Finding a good lender to refinance your mortgage can be almost
as important a decision as the actual mortgage you choose. In
order to make a wise selection of a refinancing lender you
should do four things:
1. Know the objective of your mortgage refinance
Do you want to lower your current interest rate? Generally,
refinancing your mortgage can be profitable if your current
mortgage is 2% higher than the prevailing rates. Do you want to
move from an adjustable rate mortgage (ARM) to a fixed rate
mortgage?
If interest rates are creeping up this may be a good idea. Do
you want to shorten the term of your mortgage to accumulate
value more quickly? Do you want to take cash out of your home's
equity? The mortgage refinance lender you pick will want to know
your reason for refinancing so that the appropriate mortgage
product can be chosen. You will also want to be aware of your
credit score and the terms of your current mortgage.
2. Know the different types of mortgage refinance lenders and
the different types of mortgage refinance products that are
available
Just like when your home's mortgage was originally financed,
there are a variety of lenders who can refinance your mortgage:
Banks, credit unions, mortgage companies. There are also brokers
who will find a variety of lenders for you. You should be aware,
however, that unless specifically contracted to do so a mortgage
broker does not have to find the mortgage refinance package that
might be the best for you.
Refresh your knowledge of the mortgage financing vocabulary. Be
fluent with terms such as interest rate, point and prepayment
penalties. Also, most newspapers publish a daily listing of
current interest rates for different types of mortgages. Become
familiar with these listings and check them on a daily basis.
3. Shop around and find several different lenders to refinance
your mortgage
The market for refinancing mortgages has become so crowded and
competitive that it is fairly easy to find several lenders to
compare. You might use a broker. The newspaper and the yellow
pages are also good places to start. If you are comfortable
negotiating the Internet, it is an excellent resource. There are
many services online which will perform a preliminary search for
a lender. Your current mortgage lender should also be included
in this group.
4. Negotiate the mortgage refinance loan that suits your needs
Many times the compensation a lender makes on refinancing a
mortgage is dependent on the terms of the mortgage so it is up
to you to make sure that the loan received is the most
advantageous for you.
You might want to investigate mortgage refinance lenders who
offer no closing cost loans or free appraisals. It is important
to make sure that you are comparing like products. In order to
do this, have your lender present proposals in writing and
require ample time to compare the different offers.
Prepare a list of the features of each loan. The type of loan,
interest rate, points, prepayment penalties, closing costs are a
few of the loan elements which should be compared. Check the
rate you are being offered against the rates from the most
current newspaper listings. The more organized, thorough and
knowledgeable you are, the better your decision will be.
Deciding to refinance your mortgage is an important choice that
should not be made lightly. Know why you are doing it. Know the
possibilities for refinancing lenders and products that are
available. Be willing to shop amongst the different lenders and
to negotiate a beneficial deal. If you follow these steps,
finding a good mortgage refinance lender will be much easier.
About the author:
View our recommended mortgage
Refi
lenders. Carrie Reeder is the owner of
ABC Loan Guide, an
informational website about various types of loans.
