If you’re considering jumping on the mortgage refinance bandwagon to take advantage of today’s best refinance rates there are several things you need to know about the fees you can expect to pay. Scouring the Internet for the best refinance companies or good banks to refinance with will help you find today’s lowest refinance rates; however, the test of how good of a deal you’re getting depends on the fees you pay. Getting a good deal means you need to understand the good faith estimate including what this document isn’t telling you. Here are several of my best tips before you refi to help you avoid paying unnecessary expenses and markup on your mortgage refinance.
Avoid Unnecessary Mortgage Refinance Fees & Markup
You might have come here today by typing a phrase into Google like Using Mortgage Broker Over Bank because you’re searching for the best refinance companies. The fact of the matter is that mortgage refinancing in today’s economy means that just about anyone has access to historically low mortgage rates; however, the trick is avoiding unnecessary fees and markup.
The reason your closing costs are so important when it comes to your mortgage refinance is that you have to recoup these expenses before gaining any benefit from your new, lower monthly payment and interest rate. The more you pay obtaining a new home loan the longer it’s going to take to break even on your closing costs from your savings.
Should I Refinance My Mortgage?
This is a question that leads to a several common mortgage mistakes. Conventional wisdom states that you should never do a mortgage refinance unless the best refinance rate you qualify for is exactly two percent lower than your previous interest rate. Making generalizations about anything in life is usually a bad idea and doubly so when it comes to your personal finances. So how can you decide if a mortgage refinance is a good idea in your situation?
Start by looking at how long it will take to recoup your mortgage refi expenses. Add up all the fees including the loan origination fee and closing costs. Divide this amount by the amount you’ll be saving each month and you’ll have the number of months it’s going to take to break even. If this number is acceptable to you then mortgage refinance probably makes sense in your situation.
How to Pay Less for Your Next Home Loan
You can cut the amount of time it takes to break even on your mortgage refinance by avoiding unnecessary fees. There are a number of mortgage junk fees that serve no purpose other than boosting lender profits at your expense. These junk charges include rate lock fees, application fees, loan processing fees and courier fees. The problem with using the good faith estimate to comparison shop when mortgage rate shopping is that there is no standard for the good faith estimate from one lender to the next. This makes apples-to-apples comparisons nearly impossible. How can you get the best deal on your next mortgage refi without paying unnecessary costs? The answer is simple: Find the right person to arrange your next home and you’ll not only avoid paying lender junk fees but you’ll have access to wholesale mortgage rates.
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You can learn more about finding the right person to arrange your mortgage refi while avoiding junk fees by checking out my free underground mortgage videos.
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My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
