From Whitney Tilson:
A) RUN, don’t walk, to refinance your mortgage. I did so last September, taking advantage of the low interest rates then, and saved a bunch of money, but the recent turmoil in Europe has triggered even more of a flight to safety, dropping the interest rates on 10-year US Treasuries to a ridiculous 1.75% on Friday (it was around 2% last Sept.). I called my bank (BofA) last week, not expecting much, but lo and behold, they dropped the rate on my 10-year interest-only mortgage from 4.13% to 3.40%! (There’s a $2,000 one-time fee, but it’s a big mortgage, so it pays for itself quickly; also, a friend said it can be rolled into the new mortgage, so there’s no out-of-pocket cost.) Not only that, in the 6-8 weeks it’ll take to process my paperwork, if interest rates go up, my rate is locked in, but if they go down, they’ll reduce my rate even more. This all sounds too good to be true, but I’m not complaining… Just don’t dawdle: interest rates change rapidly (the 10-year Treasury was at 1.98% at the beginning of this month).
B) My guess is that this might apply to other debts as well – for example, if you have credit card debt, call your credit card company, threaten to move your balance to a new card, and see what they’ll do. They’re benefitting from these low rates, but unless you ask, you can be sure that they won’t pass the savings along to you. The worst that can happen is they say no…
C) Even more broadly, you’d be surprised what you get by asking. My friend told me this morning that she went into the office of Time Warner Cable to ask about switching her set-top box because she’s getting a new high-def TV and, even though she didn’t even ask about it, they cut her monthly bill (for cable, including HBO, plus internet) from $160 to $80! I had a similar experience a few months ago when Time Warner tried to get me to switch my home phone service – I called Verizon and they cut my rate in half to keep me as a customer. So it’s not just GEICO where a phone call could save you a bunch of money…
D) I just learned that due to new regulations that were issued in January (which the airlines are appealing), all airlines are required to issue a full refund forevery ticket booked, even the cheapest nonrefundable ones, if you call and cancel within the first 24 hours after booking, as long as you book the tickets directly on the airline’s web site (not Orbitz, Expedia, etc.).
The airlines are NOT publicizing this for obvious reasons, but it’s an incredibly valuable free option if you aren’t sure of your plans but are afraid of losing a good fare – just book it and then if your plans change in the subsequent 24 hours, cancel.
I booked a US Airways flight last month and just before I clicked PAY, I had to check a box that said I understood these “ticketing terms & conditions.” Note that the second bullet says “Ticket is non-refundable” and you have to read all the way down to the eighth bullet to discover that “You have 24 hours to cancel your reservation for a full refund.”:
Ticketing terms & conditions
- · Ticket is non-transferable.
- · Ticket is non-refundable.
- · Unused tickets must be cancelled on the date of departure to retain value.
- · Any change to this reservation (including flight, dates, or cities) is subject to a $150.00 change fee per passenger. The new itinerary will be priced at the lowest available published fare at the time of change, which may result in a fare increase.
- · Ticket expires one year from original date of issue. Unflown value expires one year from original date of issue.
- · All fares are subject to change until purchased.
- · Read more about all US Airways taxes and fees.
- · You have 24 hours to cancel your reservation for a full refund. Please call 800-428-4322 or 800-245-2966 (TTY).
- · Checked baggage fees may apply.
- · Air transportation on US Airways is subject to the US Airways Contract of Carriage.View this document in PDF format.
- · Security regulations may require us to disclose to government agencies the data you provide to us in connection with this reservation.
- · Changes to the country of origin are not permitted, except for changes between the United States and U.S. territories.
- · Send US your compliments and/or complaints.
Sure enough, I booked the ticket and then successfully cancelled it and got a refund.
