Currently our mortgage is with the local bank...and just like you said, they took into account history in community, potential to be in the community for quite some time, credit score...my word and handshake type stuff you mentioned. And we certainly appreaciate their willingness to do that. However, all that they were willing to offer was a 3 year balloon note, which we took at the time knowing that we would refinance down the road...so we are really trying to do that now with rates so low and 1 year left before the note is due. The bank has said that they always renew the note if the lendee is paying it, which we are so we aren't really worried about what will happen when the note comes due...well, we do worry a bit in case my wife or I lose our job but...we just really want to lock in the low rate and save $300 a month...
So it's frustrating, but we are also thankful for what we have been able to do...
Anyway...that was more rambling than anything...
You will find in most places, the same appraiser is used for insurance and bake notes, especially locally.
My bank wouldn't take the independent appraisal for my insurance,
But when their 'Approved' appraiser (different guy, same company) came back with his report they did accept, it was identical at stating the 'Improvements' to the land and the qualities of the home,
And since I'd done the homework on my odd ball home, the same comparisons were in the appraisal that I provided the first guy, and NOT the second guy.
They also had the same pictures from the first guy that I submitted to the bank.
The first appraisal was $175 while the bank version cost me $1,200 which was kind of a pain in the butt, but at least I got the 'Mortgage', which cut my taxes and insurance down considerably.
Tax credits on a 'Mortgage' over a personal loan are considerable.
On the second part,
Since they want to keep you paying that $300 extra a month, the WILL throw up road blocks to keep you paying the higher rates.
I went to the local savings and loan with the first appraisal, the interest rates were about one point higher the the TV offered low interested fixed notes,
But the mortgage was kept local, and they did charge me $1,200 loan application and closing costs, but I dropped from 10.5% to 4% by switching banks,
The bank I had the loan with was doing the same thing you are seeing, they just didn't want to refinance at a lower rate...
So I went someplace they would,
THEN when I told them to get the up to day pay off total ready, I was coming into pay it, they tried to MATCH the deal I got at the savings and loan instead of loose the business (Didn't work, they don't have it anymore).
Savings and loan has been a dream to work with, since they own the mortgage locally, when I want to get some more money for new shop/garage, they forked it right over, refinanced for a flat $300 processing fee, and kept the same 4% flat interest rate.
No trying to amend a note someone else owns, no having to do a personal note to build the garage (between 10% and 13% with a lot of fees) then trying to refinance again including the garage to get rid of the personal note, none of that still stuff...
I'm on a hand shake basis with these guys,
When we bought a car, we called from 60 miles away, said we were buying a car (on a Saturday morning no less) and they faxed the car dealership a line of credit while we were on the phone,
Told me to come in on Monday or Tuesday and sign the papers.
We didn't use savings & loan credit.. for a car loan is pretty high interest rate about 7.5%,
But that easy line of credit actually lowered the interest rate the dealership financing company was willing to give us,
We would up just under 3% with the dealership financing, so for 3%, they can have it! No incentive to pay that off really early with only a 3% note!
Savings & Loan rates were like 7.5%, but the quick credit offer was the deciding factor in the dealership dropping from 6.5% to 2.99% to get the business...
When I called about $12,000 for a boat, the same thing happened,
Line of credit on the spot, no questions asked...
We didn't buy the boat, but it's nice to know it was that easy if we had gone through with the purchase!
Can't do that at any bank I know of anymore or I'd still be with the banks...