Important Mortgage Refinancing Tips...

By
Real Estate Agent

                                                                    While getting a mortgage refinance can save you money and help you gain control over your finances, it isn't always easy.  You could be taken advantage of, overcharged, or you could even end up taking a loan that isn't in your best interest.  Loan officers often get a bad reputation of ripping people off, but remember, there are a lot of good, moral, loan officers out there that are really interested in helping people.  To get the best loan for yourself, you must be an informed borrower.  Here are some valuable mortgage refinancing tips that you should consider before refinancing. 

 The first important mortgage refinancing tip is that you should always interview your loan officer.  This person will be handling your finances.  You should at least like them.  Many people make the mistake of only asking about rates.  Instead, you should ask about their experience and see how they feel about the market.  Ask them for some mortgage refinancing tips and see how they react.  Are they friendly and helpful?  Do they sound irritated?  Go with your instincts to find a loan officer that suits you best. 

 Second, make sure that this is the best loan for you.  You may be persuaded to go with a loan that isn't in your best interest, so it's your responsibility to figure out what is best for you.  One way to do that is to compare the benefits of the loan with the total cost of the loan.  For example, benefits of a mortgage refinancing loan could be monthly savings and lower interest rate, while the cost could be high fees.  Ask your self if the loan meets your needs.  Have your loan officer explain all options until you fully understand what is being presented to you.  Don't be afraid to ask questions. 

 The third tip is to discuss all fees with your loan officer.  Remember, fees are how loan officers get paid, and you should know how much you are paying your loan officer.  Loan officers are often willing to negotiate their fees as well.  They are paid by points, with one point being one percent of the total loan amount. Ask your loan officer how many points they are willing to do your loan for. 

 The last tip is to get a good faith estimate.  A good faith estimate is a list of all fees and costs associated with your loan.  All loan officers are required to give a good faith estimate to the borrower.  This should be completed within three days of applying for the loan.  So what do you look for in a good faith estimate?  Look over all fees, such as processing, appraisal, title, escrow, and especially the yield spread premium.  Loan officers can get paid additional points by the lender to sell you a higher interest rate.  You may be paying the loan officer 2 points for their services, while the lender will be paying them 1 more point on the back end of the deal.  So in the end, they end up with 3 points.  You may be okay with this, and you may not.  If not, be sure to discuss it with your loan officer and get him to either reduce his origination fees or get a lower interest rate. 

 We all want to save money, and a mortgage refinance is a great way to do that.  Be an informed       borrower, find a good loan officer, and you'll avoid having a big headache.  I hope these mortgage refinancing tips will be useful to you.  

Comments (3)

Everard Korthals
---Preferred Lifestyle Advisors--- - Lancaster, PA
Mountain Realty

Welcome To Active Rain. We would encourage you to read the Active Rain Guidelines and Terms of Service. before proceeding. If you were to have any questions, refer to the Help/Faq group. All the best- 

Active Castellum ( Castellum Realty llc - Lancaster PA Real Estate )

Jan 04, 2009 03:57 PM
The Trumm Team Omaha Homes for Sale, Real Estate
Keller Williams Greater Omaha - Omaha, NE

Welcome to ActiveRain!

If you would like a few tips on getting the most out of ActiveRain, please visit my blog Welcome to Active Rain.  It has a few simple steps of what to do now that you have joined.

If you ever have any questions, just let me know.

Troy Trumm

 

Jan 05, 2009 12:58 AM
Yvette Gardner
Keller Williams Realty, Spartanburg, SC - Spartanburg, SC

Welcome to the Active Rain community. This is a great site with lots of information.  Have fun with it and hope to see more of your blogs soon!  We have a team of three outstanding full time agents to assist your buyers and sellers in Spartanburg/Greenville, SC.  Let us know if we can ever help. Again, welcome to AR!!

Jan 05, 2009 08:35 AM