One of our readers recently asked us to the find answer to this short, but complex question:
How do you find the best refinancing deal?
Dominic Turano of First Home Mortgage offered some insight:
It’s a great question, but a somewhat difficult one to answer. Mortgage pricing is very loan specific, so your property type, loan balance, credit score, income, property location, property features, as well as numerous other factors will impact the interest rate you’ll actually be able to obtain when refinancing. If you know clearly those items that will impact your loan pricing, you’ll be sure to get the most complete and accurate quote from a lender.
Once you establish the set of factors that weigh into your loan, remember that loan pricing will exist in a somewhat tight range. If your loan can be priced using Fannie Mae guidelines, most companies are going to be selling the same mortgage money, driven by pricing and movement in the Fannie Mae/Freddie Mac MBS (Mortgage Backed Security) market. For all intents and purposes, these loans will trade in a range that is plus or minus .125% from the current base rate. (Not true in all cases, but certainly in most.) My guess is that you’ll see this play out as you call lenders and see what they’re quoting. If you give them complete information, I’d be surprised if most of them aren’t in the same tight price range.
Knowing this, keep in mind what’s important to you. There are plenty of companies out there who help with mortgages, but not all of them are good. If know you can save that extra .125%, but it’ll take 120 days to close the loan and you’ll need to send paperwork 17 different times to 4 different places, is it worth it? Service and competence makes a difference, and your time may be short. Yes, .125% matters, but it might not be worth losing a week or two of your life to bureaucracy or poor service.
If you are seriously considering looking into refinancing, reach out to the people in your world who might be able to help. Start with your previous lender as he/she may know your loan best. Then, perhaps connect with your bank to see what they can offer. From there, ask colleagues and friends who may have gone through the process. Frankly, a word-of-mouth referral is likely where you’ll get the best of all worlds – a good deal and a good experience. It’s how most good loan officers build their business, and most people won’t refer bad service providers to a friend.
This article originally published at http://dc.urbanturf.com/articles/blog/how_do_you_find_the_best_refi_deal/5405
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