What is the latest buzz in refinancing? Are lenders offering more competitive rates? Is it better to refinance with a local company or one that lets you choose from a list of lenders nationwide? The real answer lies somewhere in between. Here’s what we know.
Right now, mortgage rates are low. For a lot of people, it is a perfect time to refinance. After all, many people are having trouble paying down their debts. If you have been thinking about refinancing, consider refinancing now to get low refi rates and pay off your debts sooner.
There are two basic types of refi: A direct refi with a local lender or a lender online. Both have advantages and disadvantages. While some people will do a both because they are the same, it really depends on your situation and which lender offers the best deal.
If you are thinking about a real, your best option would be to work directly with a local lender. Working directly with a lender lowers your costs because you won’t have to pay for a broker, which can be as much as 10 percent of your closing costs. Local lenders also offer the advantage of meeting face to face with your lender. That personal contact also gives you the chance to find out if the lender is right for you. Ask questions about interest rates, customer service, and other important considerations. Then, make your decision based on those factors.
Lenders that let you choose from a list of lenders nationwide have advantage. You’ll have more options and possibly save money. But you will be competing with hundreds of other borrowers for a loan with the lowest refi rates. If you want to save, you’re better off going with a lender with no nationwide presence.
The first thing you should consider when negotiating refi rates is whether or not the interest rates are negotiable. Negotiation usually means lowering the rates a bit. This means that you may pay more in the long run, but it might be worth it to you if the rate you’ll get is significantly lower than the one you originally thought you would get. Once you’ve decided on a lender and fixed refi rates, don’t forget to include other costs into your budget. That could include travel expenses to and from your new home, furniture, and other miscellaneous costs.
The best way for homeowners to get the best refi rates is to negotiate early. Before you shop around, figure out exactly how much your monthly payment will be. Then, talk to your lender about the difference between what you owe and what your potential real savings will be. Sometimes, lenders will offer a discount if you prepay the entire loan for less than the balance due at the time of the read. If you have any existing debt, such as credit card debt, you will also want to consider refinancing before beginning the process of a refi.
If you’ve worked out a payment plan with your lender, stick to it. Otherwise, you will be running the risk of losing your house because you can’t afford the new rent rates. The lender will also want to know what you’ll be doing if the economy tanked and you lost your job.
A good thing to do if you are having difficulty getting refi approval is to contact your lender directly. Find out their real policy and their requirements for borrowers. You should also keep in mind that many lenders are becoming more aggressive in assessing mortgage refi candidates. That means you may need to be willing to submit additional documentation on a borrower’s financial situation.
If you don’t know where to start shopping for a better rate, you should consider looking online for a lender. There are now dozens of sites that allow you to compare home loans side-by-side. You can usually get a better idea of which refer candidates have the best offers by browsing through the online galleries. It’s not only easier to keep track of your competition, but you may even find a better deal.
Keep in mind that it usually takes up to three months before you receive official refi approval. If you submit an application on time, you may be able to lock in a rate in as little as ten days. Before submitting your refi applications, be sure to check out your lender’s current offers. Sometimes they can offer lower rates after an initial rate quote has been provided. Remember, however, that it is important to read through every word in the fine print before submitting anything.