Oh, you will certainly encounter brokers and even lenders who tell you they are going to do it for free but I'm confident that you are smart enough to guess there is a catch. What the catch is depends on the person making the statement. If what they mean is they will make enough commission from your FHA streamline refinance to pay the costs for you or if they mean they will roll the costs into your loan so you will not have any out of pocket expense then they are simply being dishonest.
If they expect you to think they will work for free then they are calling you a fool ... maybe even an idiot.
So how are you to know?
There are simple litmus tests to tell if you are getting the best deal for your situation. Always compare the following:
1. The interest rate - this can be "faked" so also check
2. The Annual Percentage Rate (APR) - this is often how the interest rate can be manipulated
3. The discount points - this is how the rate is bought down to a lower level
4. The loan amount - if your loan amount is increasing this is how some or all of your closing costs are being paid
Keep in mind that none of these tactics are "bad" or "against you" unless the lender/broker/loan officer tells you they are doing your FHA streamlined refinance for "free".
Chances of finding a lender to work for free are about as high as finding a checking account that just gives you $3000 for no good reason.
THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.
EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.
Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender
Ken Cook - Web coder (I write the programs that make the whole world zing!) (678) 439-8683 Anything your mind can conceive I can create - online that is!
Social Media Edge Radio - seriously true professionals who won't misguide you with some crap they made up to sell more books and seminars. Every Tuesday at Noon eastern.
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NOTICE: I have been writing in this blog since July 2006. Some of the older articles may contain information that has changed. Please check the date and phone me if you have any questions.
Ken... so that checking account that I found the other day with $5,000 in it, it was just a hoax? Seriously, some excellent points. What about the higher rate to pay for your closing costs, yet telling you that you have a no closing cost loan.... lol thanks for putting the truth out there..
The reason people use the term "free" in their advertising is because there are too many idiots in the world who will still believe they are actually getting something for free. That's why there are so many stupid products that sell well on TV because they "include another set for free."
Why can't advertising be truthful anymore? Oh yeah, becuase then the honest people will kick their asses!!!
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Some people tell the truth. Thank you Ken!!
I hate to see the spammer posts selling in here.