:10 pm

Re: Relationship mortgage discounts for moving a million assets

Post by mervinj7 »

softwaregeek wrote: Wed May 26, 2021 9:28 pm Modification, not new loan. They fedexed me a form to sign, I added my 950 check, they fedexed me back another form to return and a week later the interest rate on my existing loan went down in my online account. Literally the majority of the work was two trips to fedex to drop off the docs.
Would you mind PM'ing your contact? Thanks.
investor231i
Posts: 59
Joined: Mon Dec 30, 2019 8:56 pm

Re: Relationship mortgage discounts for moving a million assets

Post by investor231i »

mervinj7 wrote: Wed May 26, 2021 10:15 pm
softwaregeek wrote: Wed May 26, 2021 9:28 pm Modification, not new loan. They fedexed me a form to sign, I added my 950 check, they fedexed me back another form to return and a week later the interest rate on my existing loan went down in my online account. Literally the majority of the work was two trips to fedex to drop off the docs.
Does someone know if this is happening for BoA only. Or for other banks as well. Also, is this happening only for 30 year fixed. Or for ARM's as well. Also, want to understand is there a million dollar asset requirement in the bank as per the subject of this thread.
Count of Notre Dame
Posts: 312
Joined: Fri Oct 11, 2013 1:08 pm

Re: Relationship mortgage discounts for moving a million assets

Post by Count of Notre Dame »

investor231i wrote: Wed May 26, 2021 11:48 pm
mervinj7 wrote: Wed May 26, 2021 10:15 pm
softwaregeek wrote: Wed May 26, 2021 9:28 pm Modification, not new loan. They fedexed me a form to sign, I added my 950 check, they fedexed me back another form to return and a week later the interest rate on my existing loan went down in my online account. Literally the majority of the work was two trips to fedex to drop off the docs.
Does someone know if this is happening for BoA only. Or for other banks as well. Also, is this happening only for 30 year fixed. Or for ARM's as well. Also, want to understand is there a million dollar asset requirement in the bank as per the subject of this thread.
Loan modifications are easy, I was sent a docusign from First Republic after the inital application went through and that was it.
Count of Notre Dame
Posts: 312
Joined: Fri Oct 11, 2013 1:08 pm

Re: Relationship mortgage discounts for moving a million assets

Post by Count of Notre Dame »

mervinj7 wrote: Wed May 26, 2021 12:26 pm
Count of Notre Dame wrote: Mon May 24, 2021 6:14 pm Interestingly I went to apply for a HELOC with Third Federal and they told me they don't allow HELOC's on properties held in trusts in California. Kind of weird rule since everyone I know has a living trust for their kids.
I agree. Very strange rule. I ended up opening my HELOC at my credit union instead. Rate is just Prime but at least they don't have any issues with the trust.
Would you mind referring your credit union? A lot of the ones I have searched for have a current teaser rate of 2.99%, but that is just for the first year.
mervinj7
Posts: 1840
Joined: Thu Mar 27, 2014 3:10 pm

Re: Relationship mortgage discounts for moving a million assets

Post by mervinj7 »

Count of Notre Dame wrote: Thu May 27, 2021 5:02 pm
mervinj7 wrote: Wed May 26, 2021 12:26 pm
Count of Notre Dame wrote: Mon May 24, 2021 6:14 pm Interestingly I went to apply for a HELOC with Third Federal and they told me they don't allow HELOC's on properties held in trusts in California. Kind of weird rule since everyone I know has a living trust for their kids.
I agree. Very strange rule. I ended up opening my HELOC at my credit union instead. Rate is just Prime but at least they don't have any issues with the trust.
Would you mind referring your credit union? A lot of the ones I have searched for have a current teaser rate of 2.99%, but that is just for the first year.
SFFireCU

https://sffirecu.org/home-equity
vieques
Posts: 44
Joined: Sun Mar 29, 2015 9:54 pm

Re: Relationship mortgage discounts for moving a million assets

Post by vieques »

Another data point. I see multiple banks (Wells Fargo, Bank of America, etc.) offering 2.5% with relationship discounts on jumbo 30-year fixed mortgage loans in the Bay Area. In fact, I heard that it is possible to go under 2.5% with Bank of America if you work on a shortlist of companies (Apple, Google, etc.), have a Bank of America created before you apply for a loan, and then move $3M in assets to them.
rajeshlh
Posts: 4
Joined: Wed Aug 05, 2020 10:31 am

