If you’re in the market for mortgage refinancing you might find that your lender provided Good Faith Estimate is little more than a marketing tool used to sell you an overpriced home loan. According to MortgageLoan.com, the Consumer Financial Protection Bureau (CFPB) (newly formed government agency formed to combat predatory lending) has simplified the disclosure form you’ll receive on your next mortgage refi.
The new form is intended to replace two documents currently provided to borrowers, the Truth in Lending Disclosure and the Good Faith estimate. Those forms, which are required by law, provide a borrower with specific information about the mortgage they are seeking, including the interest rate, monthly payment, loan fees and, in the case of an adjustable-rate mortgage, the maximum monthly payment the loan can reset to over time.
http://www.mortgageloan.com/new-loan-disclosure-forms-unveiled-8672
The government is calling the new project against predatory lending “Know Before You Owe.” The FTC has recently acknowledged that the overwhelming majority of homeowners neglect doing their homework before mortgage refinancing which almost always results in overpaying thousands of dollars in fees and unnecessary markup.
The closing costs and loan origination fees you’ll pay when refinancing largely determine how good of a deal you’re getting on your mortgage refi. This despite whether you’re getting the best refinance rates of the year, which are still falling to historically low levels. (Of all time)
The reason for this is that you have to recoup your expenses from mortgage refinancing before you’ll realize any savings from your lower payment amount. Most homeowners overlook fees in today’s economy because they’re blinded by record low-interest rates.
There are many junk fees you’ll want to avoid when refinancing your home loan. Application fees, rate lock fees, processing fees, and Yield Spread Premium can quickly turn that sparkling low mortgage rate into a sour deal, costing you thousands of dollars unnecessarily. You can learn more about avoiding unnecessary fees and markup on your next mortgage refi by checking out my free Underground Mortgage Refinancing 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.
