Who Will Refinance My Mortgage?

Now that home refinance rates are going up you might be wondering if you missed the boat on lowering your mortgage payment. While it’s true that rates have gone up over the last two weeks it’s not too late to get a great deal on your next home loan. Here are several tips before you refi to help find a lender who will “refinance my mortgage” without paying unnecessary fees or markup.

Who Are The Best Lenders to Refinance My Mortgage?

Everyone wants low home refinance rates. Some people focus only on getting the lowest mortgage rates at the expense of fees. If you do this when trying to find the best company to refinance my mortgage it could be difficult, even impossible to break even recouping closing costs.

If you never break even because you paid unnecessary discount points or overpaid the loan origination fee, you’re going to be losing money no matter how low your interest rate.

How to Calculate Your Break Even Point

Knowing how long it’s going to take you to break even is the first step in answering the question “Should I Refinance my mortgage?” You can approximate your break-even point using a simple mortgage calculator like this one.

Simple Mortgage Calculator

Loan Amount: Years: Interest Rate:

Annual Taxes: Annual Insurance:

Monthly Payment =

Plug in the loan details from your Good Faith Estimate and click “Calculate Now.” The difference between your old payment and the new one is your monthly savings. Dividing the total amount of your closing costs found at the bottom of page 2 of your Good Faith Estimate will tell you the number of months it’s going to take to break even.

This calculation is only an approximation because it doesn’t factor in taxes or changes in your home loan’s term length. As long as you’re keeping the same term length or going shorter the approximation is good enough to answer the question “Should I refinance my mortgage.”

Who Will Refinance My Mortgage Loan?

Before you start shopping for today’s best mortgage lenders you should invest some time checking your credit reports for mistakes. If you’re already shopping for the best mortgage lenders and find the home refinance quotes you’re getting are coming in higher than what lenders are advertising the likely culprit is your credit score.

If you haven’t done so already head over to the website AnnualCreditReport.com. The government requires the three credit bureaus (Trans Union, Equifax, & Experian) to give you free access to your credit reports once per year and AnnualCreditReport.com is how they comply with the law. Credit reports are free but you’ll pay a fee if you want to see your credit scores.

If you don’t want to pay for a credit score CreditKarma.com will give you free access to your Trans Union credit score with no strings attached. Keep in mind that you have three credit scores, one for each credit bureau. Mortgage lenders look at your middle credit score so if your scores are 680, 710 and 720 your middle score is 710.

Bonus Tip: The fastest way to boost your credit score is to pay down the balances on your credit cards below 30% of your credit limit.

How to Shop for the Best Mortgage Lenders

Remember that focusing only on home refinance rates gets you in trouble. Page two of the new Good Faith Estimate is the best mortgage fee comparison shopping tool available. Start with the loan origination fee which is item one in section A.

Do you know how much is reasonable for the mortgage loan origination fee? Many loan officers will tell you that one percent is standard; however, I’ve found community credit unions who will refinance my mortgage for as little as $400 for mortgage origination.

The less you pay closing on your home refinance the faster you’ll break even and the more you’ll benefit from low mortgage rates.

What About No Fee Refinance Loans?

You’ll see lenders like Wells Fargo advertising “No Fee” home refinance loans. Your lender might even offer this as an option at closing. No fee mortgage loans don’t really exist; every home loan has fees that have to be paid at closing. What’s different about no fee home refinance loans is that your lender is paying the settlement fees in exchange for you taking higher mortgage rates.

Is this a good idea? Taking a higher mortgage rate by a quarter or half a point means that your monthly payments are going to be higher for the entire time you’re paying the loan. (The average homeowner refinances every 4-5 years) You’ll reach a point when you break even on the fees your lender paid and after that you’re losing money.

If you don’t have the cash to pay your closing costs consider rolling the fees into your loan balance instead of taking higher mortgage rates.

You’ll find the credit for accepting higher home refinance rates on page two, item two of section A of your Good Faith Estimate. (This credit is known as mortgage Yield Spread Premium)

Other Mortgage Lender Fees to Consider

Section B of page two lists lender specific fees and other closing costs you can shop around for. Comparing page two from a variety of credit unions, banks and direct mortgage lenders will give you an idea of what’s reasonable.

Some of the best deals I’ve found when shopping for a lender who will refinance my mortgage have come from small community credit unions. Don’t let the credit union membership requirement discourage you from shopping credit unions, most will let you join when you’re doing a home refinance.