Re: Relationship mortgage discounts for moving a million assets

Post by rajeshlh »

gmang wrote: Mon May 10, 2021 5:15 pm Is BofA getting aggressive? My BofA rep came from out of the blue with a quote for a 2% coupon / 2.4% APR 7y ARM IO refi. Moving $500k in new assets to BAML reduces it another 25 bps for 1.75%/2.15% APR all in. That seems pretty wild for an IO. The quote actually had no penalty for choosing an IO versus an amortizing mortgage. I am not even sure it is worth looking anywhere else? I can move pretty substantial assets. This is in the SF Bay Area.
Can you please share the contact info for the BofA rep? PM message not working
.
presto987
Posts: 398
Joined: Sun Aug 30, 2020 10:58 pm

Re: Relationship mortgage discounts for moving a million assets

Post by presto987 »

Re: BofA, I had success finding a loan officer through this link:
https://mortgage.bankofamerica.com/locator/

Try to find someone whose profile links to a lot of 5-star Zillow reviews and says things like "Chairman's Club". I don't know for sure, but I suspect those LOs are going to offer you more competitive rates than what you would get by walking into a branch. Certainly they will tend to give better service.
investor231i
Posts: 59
Joined: Mon Dec 30, 2019 8:56 pm

Re: Relationship mortgage discounts for moving a million assets

Post by investor231i »

presto987 wrote: Tue Jun 01, 2021 7:17 pm Re: BofA, I had success finding a loan officer through this link:
https://mortgage.bankofamerica.com/locator/

Try to find someone whose profile links to a lot of 5-star Zillow reviews and says things like "Chairman's Club". I don't know for sure, but I suspect those LOs are going to offer you more competitive rates than what you would get by walking into a branch. Certainly they will tend to give better service.

One more comment: seems that the short re-financing (no appraisal etc. and only signing a few documents) is only available on 30 year loans and not ARM's. I talked to couple of BoA representatives and both told me about this.
carne_asada
Posts: 32
Joined: Sat Aug 03, 2019 7:38 am

Re: Relationship mortgage discounts for moving a million assets

Post by carne_asada »

As a data point: I was able to close with Chase using a .5% discount for 1M ( I think they recently reduced this) as well as a competitive match to PNC. However it took near constant follow up with my loan officer for them to get the rate correct and it nearly delayed closing as they didn't have docs correct until very late the evening before. Make sure you stay on top of your LO!! - especially if you are using discounts and matches for a purchase.
antmn
Posts: 6
Joined: Tue Sep 03, 2019 1:45 pm

Re: Relationship mortgage discounts for moving a million assets

Post by antmn »

Baldrekr wrote: Sun May 16, 2021 4:25 pm Agree with the above, when I got my Chase 2.125% earlier this year, I told them Schwab’s website is offering 2.0% (for the same amount of assets brought over) and they wouldn’t match it (without proof of an actual offer from Schwab and then escalating to upper levels, and he sounded doubtful about them approving). Other banks like Wells Fargo just straight out said they could not match even my Chase offer and weren’t interested in negotiating. I would have just gone with Schwab back then but they didn’t get back to me for over a week and I wanted to lock in a low rate.
Hello - Just wondering what type of a mortgage these numbers are based on
ginsj
Posts: 1
Joined: Mon Jun 07, 2021 11:27 am

Re: Relationship mortgage discounts for moving a million assets

Post by ginsj »

I'm in sfbay and followed these instructions and got a very similar loan & discount - thank you triom6 for the instructions/steps, they were helpful in working with wf
triom6 wrote: Sat Apr 24, 2021 9:39 am I closed a few weeks back with WF on a purchase. Loan amount: 1.8M, 70% LTV
30 years fixed, 2.375% with a credit of .125 points, after $1M relationship discount. Socal.

WF tips:
- A Wells Fargo username helps with the loan documents so do the next step even if you are only considering
- Open your WellsTrade accounts yourself via their website (https://www.wellsfargo.com/investing/we ... rage/open/).
- If you can electronically sign for your WellsTrade account, great, it'll be set up quick.
- Instead, if they mail you package to sign and send back, call them (1-800-872-3377) and they can direct you to print out the sheet and you can fax/scan it back to them.
- Only AFTER they have processed your signature card are you able to initiate the funds transfer. You can do this on the WellsTrade site
- The ACATS transfer itself happens fairly quickly
- BUT the WellsTrades site won't show assets properly for a few more days
- WF Lending and WellsTrade don't talk to each other efficiently so it will take a while for WF Lending to verify you have assets in WellsTrade
- Keep statements, screenshots from your prior broker so you can supply those
- WF underwriting is a major PITA. I'm not sure I would go through it again on a purchase (if things need to close on time). For a refi, I would be more likely.
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