Refinancing a mortgage can benefit you in a number of ways. It could lower your monthly payments, save you thousands in interest, and it could even make the life of the loan shorter; meaning you pay it off early. If this is what you want to do you should take the time to find the right lender for your situation. It is always easy to walk into your local bank and request a loan, but, this may not be the best idea for refinancing a mortgage.
How to Find the Best Lender
The first people think of for a home loan is banks and credit unions, but, there are other potential sources that should be considered. There are savings institutions and consumer finance companies and it is well worth the effort to research any of them available to you. This time can have a substantial effect on the amount of money you spend out of pocket to secure a loan and the amount of money you will spend over the period of the loan.
Remember when you are looking into refinancing a mortgage loan officers will be getting paid off the transactions that they secure. An actual mortgage broker can assist you to compare the lenders and help you to secure the best possible loan. They will receive a fee from you the buyer for their assistance. The broker will also get a fee from the lender for bringing business to them. Lenders are allowed to make their own decisions on the fees they will charge their clients so, shop around don’t sign with the first lender you talk to. The may also have different charges for filing so be sure to ask all the questions and be clear about everything before you sign any paperwork.
Key Factors to Keep In Mind
First and foremost make certain that you understand all the terms of the loan you are getting when refinancing a mortgage. You should know the monthly payment, how many years you will be paying on it, the interest rate, if there are fees and how much they are, and if there will be a penalty if you pay the loan off early. As for the fees and costs involved with the loan the lender should supply you with a “good faith estimate” that includes all the fees and costs you will be expected to pay at closing.
There is no law that regulates what lenders charge for fees and cost, but, the good faith estimate gives the customer something to use to compare one lender to another. Your prospective lender should also be able to answer your questions in a timely and reliable way. When you are getting a loan for refinancing a mortgage you are going to be expected to supply a lot of personal information and therefor your lender should be readily available for your questions. If you find that you are having a hard time contacting your lender or they often don’t have the answers to your questions; you may want to find a lender that spends more time worrying about the customer’s needs.
Another issue that often comes up when you are working with a lender is, paperwork not being ready and available at the time of closing. If you have a good lender they should be able to keep everything on track and keep everything moving smoothly so you can have peace of mind through the process. If all documentation and information isn’t ready at the time of closing you could lose the opportunity for refinancing a mortgage. A good lender should make a solid contribution to you refinancing a mortgage.
It Is Easier Than it Used to Be
There was a time when learning about lenders and doing research on different companies as a very time consuming problem. You had to drive from place to place and talk to someone at every company that you were considering for refinancing a mortgage. If you weren’t driving around you were spending multiple hours on the telephone. You can still do it the old fashion way if you want to, but, the advancement of technology has made it so much easier for you. Now you have the information highway provided on the internet.
There are many ways to look online to see what the current interest rates are. There are also ways to compare lenders on line that make it much more convenient for you. You will find that you can gain a lot of insight studying lenders online. If you are like a lot of people you are going to want to have a face to face meeting before making a final decision; which is a good idea to help put your mind at ease. Use all the tools at your disposal to make sure that you are making the most informed decision and getting the best deal you can.