Question by Silent Kninja: Why would a bank want to refinance my mortgage?
A few years ago, I had a mortgage with Bank A. The rates went way down so I refinanced with Bank B at a lower rate AND a shorter term (went from 30 year to 15 year.) Why would Bank B want to offer me something like that? What is in it for them? Please advise. Thank you!
Answer by Jay
What in it for B? They got your business. They collect your payments and get to skim off some of that interest as profits.
Simple as that.
Keep in mind that lower interest rates do not mean lower profits for lenders. Whether the interest rate is 3% or 8% or 20%, they pretty much get to skim off the same dollar amount in profits.
What do you think? Answer below!