When the current mortgage rates are lower than the rate on your existing home loan, you can achieve significant monthly savings by refinancing your home mortgage. Like most of life's large financial decisions, shopping around to find a better deal will save you a significant amount of money. When refinancing, the search involves finding the best mortgage lender or bank for your situation.
Start at Home
One source for a refinance mortgage loan may be your existing lender. Contact your mortgage servicing company and ask for a refinance rate quote including points and closing costs. An important point to remember is that your current lender might not want to refinance you out of your current higher rate mortgage and lose the higher return. Always compare any offer from your current lender with other offers from outside banks. A benefit of using your current lender is the possibility of fewer closing costs, as the title insurance fee might be waived. If you have little or negative equity, your current mortgage lender may be your only source to refinance at a lower interest rate.
Internet Mortgage Quotes
Mortgage information websites make it easy to get refinance quotes from a number of mortgage lenders. The websites collect the information about your refinance and shares that information with mortgage banks that will give you rate and cost quotes. According to a "New York Times" article, you can receive up to 20 refinance quotes from a single online application. After receiving refinance proposals, you should look into the customer service reputation of the companies offering the better rates. Look for online reviews and make phone calls to talk to a live representative of each mortgage bank. Check with the mortgage information website to find out what protection they provide against bad or unresponsive lenders.
Working With Local Banks
Other possible mortgage lenders are your local banks, credit unions and mortgage brokers. Contact several lenders in your area and find out if they are willing to match or come close to the best offers you received through the online lenders. Local lenders might provide a better level of customer service -- they should -- and provide a local contact you can call with questions or problems. A local mortgage banker will be familiar with the local real estate market. This could be a big benefit if your home or financial situation is a special case due to local conditions.
Special Mortgage Programs
If you want to refinance using a special mortgage program, make sure you select a lender who is familiar with and registered for that program. These programs include the different loans offered through the Federal Housing Administration and Department of Veterans Affairs. If you currently have one of these loans, the refinancing process may be streamlined. To finance using the Home Affordable Refinance Program, you must work with a lender approved by Fannie Mae or Freddie Mac.
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