If you’re thinking about mortgage refinancing and want a list of the best mortgage companies for your next home loan you might be better off concentrating on finding the right person to arrange your next home loan. One of the most common mortgage mistakes is to focus solely on finding the best mortgage companies or getting the best refinance rates while overlooking the loan origination fee and closing costs. Here are several tips before you refi to help you avoid common mortgage mistakes costing you thousands of dollars.
Forbes recently ranked their list of top mortgage companies of the year. Surprisingly, they’re nearly all banks. As you might know from watching my free Underground Mortgage Videos, banks are exempt from the Real Estate Settlement Procedures Act and do not have your best interests at heart when refinancing your mortgage.
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Beware Overpaying the Origination Fee
The loan origination fee, also called origination points, is the fee you’ll pay the broker or company arranging your mortgage refi. What’s a reasonable amount to pay for the mortgage origination fee? One percent of your home loan is perfectly fair, assuming you’re not having to pay discount points just to qualify. There are a number of junk fees loan originators try to slip past their customers such as rate lock fees, courier fees, and loan processing fees.
What About Closing Costs?
Many homeowners get so focused on finding the best refinance rates they overlook lender fees. What you might not know about the fees you pay at closing is that they are negotiable and vary from one lender to the next. Spend a little time haggling and shopping for the lowest mortgage fees and you can cut hundreds, even a thousand dollars out of your out-of-pocket expenses. The test of how good of a deal you’re getting on your mortgage refinance comes not from getting the lowest refinance rates, but paying the least amount at closing. The reason fees are so important is that you’ll have to break even recouping these out-of-pocket expenses from your lower payment amount before gaining any benefit from your new home loan. The less you pay, the faster you’ll benefit from your mortgage refi. You can learn more about refinancing your home with the lowest refinance rates without paying lender junk fees or markup by checking out my free Underground Mortgage Videos.
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.
