If you’re considering refinancing and want the best mortgage lenders for your next home loan you might be considering one of the lending giants like Amerisave. Is this the best way to get today’s lowest refinance rates? Should you trust a mortgage broker to help you avoid paying junk fees? Here are several tips before you refi to help you find the best mortgage lenders for your next home loan without paying unnecessary fees or markup.
Best Mortgage Lenders Online
The internet is an excellent tool for researching the best mortgage lenders. You’ll find a lot of deceptive advertising online so it’s important to understand the bag of tricks lenders like Wells Fargo Refinance use to trick you into overpaying. One example is the way lenders quote refinance mortgage rates using discount points. According to Freddie Mac’s recent lender survey mortgage refinance rates dipped below four percent last week; however, the fine print reveals that interest rates didn’t actually go down. Lenders use discount points to make their rates appear lower than they actually are.
Beware Unnecessary Discount Points
Discount points are a fee used by the best mortgage lenders use to make their loan offers seem more attractive. Mortgage refinance rates have been hovering around four percent for six weeks now; however, to make their loan offers appear lower many lenders quote discount points to create the illusion of lower interest rates. To get the rate being quoted you’ll not only have to qualify based on your credit score but you’ll have to fork over the cash at closing. One discount point is defined as one percent of your loan amount paid at closing. In exchange for this fee the lender lowers your refinance rates by .25 percent per point; however, you may not see discount points quoted as a full point. Always check the fine print to see if you have to pay points to get the rate you’ve been quoted.
Lender Junk Fees Sour Your Deal
The best mortgage lenders and brokers aren’t above using junk fees to boost their profits at your expense. One common mortgage mistake is overpaying the loan origination fee at closing. Mortgage loan origination fees are paid to the person or company arranging your mortgage refi, often a broker. The most you want to pay for mortgage loan origination is one percent of your home loan; however, it’s not uncommon for brokers to quote double this amount, even more. Other common junk fees include application fees, rate lock fees, third party processing fees and broker courier fees.
How to Find the Best Mortgage Lenders
Many homeowners approach mortgage refinancing like buying a kitchen appliance. They’ll shop online and check the big box stores to find the best price. This approach works fine when you’re buying a new refrigerator but fails miserably when shopping for a new home loan. The reason mortgage refinance rate shopping is so difficult is that unless you work in the industry there’s no good way to get an apple-to-apples comparison of fees from the best mortgage lenders. The problem with mortgage rate shopping is that the Good Faith Estimates (GFE) you’re provided have no standards for which fees included. Disclosure laws require mortgage lenders provide you a Good Faith Estimate but say nothing about the fees lenders include or even how truthful the quotes are. This is why your GFE is little more than a marketing tool used by even the best mortgage lenders to sell overpriced home loans.
How do you get the best deal when mortgage refinancing? Finding an honest mortgage broker will not only help you get the lowest refinance mortgage rates but help you avoid paying unnecessary lender fees.
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You can learn more about refinancing with the best mortgage lenders without overpaying by checking out my free Underground Mortgage Refinancing Videos.
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