NFCU mortgage and the no refi rate drop

[Curious_George2]

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@Curious_George2 wrote: 

The other important thing to bear in mind about the No Refi Rate Drop program is that it can be ended at any time. Navy introduced the program in 2023, for the obvious purpose of motivating people to take on a mortgage despite the relatively high interest rates at the time. The fine print says "RATES AND TERMS ARE SUBJECT TO CHANGE AT ANY TIME WITHOUT NOTICE." It seems to me highly likely they will terminate this program when rates fall low enough that the mortgage market returns to something like a normal level of activity (and, therefore, profitability). None of us know when that will be, but no one should assume this program will be around long enough to let them ratchet a 2024 mortgage down to a sub-3% interest rate. 

Update: I recently closed a home purchase, using Navy's HBC mortgage. The documents we received at the closing included one called Rate Reduction Option Agreement. This is where they formalize the no-refi rate drop feature. To my surprise and delight, this document says "you will be able to exercise the Rate Reduction option to reduce the interest rate on your loan pursuant to the terms of this agreement for the life of your eligible loan."

So, even if/when they stop offering this option on new loans, I will get to keep ratcheting my rate down as many times as I want. That's incredible! I don't think this feature is getting as much attention as it deserves. I, for one, look forward to lowering my rate many times, for as long as I own this house. 

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[Blender]

I was just approved friday for the HBC @ 7.125%

HBC can refi every 6 months. Conventional 8 mo + closing costs. For me, right now against the current economy this made the most sense. 

Markets typically stay stagnant at this time of year anyway, so if you love the house and can afford the extra 200/mo for 6-12 months, go for it

[Realist]

In our current home, we've refinanced a handful of times, always reducing payment and rate, as well as produce multiple cash out opportunities along the way.  I understand how this might read, as you have to deal with certain fees at closing, but in the end, this ultimately produced a fantastic opportunity for us.  There is a reason for the madness, so long as the numbers work, and for us they worked very well.

We ultimately ended up at NFCU securing a very low VA loan rate, with an excellent cash out option.  Immediately upon closing, in less than six to twelve months, interest rates doubled.  I knew what was coming, and insisted we close fast, which NFCU does not do well.

My advice is to find the best rate for your sitation, among any lender and their program.  I interviewed may with a set of questions and criteria I was looking for, and NFCU may or may not fill this role for you.  There was a specific reason why I selected them, and found out, they aren't quick by any means.  But yes, it was worth it to make the numbers work because they offered the specific product I was looking for.

If rates do drop, you can always shop around and refinance.