If you’re considering mortgage refinancing you might be searching for the top mortgage lenders online. While this approach may get you today’s lowest mortgage refinance rates it won’t necessarily help you avoid paying lender junk fees. One of the most common mortgage mistakes is focusing only on getting the lowest refinance rates at the expense of fees and points; the closing costs you pay make or break your mortgage loan and can quickly turn the deal into a big sticky lemon. Here are several of my best tips before you refi to help you find the top mortgage lenders without paying lender junk fees or markup.
Top Mortgage Lenders Online
The Internet is an excellent resource for shopping for a home loan; however, there are several things you need to know about the rate quotes and Good Faith Estimates that you receive online. First of all, should you trust the Good Faith Estimate and Annual Percentage rate when shopping for mortgage refinancing?
The Annual Percentage Rate (APR) is supposed to give you an idea of the total cost of your home loan expressed as a percentage rate that you’ll pay every year for your home loan. The problem with APR is that while Truth in Lending laws require mortgage lenders to give you the APR there is no standard for how they calculate or what fees are included in the percentage. This effectively makes it impossible to get an apples-to-apples comparison of the fees you’ll pay from one lender to the next.
What about the Good Faith Estimate (GFE) you get from the top mortgage lenders? Understand that the GFE is simply an estimate given in “good faith” and is not binding at all. When it comes to mortgage refinancing fees the last word at the end of the day is on your HUD-1 Settlement Statement and the GFE is little more than a marketing tool used to promote overpriced home loans.
Get The Best Refinance Rates Without Junk Fees
If you want the lowest mortgage rates without paying unnecessary fees, instead of shopping for the top mortgage lenders it makes more sense to focus on finding the right person to arrange your next home loan. Refinancing with a good mortgage broker will not only get you today’s lowest refinance rates from the top mortgage lenders but will help you avoid paying junk fees.
How do you find a good mortgage broker? First you’ll need to understand how brokers are compensated for the work they do arranging your home loan. Typically brokers get paid by charging you a loan origination fee which is where most of your neighbors overpaid for their home loans. Brokers typically charge anywhere from one to three percent; however, paying one percent for your broker’s work is perfectly reasonable.
Don’t be afraid to haggle over fees when shopping for a broker to arrange your mortgage refinancing with today’s top mortgage lenders and don’t offer to pay more than one percent for loan origination.
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You can learn more about mortgage refinancing with the top mortgage lenders while avoiding unnecessary 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.
