Are you searching for the lowest refinance mortgage rates and are disappointed to find that the quotes you’re getting are higher than what lenders like Amerisave are advertising? Bait & switch tactics are very common with mortgage lenders and can wind up costing you thousands of dollars. Here’s what you need to know about how refinance mortgage rates are quoted and several steps to make sure the quotes you’re getting are as close to what lenders advertise as possible.
The Truth About Refinance Mortgage Rates
Lenders have two tactics they use to bait you when shopping for mortgage refinance rates. Most commonly, the advertisements you see feature rates based on a lofty credit score of 780 or better. This is a common practice: Suntrust Mortgage rates, Wells Fargo Refinance, they all advertise the lowest possible refinance mortgage rates to get you in the door. Once they’ve got you the refinance mortgage rates you’re quoted are based on your credit score. If you have a credit score less than 800 you’re going to find that your quotes are higher, unless you’re willing to pay to get lower.
That brings me to the second bait and switch tactic. Lenders routinely use discount points to make their refinance mortgage rates seem mortgage attractive. You’ll find a great refinance mortgage rate advertised by a lender like Bank of America that undercuts all others; however, buried in the fine print are discount points. This is a fee you’re paying to lower your interest rate to what the lender is advertising. One discount point is the equivalent of one percent of your loan amount and typically lowers your refinance mortgage rates by .25 percent.
Your Credit Score Is the Most Important Variable
Mortgage lender tricks like bait and switch are easy to spot once you know how they work. If you want the lowest refinance mortgage rates for your next home loan it’s best to focus on aspects of your application you can control, like you’re credit score. Here’s a chart that illustrates how mortgage rates are quoted for different credit scores and the effect low credit scores has on your cost of home ownership over time:
How can you quickly tune-up your credit score before applying for mortgage refinancing? It’s not as difficult as you might think and there are many free resources available to help you. Here’s an article on MortgageLoan.com with 5 common credit report mistakes that could wind up costing you thousands of dollars and what to do about them:
Borrowing money is painful enough without paying more than you should because of an error in your credit report. With the shockingly high number of credit reporting errors, do you know if your credit report is ready for prime time? If you haven’t gotten around to pulling your credit reports and your credit scores in anticipation of a home loan application, here’s a good reason to do it right now: credit reports often contain errors that can sink your mortgage application.
Mortgage lender bait & switch tactics are the only thing out there that will cost you money unnecessarily. There are junk fees and hidden markup that result in overpaying hundreds, if not a thousand dollars at closing, making it difficult if not impossible to recoup your out-of-pocket expenses. You can learn more about avoiding lender junk fees while getting today’s lowest refinance mortgage rates by checking out my free Underground Mortgage Videos.
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You can learn more about paying less for your next home loan by checking out my free Underground Mortgage Videos.
- Get My Underground Mortgage Videos