Hi GNG, I'm confused as hell.... Currently, we have a mortgage with TCF Bank with a fixed rate of 9.2 percent which I think is really lousy. Why? Anyone with any mortgage rate higher than 7.5% in the last 10 years ONLY has a rate that high because they had some kind of lousy credit, bad employment history, or something else (or some combination.) Why was 9.2% the best you qualified for... just 3 years back, in 2005? Anyhow, we're trying to get a rate adjustment on our house for somewhere between 6.5 to the low 7's. The bank is really giving us the run around. Back in September we had originally wanted to refinance to a lower fixed rate & lower mortgage term of 20 years (we currently are at 27 years left on the life of it) but we discovered that our original loan officer passed us off to a different woman without telling us and then this lady took it upon herself to change the term to 40 years after taking our check for the appraisal. Why? Loan officers don't make a nickel more on a 40 year term than a 30 year term.... OTOH... you might not have even qualified for the higher payments of a 30 year term... and you may have been completely turned down at the higher 30 year term payment. Shifting you to a 40 yr term MIGHT have been your savng grace entirely... On the third set of paperwork she then took my husband off the loan altogether which made us furious Why???? so we decided to try for a rate adjustment. Huh??? Why???? Supposedly, the best they can do is 7.84 percent fixed which I think is still rather high. Why? Compared to what? We currently owe 115K on the house, it appraised for 176K and we have not been late even once on our mortgage in the last 3 years. Our combined credit score through Transunion is 680 which is decent so I don't see what the problem is. Me niether... but there is still so much unknown about the truth here. To date I've spoken with several people at TCF's corporate office and left a voicemail with the regional manager for the consumer loan division of the branch I've been dealing with. Is 6.5 to 7 percent too much to ask for? Could be, if you don't qualify. And are there any other tricks to negotiating with them to get them to lower the rate. No, nothing tricky to try. I'm going to try reaching the regional manager again in the next day or two. However, I've been told by a couple of folks from corporate, in confidence, that he may be quite nasty especially since I didn't follow through with original consumer loan manager at the bank where the loan originated. I left her two detailed voicemails but she never returned my calls. I'm wondering if there could be a connection in the fuzzy details of this post... and the responses you're getting at that bank. Is there a reason you're not having a broker do this all for you? Luck, Dave Donhoff Leverage Planner

Berniek is right: Much of the blame here falls upon the shoulders of the politicians (led by then-President Clinton), who forced banks to begin some rather foolish lending practices. Alan Greenspan certainly did his share to push this concept of "everyone can borrow" during his time as Fed chairman. Between creative financing, no money down offers, and other such options, the government has given people plenty of rope with which to hang themselves. We Americans haven't proven ourselves to be particularly strong in the moderation and self-discipline categories over the last 30-40 years. Also, remember the climate that existed in the 90s, when I bought my first house: Spurred on by the soaring housing prices, people were convinced that buying "as much house as you can afford" was a good move. Housing was considered an investment that couldn't fail. Yes, the experts began preaching about "the housing bubble" long before it hit, but the masses couldn't grasp how this sure-thing could ever fall. And there's always been a (faulty) basic belief that "If I couldn't afford it, the bank wouldn't lend it to me." I fully agree with those who say that Real Estate agents will push buyers to their upper limits and beyond, and banks will lend what they can -- it's all about profits for them. Yet, the home owner DOES also bear the brunt of personal responsibility. After all, who cares most about whether I can afford my mortgage -- and still buy groceries and other things I need? Clearly, it's ME! I reap the rewards or punishments of my decisions, so I should do the math and know whether I can comfortably afford a house (or anything else) before I buy it. However, we've sort of left that thinking behind in today's buy-now-pay-later society. We're constantly told that "we deserve" this or that thing. That if we're going to finance it, we deserve to have exactly what we want. That "everyone" has debt. We've got to get past that.

Red flag to me is "coming to the house". After my mother's death, I found paperwork of a home improvement loan (2nd mortgage). This turned out to be a predatory loan. The salesman (also a notary) was extremely good at winning her confidence and they really pulled at fast one. She, at the time, didn't share the details of this loan 'scam', but during the estate settling, there were some major headaches to deal with. They had had her quit claim her home out of the family trust, then talked her into not one loan, but a second loan -- all with exorbitant fees. There was even a bogus lien on the house which had to be dealt with. After this, my mother's name must have been sold to a "sucker's list" because there were so many phone calls. But luckily, there were no more major scams that I was aware of. So when you say the broker will come to the house, I am naturally very skeptical. Will s/he still come to the house if s'he is made aware that an attorney will review all paper work? Good luck Susan

Yes, they're right. Your interest each month is calculated based on the principal owed in that month. So if you make an extra payment against principal, the principal owed goes down a bit, and the interest owed thus goes down, meaning that more of your payment goes toward principal. If you wait to make the lump sum payment, then the principal owed is higher than if you made additional payments all along, and the interest owed is also higher.