Protect Your Credit Score When Comparing Home Refinance Rates

Some homeowners refuse to give their Social Security number when shopping home refinance rates because they think they’re protecting their credit score. If you do this you’re relying on a loan officer’s best guess of what interest rates and fees you’ll qualify. This is almost always a waste of your time.

While it’s true that having a mortgage lender run your credit lowers your credit score there’s no way around getting dinged for a hard inquiry. The trick is to limit all of your home refinance rate quotes to a two week (14 day) period. When you do this you’ll only get dinged for one mortgage lender’s hard inquiry on your credit report.

Click Here For More Details…

You can learn more about getting the lowest home refinance rates from today’s best mortgage lenders by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you get the lowest home refinance rates from today’s best mortgage companies…”

4 Steps To Getting The Lowest Refinance Rates

Are you shopping for refinance rates from today’s best mortgage lenders and are frustrated to find your quotes are higher than what’s being advertised? There’s more to getting the best deal on your next home loan than just refinance rates; fees make or break the deal you’re getting. Here are several of my best tips to help you get the lowest refinance rates without paying unnecessary fees or discount points.

Refinance Rates Fluctuate Daily, Hourly

Mortgage refinance rates are a function of the market. On the plus side they can’t be manipulated, the downside is that timing the markets is next to impossible. There are however steps you can take to make sure you’re getting the lowest refinance rates and lender available.

4 steps to the lowest refinance rates

  1. Boost Your Credit Score
  2. If you haven’t checked your credit reports in a while your first stop before refinancing needs to be the government mandated website AnnualCreditReport.com. Carefully review all three of your credit reports for mistakes. If you find errors use the online dispute found on the Equifax, Experian and TransUnion websites.

    Once you’re certain that your credit files are correct you can give your score a shot in the arm by paying down the balances on your credit cards below 30% of your limit. Avoid applying for ANY kind of credit while shopping for refinance rates.

  3. Shop For The Best Mortgage Lenders
  4. Some homeowners would rather have a root canal than shop for mortgage refinance rates. Some choose to refinance with their bank just as a matter of convenience. Shopping around will not only help you nab the lowest refinance rates but allows you to pay less at closing.

  5. Compare Refinance Rates & Fees
  6. Don’t rely on the Annual Percentage rate when choosing a mortgage lender. APR is manipulated and the home loan with the lowest APR usually comes with the highest out-of-pocket fees. Use section 800 from your Good Faith Estimate to compare things like loan origination fees across different lenders.

    Don’t be afraid to question any of the fees your lender charges and keep an eye out for junk fees. Lenders cook up all kinds of clever names for many of their fees just to confuse you; keep an eye out for anything resembling administrative, processing, rate lock, or courier fees. These are unnecessary fees that you can negotiate to pay less or not at all.

    Before you do any refinance rate shopping you need to choose a mortgage program and stick with it. Do you need a low payment that never changes? If so, 30-year fixed refinance rates are for you. Think you’ll be moving within five years or so and want the lowest possible payment? Consider a 5/1 Adjustable Rate Mortgage. The point is you need to decide which mortgage program is right for you before doing anything else.

    One of the most common mortgage mistakes is comparing loan offers from different programs. Don’t let a fast talking broker confuse you by quoting refinance rates on a 5/1 ARM when you’ve decided 30-year fixed is right for you.

  7. Lock Your Refinance Rates Smartly
  8. Your mortgage rate lock is the lender’s promise to give you a specific refinance rate for a length of time needed to close. Keep in mind that many lenders are taking 60+ days to close and plan accordingly. If your rate lock expires don’t expect your lender to honor you refinance rates. (there are a few out there that will)

    The duration of your rate lock also affects your refinance rates. The longer your rate lock the higher the impact on your refinance rates.

    How to win the mortgage rate lock game

    Winning with your refinance rate lock isn’t hard. What you need to know is that rate locks come in 15 day increments. Your choices range from 15 days, 30 days, 45 days, 60 days, and onwards and upwards.

    Remember the longer your lock period the higher your refinance rates and payments will be. You need to have a conversation with your loan originator about the time it’s taking to close when refinancing and factor that into your decision when choosing from today’s best mortgage lenders.

    Choosing the lender with the shortest closing time could win you as much as ¼ point on your refinance rates. Locking smartly could save you $20 a month on a $200,000 home loan.

Click Here For More Details…

You can learn more about getting the best deal on your next home loan without overpaying by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you get the best refinance rates without paying too much at closing…

Don’t Get Hoodwinked By The No Cost Refinance Myth

Are no cost Refinance offers a good deal or just another way for mortgage lenders to hoodwink you? I know mortgage refinance fees can be frustrating and the temptation to roll them into the balance or “let someone else pay” can be overwhelming. Here’s the bottom line on the no cost refinance myth which could save you from an expensive mistake.

