Hey there, so we owe about $215k on our primary residence in Southern Cal. Currently on a 15-year mortgage at 2.875%. I never thought I'd ever refinance, but now I hear commercials where they're advertising 30 years at 2%! We tried calling a couple places to see if we could do a no-closing cost refinance and get our rate down another half a point or more, but no luck - they all said our balance is too low. Does this sound right? Or does anyone know of companies who would do this?

1. $215k = low balance?  That's insane!  Obviously those are Cali lenders looking through loan balances normalized off of local prices.  I am told the same thing in Oklahoma about a $75k loan balance, ha!

2. This probably IS legit (ish) for two reasons.  First, this is a "bait and switch" strategy most likely, where a rate that is technical in theory is being advertised, but the real rate varies for most people (who are in the door because of the amazing rate they saw on the ad).  Second, and perhaps the guiding light here:  these companies make their money from loan origination, not the ongoing servicing of the loan.  So, they make some up-front fee at closing or soon after closing the refinance loan, sell the loan ASAP* to a (semi)governmental entity, and rinse and repeat.  That being the strategy, they don't want to get out of bed for just any ole loan . . . they want the ones with some meat -- likely the ones that conform with their companies internal loan limits.

*ASAP - because who in their right mind wants to get stuck holding a 2% ROI note against a borrower and a house for 30 years? Only tha GOV