Ramit SethiRamit Sethi: The No-BS Guide to Living a Rich Life

Paul saves $5,000 a year on his house with a phone call

23 Oct 2009 · 1 min

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1:06

Short transcript excerpt from a Ramit Sethi YouTube video (oct 23, 2009) where Paul recounts calling his mortgage company. The company sent paperwork by FedEx to be returned within three business days and agreed to reduce his interest rate—dropping from about 6.25% to roughly 4%—saving him about $400 per month (approximately $5,000 per year) on his mortgage.

Questions this video answers

About $400 per month.

About $5,000 per year.

From 6.25% to about 4% ("4 and something").

Return the FedExed packet within three business days.

Chapters

Wait, wait. Start again. Paul, are you serious? I actually FedExed papers back yesterday. So, Paul, tell us that story one more time. Yeah, so I actually called my mortgage company and said to them, you know, hey, my house isn't worth what it used to be, and I can't refi. What do I do? And she started off by saying, well, you've got this obligation. You got to pay it. And I said, well, okay, well, that's cool, but, you know, my parents are down the street. I can kind of move home, and some of my friends are walking away. What do you suggest? And she said, well, look, we can just streamline this. We can do your investor. She said something, but I wasn't listening. All I heard was, we're going to FedEx a pack it out tonight. You need to return it within three business days, and if you do, we'll go ahead and do a 30% rate cut on the loan. How much will that save you? That will save me about $400 a month. Wow. Not bad. So $5,000 a year. What was the percent change? It was. It went from 6.25 to 4 and something. So $5,000 over 30 years with interest. Will you call my bank for me?