Welcome to Ask Clark, the column for answering your financial questions. Author money expert Clark Howard…
Can I ask my credit union to purchase my mortgage?
Mark from Michigan asks: “Since we purchased our home in 2012, our mortgage has been provided by no less than five different banks. The problem is not that my mortgage is being sold, but that smaller banks are being taken over by larger banks. The problem for me is that the annoyance of having to change account numbers and other information on such a frequent basis.
“I really don’t want to refinance my credit union as we have only lived in our house for five years and we have a pretty good rate. Is it possible to ask my credit union to purchase my mortgage so I have everything in one place? “
Also, where are things going in the financial industry? Will we end up with just one super, bloated, ultra-monster mega-bank in the United States? “
Clarke’s perspective on whether a credit union is going to buy out your mortgage
Clark says: No, the credit union is not going to buy your mortgage from any bank.
Clark thinks that refinancing through a credit union is actually your only solution to the problem of a growing bank, but he says it will be worth it.
“You’ll need to do a refi with your credit union, and you might consider getting them a 5/1 adjustable rate mortgage, where you would set the rate for the next five years,” says Clarke.
With ARM 5/1, the interest rate will remain fixed for the first five years of the mortgage. Thereafter, it is converted to an adjustable interest rate. Clarke says that, depending on the real estate market, “this may be a fairly low rate and you might be profitable to outbid it.”
Clarke’s perspective on bank consolidation
As for the trend of bank consolidation involving four “giant mega-monsters” – Wells Fargo, Chase, Citibank and Bank of America – Clarke says it will continue.
Clarke says he has been keeping a close eye on the “good news” from the banks all this time: “Good news! To serve you better, we team up with blah blah blah! “Let me tell you,” Clarke says, “this is good news for their shareholders only.”
For Clarke’s full perspective on this issue, listen to this passage:
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