Lower Refinance Rates vs. Higher Mortgage Fees

Have you heard the saying “There’s no such thing as a free lunch?” Unfortunately there’s no such thing as no cost refinancing. These no fee refinance loans are just clever marketing designed to sell you an overpriced mortgage loan.

Every mortgage loan comes with fees; it doesn’t matter if you’re purchasing or refinancing. If your lender requires an appraisal the person doing the work needs to be paid. If an attorney is involved there will be attorney fees. Brokers and direct lenders all charge loan origination fees. If you don’t have the cash to pay these fees there are options available to you; however, tread carefully if you want to avoid an expensive mistake.

In the real world refinancing your mortgage is going to cost money, so how is it that lenders advertise no fee refinance offers? Like the leprechaun’s pot at the end of the rainbow no cost refinance loans simply don’t exist.

What are no cost refinance offers really?

What mortgage lenders are really offering with the no cost refinance is a mortgage with no out-of-pocket costs. This is accomplished either by rolling all of your closing costs into the mortgage balance, (meaning you’ll owe more after refinancing) or by jacking up your refinance rates in exchange for the lender paying your fees.

Are you okay with rolling an additional $5,000 into your mortgage balance to lower your payment by a hundred dollars a month? For some this is not a bad option. Just to be clear this is not a no fee refinance. Your mortgage balance went up meaning you’re paying more over time for the financing.

You get an above market refinance rate

The next option for your no cost refinance loan is taking a higher than market refinance rate to cover your closing costs. Mortgage lenders pay cash for closing home loans with higher than market interest rates and this cash can be used to pay your loan origination fee and other closing costs.

This is the so-called lender credit you’ll find accompanying many no fee refinance offers. If you take higher refinance rates in exchange for having your out-of-pocket fees paid, you’ve protected your mortgage balance from going up; however, your monthly payments will be higher. This option has the same closing costs as before, the difference is that someone else is paying them.

There are situations where this can be a great strategy for refinancing, especially if you’re not planning on staying in your home long. The problem is that your mortgage lender wasn’t born yesterday and most include some form of prepayment penalty to prevent you from refinancing again in the short-term.

Which is the better choice for refinancing your home? The answer depends on how long you plan on keeping your home and whether or not you have cash on hand to pay your closing cost. If your goal is to find the lowest refinance rates possible from today’s best mortgage lenders you’ll want to pay your out of pocket expenses yourself.

Yet another problem with no cost refinance deals

Are you thinking to yourself as you read this “the economy is crap… who has five grand to fork over to a mortgage lender?” If so, one common mortgage mistake is to write off your fees with one of these no fee refinance offers and not pay attention to what the lender is actually charging you.

Here’s the problem with this “ignorance is bliss” approach to no cost refinancing.

If you’re opting to roll your closing costs into your loan balance and aren’t paying attention that $5,000 in closing costs could quickly balloon up to $6,000, $8,000 or more. Section 800 of your Good Faith Estimate is filled with junk fees and discount points you can negotiate to pay less simply by asking. The more you pay closing on this type of no cost deal the higher your mortgage balance is going to be when all is said and done.

If you don’t want your mortgage balance going up and opt for higher than market refinance rates it’s going to be even harder to make sure you’re getting a good deal. The problem is that your refinance rates depend on how much you’re paying or overpaying at closing. Let’s stay that you negotiate your fees in this case down to $5,000. The lender pays one percent of your home loan for every .25 percent increase on your refinance rates.

Suppose you qualify for 4% with a zero point “no fee” refinance offer. You need $250,000 to refinance and in order to cover the $5,000 in closing costs you’ll need 2% of that mortgage balance which means higher refinance rates by .5%. (remember the cash from 1% of your balance costs you .25%)

What does this extra half percent do to your payments? Keep in mind that the more garbage-stuffed your fees the higher your refinance rates will need be to cover the closing costs.

If you had paid the closing costs yourself and walked away with 4% your monthly payment will be $1,193. Since you opted for the “no fee” refinance loan and your interest rate is 4.5% your payment will be $1,267. That’s a difference of $74 a month or $888 a year.

Let me put this in perspective, in six short years you’ll have paid $5,328 for $5,000 worth of closing costs. After ten years you’ll have paid $8,880 for that $5,000. You get the point.

