Last summer, with mortgage interest rates dropping, I did what millions of others were doing: I decided to refinance my home loan.
Not much liking these matters (ah, the paperwork!), I decided to contact my current mortgage lender, PNC. Online, their rates were competitive with others.
The process was pretty smooth, but throughout, as the interest rates continued to drop, I kept confirming that my rate would be adjusted lower at the time of closing. The answer to this was always “yes.”
As the final papers were being prepared for signing, I asked again. Now the story changed: I could only drop to 4.00% (from 4.25%), and that would be if I came to closing with thousands of dollars.
I sent them a screen cap of listings from BankRate.com (including theirs) showing the current 15-year rate was 3.25%. They didn’t care; said it was something to do with loan subordination with my line of credit.
So I called Wells Fargo, the bank which holds my line of credit. I was approved at the 3.25% rate immediately; there were no issues with loan subordination. I had the same contact person from start to finish, making the whole transaction feel very “small bank” and personal – a pleasant surprise.
PNC let an existing customer who always paid on time walk away. How much will it cost them to find a brand new customer? Why wasn’t the salesperson empowered to revise their interest rate to keep me with them? I don’t understand this type of marketing or sales logic.
On the other hand, my contact at Wells Fargo has already gotten two referrals. A much more cost effective customer acquisition strategy!