If you’re in the market for a mortgage refinance there’s no question that a mortgage broker can save you thousands of dollars. If your eyes glaze over when your broker starts shooting loan documents at you there are steps you can take to make sure that you’re not getting ripped off on your mortgage refi. Here are five questions you should ask prospective mortgage brokers to ensure that you’re not paying too much for that low mortgage refinance rate.
1. Are you a banker, mortgage broker, or both?
Banks are exempt from the Real Estate Settlement Procedures Act and the new rules banning Yield Spread Premium from your mortgage refinance rates. Sure, when a bank marks up your refinance rates for a profit it’s called Service Release Premium but the result is the same: less cash in your pocket at the end of the month. This is why I never recommend mortgage refinancing with your bank.
2. Will you explain and negotiate the charges on my Good Faith Estimate?
One of the most common mortgage mistakes is failing to negotiate or even question the fees on your Good Faith Estimate, including the loan origination fee. There are a number of lender junk fees in this document that you’ll want to avoid paying; chose the right mortgage broker and you’ll be able to avoid these unnecessary fees.
3. How long will it take to close on my mortgage refinance? Is there a rate lock fee?
There isn’t a lender in the business that requires a fee for locking in your mortgage refinance rate. If your Good Faith Estimate includes anything that resembles a rate lock fee you know that you’re dealing with a dishonest mortgage broker. As for closing timeframes you want to have a realistic expectation of when your home loan will be complete.
4. Are there fees for the mortgage refinance application and approval process?
Lender fees like this are fully negotiable and while you can reasonably expect to pay for a credit check any other application fees should be minimal or can be negotiated away. Paying lender junk fees on your mortgage refinance will lengthen the amount of time it takes to recoup your expenses before benefiting from your lower payment amount.
5. How long have you been originating mortgage refinance loans?
You want to deal with an experienced mortgage broker with at least ten years experience to benefit form a professional that knows the tricks of the trade to get you the best refinance rates without paying unnecessary fees.
You can learn more about finding the right broker to get you the best mortgage refinance rates without paying unnecessary lender fees 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.