Remember if you’re thinking “I’ll just refinance again and come out ahead” that your lender wasn’t born yesterday and will surely have a prepayment penalty buried in the fine print.

How to pay less refinancing your home

It doesn’t matter if you opt for a no fee refinance offer or pay your closing costs yourself, the less you pay at closing the better off you are.

This is where shopping for the lowest refinance rates and fees can save you a boatload.

I know, shopping for the best mortgage lenders is a pain in your keester but so are taxes and there’s no getting around that. Do you know which fees you’re stuck paying, which can be negotiated, and which are pure garbage?

I can show you for the small investment of less than an hour of your time.

Click Here For More Details…

You can learn more about getting the best deal on your next home loan while avoiding lender junk fees and points by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you get the best refinance rates without overpaying…

Keep Your Sanity & Protect Your Credit Shopping For Today’s Best Mortgage Lenders

Are you shopping for the lowest refinance rates from today’s best mortgage lenders and are concerned that too many credit inquiries could damage your credit score? According to the credit bureaus there’s a way to shop smartly for refinance rates without harming your credit score. Here are several tips to help you get the lowest refinance rates from today’s best mortgage lenders while keeping your sanity intact.

Refinance Rate Shopping & Your Credit Score

If you’re considering refinance your mortgage this year and haven’t checked your credit you’re leaving a lot of cash on the table. The only way to get the lowest refinance rates from today’s best mortgage lenders is to have the highest credit score you can manage.

If you’re already shopping for refinance rates and you’re finding the quotes you’re getting are higher than what lenders are advertising the likely culprit is your credit score.

The first thing you should do is visit the government mandated website AnnualCreditReport.com and check your three credit reports for errors. If you find mistakes each credit bureau has an online process for disputing errors and you’ll need to do this before allowing any mortgage lender to pull your credit.

How credit inquires damage your credit score

When a mortgage lender runs your credit they’re making a formal inquiry that stays with you. These inquiries can be found in the scoring category under “new credit.” This scoring category represents 10% of your overall credit score.

Applying for credit cards and loans can damage your credit score because the inquiry is a request to increase your overall debt. The more debt you have the more risk you are for defaulting on your loans. That’s why your credit score goes down when you apply for new credit, including mortgage loans.

How to manage multiple mortgage lender credit inquires

The most important thing you can do when shopping for refinance rates is put any major purchases on hold prior to refinancing. Avoid applying for credit cards or store charge accounts.

The credit bureaus categorize your inquires and some damage your credit score more than others. There are four categories of inquiries that you need to manage.

  1. Credit Inquires for Mortgage Loans
  2. Credit Inquires for Car Loans
  3. Credit Inquires for Credit Cards
  4. Credit Inquires for Store Charge or Personal Loans

Each of these four inquiry types is weighted differently when it comes to your credit score. Store charge cards for instance have the most negative impact of the four. Next on the bad list are your credit card applications. These have more of a negative impact on your credit score than home and car loans because the balances increase over time.

Never apply for credit cards at the same time you’re shopping for refinance mortgage rates.

How mortgage lender inquires affect your score

Depending on what your credit score is five points might seem like a little or a lot but that’s how much of a hit you’ll take when shopping for refinance rates. Here’s what you need to know to protect your credit.

The credit scoring model used by FICO (Fair, Isaac and Company) ranges from 300 to 850. The largest part of your credit score, 65% to be exact, is based on your payment history and how much you’re using.

The next 15 percent of your credit score comes from your overall credit history. This means the amount of time that you’ve been using credit, the duration of your history. The longer you’ve been using credit responsibly, the higher your score.

The following 10 percent comes from the types of credit you use. This is where car loans and home loans are a positive factor and store charge accounts are viewed as a negative. The last ten percent is the “new credit” category where inquiries are a factor.

Ten percent might not sound like much but that ten percent is 85 points, which could be hundreds of dollars in your mortgage payment. This is why managing your credit inquires is an important part of refinance rate shopping form today’s best mortgage lenders.

Having your mortgage lender run your credit is estimated by financial advisors to cost you 5 points on your credit score. You can limit the impact of shopping from multiple mortgage lenders by managing these inquires correctly.

How to shop today’s best mortgage lenders without dinging your credit

Shopping for the lowest refinance rates means you’re going to have to give up your social security number to get accurate quotes. There’s no way around taking a hit; however, you can minimize the impact by following these refinance rate shopping tips.

You won’t get penalized for refinance rate shopping if you limit credit inquires to a 14-day time period.

