Refinancing can be frustrating when, after all is said and
done, you find you've been ripped off! Here is an easy
guide to help you save your money and have peace of mind.
It's so easy today to lose money unnecessarily when you
refinance. Hidden fees and penalties, terms you did not
completely understand or a hard core loan officer who
avoids issues you may have can create headaches you don't
need! Let us show you how to easily protect yourself and
come out way ahead.
=Knowledge Going In...
Go online and browse for major lender websites like Bank
of America, World Savings, Indymac Bank, etc. Every one
should have full descriptions of refinance programs
currently available. Look through the fixed rate and
adjustable rate mortgages and get a good understanding of
how they work. These big lenders spend a lot of money on
easy explanations of their mortgage refinance programs.
Take advantage of them.
=Making Contact
In talking with a lender, make sure the
loan officer doesn't avoid any of your questions. If they
get off track and evade issues, move on to the next lender!
And ALWAYS get a good faith estimate and full details of
the loan program you are interested in before making any
decisions to proceed with them. There will always be
questions once you see these that may give you pause.
=Don't Let Them Pull Your Credit Report Yet
If you give every home mortgage refinance company a green
light to pull your credit, this can affect your score
negatively. Wait until you find the company you trust with
the program you want. They need a good idea of how your
credit is to quote you properly. You can call the major
credit reporting agencies and request a copy of your credit
report and then fax it to them, or, have them send you a
Borrower Authorization Form which gives them permission to
pull your credit.
=Go Over The Fees
The fee schedule in a refinance can often include bogus
fees- fees made up to inflate the profit of the loan
officer. Only pay for necessary fees. Go over it carefully
with them. And remember- the origination fee is always
negotiable!
=Careful of the Prepay Penalties
There is always the possibility of prepay penalties,
especially with adjustable loan refinance programs. The
term of the prepay can be reduced or eliminated by paying
some points. But if it's a great loan that suits your
purposes, then save your money. Most prepays are 2 to 3
years in length. Most people refinance every 4-5 years.
=The Final Approval
Once the lender has received your full refinance package
and appraisal, upon approval of your loan, ask to see the
fee schedule from the lender. Make sure again that there
are NO junk fees.
=A Final Note...
When looking at loan programs, there are
all kinds with different advantages and disadvantages. TAKE
YOUR TIME! Make sure you discuss with your loan officer ALL
the possibilities. For instance, an interest only option
might be available, or a longer term on the limited fixed
rate program might be better for you. If you follow these 6
simple steps we've outlined, you will come out way ahead
and save yourself time, aggravation and most of all...MONEY!
About the Author:
Scott Zeeman is a trusted and respected author and writer in Southern California.
Refinance Rip-Offs: 6 Easy Ways to Avoid Them!
