Home Mortgage Refinancing Guide

If you are considering a home mortgage refinance loan for any reason, there are several things to consider before applying. Doing your homework and choosing the right type of home mortgage refinance loan will help you avoid the majority of mistakes homeowners make when mortgage refinancing. Here are several tips to help you decide if a home mortgage refinance loan is right for you.

Home Mortgage Refinance Loan Rate & Term Length

Choosing the right interest rate and term length is an important part of mortgage refinancing. The type of interest rate you choose determines the level of risk for your home mortgage refinance loan. Choosing a Home Mortgage Refinance Loan with a fixed interest rate allows the least amount of risk while adjustable rate home mortgage refinance loans carry the highest risk.

Term length is the amount of time you have to repay the mortgage and along with your mortgage interest rate determines your monthly payment amount. Depending on your needs for the home mortgage refinance loan you may want the lowest payment possible. To get the lowest possible payment choose a mortgage with a longer term length. Traditional mortgage loans usually have term lengths of thirty years; however, choosing a forty or fifty year term allows the lowest monthly payment possible without using an interest only loan.

Home Mortgage Refinance Loan with Cash Back

When taking out a home mortgage refinance loan you have the option of borrowing against your equity. Mortgage refinancing with cash back can be used for any reason. You can use the money to consolidate your bills and improve your credit, pay for repairs or renovations to your home, college tuition, or even buy a new car. You can learn more about your home mortgage refinance loan options, including costly homeowner mistakes to avoid by registering for our free mortgage tutorial.

The Office of Federal Housing Enterprise Oversight recently confirmed this year’s Conforming Loan Limit will not change from the 2006 amount. The 2007 Conforming Loan Limit is $417,000. If your home mortgage refinance loan will be greater than $417,000 you will probably need to refinance using a jumbo mortgage loan.

If you are a homeowner currently paying on a Jumbo Mortgage and owe less than $417,000, you should refinance this mortgage as quickly as possible to take advantage of lower interest rates. Once you have paid your mortgage below the 2007 Conforming Loan Limit you will qualify for traditional mortgage financing and much lower interest rates.

You can learn more about your home mortgage refinance loan options, including how to avoid overpaying for your next mortgage by registering for a our free mortgage tutorial.

Home Mortgage Refinance Loan: What You Need to Know

If you are considering refinancing your mortgage with lendingtree.com you should reconsider if you don’t want to overpay for your next loan. LendingTree claims there is not fee for using their service; however, this is simply not true. You will pay LendingTree as much as $1300 for using their website to find a mortgage lender. Here is how LendingTree deceptively makes their money referring your business to mortgage lenders.

If you head over to LendingTree’s website and click on the link for Licenses and Disclosures you can read how LendingTree makes their money. LendingTree claims they are a “Computerized Loan Originator.” This means they are acting as a broker and are paid for referring your business to mortgage lenders. They claim: “LendingTree, LLC does not charge you any fees for its services.” This is simply a bold face lie.

If you scroll down the page to the “Good Faith Estimate Addendum” you will see that LendingTree receives a “Computerized Loan Origination Fee” of up to $1300 and this charge will appear on the Good Faith Estimate you receive from the lender. Because the fee is charged by the lender and paid to LendingTree they claim you are not charged for their services. Either way, you’re still out $1300 and LendingTree is lying about their fees. Does it matter who charges you the fee for their services?

How can you avoid paying Computerized Loan Origination Fees? Do your own online mortgage research you can comparison shop from a variety of mortgage lenders and apply directly from their websites, avoiding third party fees charged by sites like LendingTree completely. To learn more about mortgage refinancing while avoiding costly mistakes, register for our free mortgage tutorial: Mortgage Refinancing, What You Need to Know.

Mortgage Refinancing costs are an important aspect of comparison shopping for the best mortgage loan. You can expect to pay many of the same expenses when refinancing as you did when purchasing your home. By carefully comparison shopping from a variety of lenders you can minimize your mortgage refinancing costs. Here are several tips to help you recognize fair mortgage refinancing costs when comparison shopping for the best loan.

When comparing mortgage refinancing costs it is important to use the Good Faith Estimate as the Annual Percentage Rate does not give you enough information to make an informed decision. Mortgage lenders are required to give you the Good Faith Estimate outlining your mortgage refinancing costs within three days of receiving your application; however, you can request the document before applying simply by asking for it. Once you have the Good Faith Estimates of mortgage refinancing costs, here are several items you need to focus on.

Mortgage Refinancing Costs: Loan Origination Fees

Make sure the loan origination fee listed on your Good Faith Estimate is not greater than 1-1.5% of your loan amount for a home you will occupy. Origination fees for investment properties you will not occupy are typically higher and you can expect to pay 2-2.5% of the loan amount for an investment loan. This fee may be called an “origination fee,” “mortgage broker fee,” “discount points,” or a combination of these terms.

Mortgage Refinancing Costs: Loan Processing Fees

This fee is often paid to a third party processing company. Regardless of who gets it, the loan processing fee should not be higher than $400. Loan processing fees vary widely from one lender to the next; however, anything greater than $400 is considered excessive. If a mortgage company is charging more than this amount ask them why the fee is so high. If they will not change it scratch that mortgage company off your list.

Mortgage Refinancing Costs: Beware Junk Fees

Carefully review all the mortgage refinancing costs found on your Good Faith Statement. You are looking for anything that resembles an application fee, lock fee, submission fee, administration fee, or a courier fee. These are simply junk fees and you should refuse to pay them. If a lender will not negotiate on theses unnecessary junk fees you should scratch that lender off your list.

You can learn more about comparing mortgage refinancing costs and avoiding common mistakes by registering for a free mortgage tutorial on Mortgage Refinancing Costs.

There are more options today for mortgage refinancing than ever. Mortgage lenders offer loans for every financial situation and credit rating. Choosing the wrong type of loan or neglecting to do your homework and research mortgage lenders could be a costly mistake. Here are three tips to help you avoid overpaying for your next mortgage loan.

I. Mortgage Refinancing: Watch Out for High Interest Rates and Fees

Mortgage companies and brokers routinely mark up the interest rate you qualify from the wholesale lender that approved your loan. This markup of your mortgage interest rate is called Yield Spread Premium and there is a way to avoid paying it. When your mortgage company or broker provides you the written guarantee of your mortgage interest rate, ask to see the guarantee from the wholesale lender. If your mortgage company refuses, find another company that will show you this document.

II. Mortgage Refinancing: Carefully Review the Good Faith Statement

To avoid overpaying when mortgage refinancing it is important to carefully review the charges found on your Good Faith Statement. The origination fees you pay should not be higher than 1-1.5%. Find the loan processing fee and make sure you are not being charged more than $400. Carefully review the Good Faith Statement for anything that resembles an application fee, lock fee, broker administration fee, or courier fees. These are junk fees you should simply refuse to pay.

III. Mortgage Refinancing: Beware the Risk of Foreclosure

If a mortgage company asks you to exaggerate your income or sign blank or incomplete documents, this is a sure sign that you are dealing with a dishonest company. Predatory mortgage lenders use this tactic to structure their mortgage loans to promote default; when you are unable to keep up on your payments the lender will foreclose and take your home. When you do your homework and carefully research mortgage offers, predatory mortgage lenders are easy to spot.

You can learn more about mortgage refinancing while avoiding costly mortgage mistakes by registering for our free mortgage tutorial:

“Five Things You Need to Know before Refinancing Your Mortgage.”