As long as your mortgage credit inquires fall into this time period you’ll only get hit for one inquiry. You can shop from as many mortgage lenders as you like as long as you do it within that 2 week period.

During this two week period make sure you’re providing a social security number to get accurate refinance rate quotes. You might be hesitant to provide your ssn to potential lenders; however, if you don’t the quotes you’re getting are either advertised rates or someone’s guess.

Correctly managing your credit score could mean as much as a full percent on your refinance rates which translates to hundreds of dollars on your payments, possibly even avoiding a denial.

Click Here For More Details…

You can learn more about getting the most from today’s best mortgage lenders by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you get the best refinance rates without overpaying…

5 Mortgage Mistakes Even Smart People Make

If you’re thinking about refinancing your home you’re probably already shopping for the best mortgage lenders. Shopping for refinance rates can be confusing and choosing poorly could cost you. Common mortgage mistakes like comparing quotes from different programs are currently costing your neighbors thousands of dollars. Here are a few tips to help you avoid the hazards when shopping for the lowest refinance rates from today’s best mortgage lenders.

Common Mortgage Mistakes You Want to Avoid

  1. Fixating on the lowest refinance rates
  2. Getting the lowest refinance rates doesn’t automatically mean you’re getting a good deal. Especially if the offer is loaded with discount points and junk fees. Do you think choosing a mortgage based on the Annual Percentage Rate is a smart move? Mortgage lenders like to brag about their low APR refinance offers; however, the mortgage with the lowest Annual Percentage Rate usually comes with the highest closing costs and junk fees.

    Sure, you can buy down your refinance rates but if you’re not able to recoup your closing costs you’re losing money no matter how great your interest rate.

  3. Comparing refinance rates & fees across different programs
  4. Pick a mortgage program and stick with it. Don’t let a fast talking mortgage broker muddy the waters quoting refinance rates on a 5/1 ARM when you want 30-year fixed. It’s impossible to make an apples-to-apples comparison of lender fees unless you’re comparing offers from the same program. If you want a 15-year fixed mortgage then you should only be comparing fees from section 800 of the Good Faith Estimate from quotes on 15-year fixed rate mortgages.

  5. Not comparing closing costs correctly
  6. Do you know which of your closing costs are negotiable? Can you spot a junk fee at a 100 yards?

    You already know not to compare fees across different mortgage programs but did you know there are fees you can negotiate to pay less? When comparing refinance offers from today’s best mortgage lenders pay close attention to section 800 of your Good Faith Estimate.

    First, make sure you’re comparing zero point quotes for your mortgage program. Next, separate the fees paid to third parties like attorneys or the title company. These fees should be pretty much the same across different lenders and generally cannot be negotiated. Next, look for junk fees like processing, rate lock, administrative and courier fees. These you can call out and question to avoid paying as a condition of your business. Finally, look at the loan origination fee.

    The mortgage origination fee is paid to the broker or lender arranging your home loan. One percent is common; however, I’ve reviewed credit unions that charge as little as $400 for loan origination. Remember, the less you pay closing on your next home loan the more benefit you’ll get from lower refinance rates.

  7. Choose a mortgage lender based on Annual Percentage Rate
  8. Annual Percentage Rate is the most manipulated marketing tool in your lender’s arsenal. Spend any amount of time shopping refinance offers from today’s best mortgage lenders and you’ll find they quote based on the lowest APR first.

    This is because the lowest APR home loans come with the highest closing costs. The reason this happens is mortgage lenders manipulate their APRs with discount points to make them appear to be the best deal. If you choose the loan with the lowest APR you will have the highest closing costs.

    Always compare refinance rates and fees with zero point offers from the same program across different mortgage lenders. Mortgage refinance rates are still at historically low levers so the only thing paying points does is separate you from your cash.

  9. Neglecting to shop around from the best mortgage lenders
  10. Many of your neighbors simply refinance with their current lender or bank because it’s convenient. Your home loan is the largest financial commitment most people ever make, isn’t it worth spending a few hours to get a better deal?

    Refinance rate shopping isn’t hard and if you follow the tips outlined in this article you’re on track to get a better deal than most of your neighbors. Some of the best deals I’ve found have come from small, community-based credit unions so don’t assume the Wells Fargos and Bank of Americas of the world have the best deals. Pay attention to section 800 and never choose a mortgage based on the Annual Percentage Rate.

Click Here For More Details…

You can learn more about getting the best deal on your next home loan without paying junk fees by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you get the best refinance rates without paying lender junk fees or discount points…