If you’re shopping for the lowest refinance mortgage rates you might be disappointed to find the quotes you’re getting from companies like Amerisave are much higher than what lenders are advertising. Mortgage lenders use a bait-n-switch trick when advertising refinance mortgage rates; advertised rates are frequently based on a credit score of 780 or better. If your credit score is less than perfect your refinance mortgage rates will come in much higher; however, there are steps you can take to improve your quotes and save a lot of money in the process. Here are several tips to help you get better refinance mortgage rates for your next home loan without paying unnecessary fees or discount points.
Beware Deceptive Lender Tricks
Mortgage lenders manipulate their advertised refinance mortgage rates by using lofty credit scores or hiding discount points in the fine print.
If your credit score is lower they’ll still give you those low refinance mortgage rates, you’re just going to have to pay through the nose to qualify.
Lenders will give you lower rates if you pay discount points up front…one point is one percent of your home loan amount paid at closing and typically lowers your refinance mortgage rates by .25 percent per point.
While it’s true that mortgage interest rates are near historically low levels you shouldn’t have to pay a fee to get them. Because interest rates are at such low levels lenders are doing everything they can to boost profit at your expense with junk fees and unnecessary discount points. Mortgage brokers are also guilty of fleecing your neighbors by overcharging their origination fee. The good news is that you don’t have to be a personal finance guru to avoid overpaying and benefit from today’s lowest refinance mortgage rates. You just have to find the right person to arrange your next home loan.
How to Get Better Refinance Mortgage Rates
Before you start shopping for a new home loan, start by checking your credit reports for mistakes and outdated information. Mistakes are very common and drag your credit score down like a boat anchor; you can check all three reports for free every year by visiting the website AnnualCreditReport.com.
If you find mistakes you’ll need to dispute the incorrect information and allow enough time for the correction to be reflected in your FICO Score.
Other steps you can take to make sure your credit score is as high as possible include paying down the balances on your credit cards and avoid applying for new accounts for at least 90 days before shopping for refinance mortgage rates. It goes without saying; however, make sure you’re paying all of your bills on time as it seems to take late payments forever to drop off your history. Once you’ve cleaned up your credit reports it’s a good idea to keep an eye on them throughout the year. If you’re a member of a credit union you may be able to take advantage of low-cost credit monitoring services that will do this for you.
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You can learn more about getting today’s best refinance mortgage rates without paying unnecessary discount points or lender junk fees by checking out my free Underground Mortgage Videos.
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Finding the best mortgage brokers for your next refi is a good strategy for saving thousands of dollars; however, unnecessary points and fees can quickly turn any mortgage refinance into a costly mistake. Recent government changes to the rules regulating loan originator compensation make it easier for homeowners to spot unnecessary markup and junk fees; however many homeowner make common mortgage mistakes that still result in overpaying. Here is some of my best advice on refinancing your home to help you avoid costly mortgage mistakes on your next home refinance.
Finding The Best Mortgage Brokers
First of all, should you bother with the best mortgage brokers or can working with your bank help you avoiding refinance fees? If not your bank, how about refinancing with a giant company like Amerisave Mortgage? Banks and large companies make the process fast and convenient; however, they’re not always the cheapest option and in the case of big companies like Wells Fargo Mortgage may not have a reputation for treating their customers (you) well.
The problem with bank refinance rates is that thanks to a loophole in the Real Estate Settlement Procedures Act your bank is not required to show any of their markup or profit margin on your home loan. Banks don’t have to play by the same rules as other lenders because the banking lobby spent millions of dollars changing the rules so the bank doesn’t have to play fair. All the bank is required to give you is an Annual Percentage Rate based on a Good Faith Estimate created by the bank’s marketing department that ultimately isn’t grounded in reality.
Beware Bank Refinance Rates & Fees
Why would you ever considering trusting something as important as your home loan to a lender that doesn’t have to play by the rules? This is why I never recommend banks when it comes to any mortgage refinance.
How can you go about finding the best mortgage brokers? It’s true that the loan originator acts as a intermediary between you and the best mortgage companies; however, the best mortgage brokers have access to refinance rates and loan offers not available to the public. Finding the best mortgage brokers is a sure bet for avoiding unnecessary refinance fees.
Mortgage Settlement Refinancing Fees
Common mortgage mistakes made by many homeowners include neglecting to negotiate settlement fees. Did you know that your closing costs are negotiable? Lenders set their own fees, which is why you see such a range of closing costs on your Good Faith Estimates. Refinancing with the best-rated mortgage companies doesn’t guarantee you’ll avoid unnecessary fees; you really need to find the right person to arrange your next home loan for that.
How do find the best mortgage brokers for your refi? Start by looking for self-employed professional working in your area. Small, self-employed loan originators don’t have the same overhead as large companies and will be much more likely to negotiate the kind of deal you’re looking for with your mortgage refinance. Offer to pay a flat origination fee of one percent and you’ll be on your way to refinancing without unnecessary points or fees.
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If you’re shopping for the a new home loan and are wondering why you’re not getting quoted the best refinance rates that your neighbors are bragging about, you might want to turn your attention to your credit score. While it’s true that today’s best refinance rates have solidly dipped below five percent your rate could be much higher if you have less than stellar credit. Here are several of my best tips before you refi to help you get the lowest refinance rates.
Mortgage Refinance Rates Vary by Homeowner
Getting the best refinance rates in today’s market mainly comes down to your credit score. Mortgage lenders charge homeowners with lower credit scores higher interest rates, which will end up costing them thousands of dollars more than their neighbors with better credit scores.
Here’s an illustration from Washington Post showing how your credit score impacts your monthly payment and the total cost of your home. This example uses a home loan amount of $200,000 at various credit scores ranging from 620 to 850.
As you can see having a credit score of 620 will cost you $52,171 more than your neighbor is paying for the same home loan with a credit score of 850. Don’t worry, if your credit score isn’t where you’d like it there are steps you can take to make sure you’re getting today’s best refinance rates.
Where to start improving your credit score? Visit AnnualCreditReport.com and download all three copies of your credit reports. Congress passed a law several years ago requiring the credit bureaus to give you a free copy of your credit report once per year and this is the website to get your free credit reports. The site will try to sell you a credit score; however, you don’t need to buy your credit score because your broker will give it to you when you apply for a mortgage refinance loan.
Once you’ve printed out your credit reports you’ll want to carefully review all three for errors. If you find mistakes in your credit reports each of three credit bureaus has a procedure for disputing errors. Cleaning up errors in your credit reports is going to get you the most bang for your buck when it comes to improving your credit score; however, if you don’t find mistakes there are other things you can do.
How to Get Today’s Best Refinance Rates
Maxing out your credit cards also has a negative impact on your mortgage refi. Paying down your balances as much as possible before your mortgage refinance application will help boost your credit score ensuring that number isn’t holding you back from today’s best refinance rates.
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You can learn more about getting the lowest refinance rates possible without paying lender junk fees by checking out my free Underground Mortgage Refinancing Videos.
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Locking in your mortgage refinance rate is a gamble that could save or cost you money. Knowing when to lock or when to float your mortgage rate can be a difficult decision. Here’s an article by Dan Green at TheMortgageReports.com with some insight on when locking your mortgage refinance rates is a good idea:
When it comes to shopping for mortgage rates, to paraphrase Doris Day, que sera, sera; whatever will be with mortgage rates will be. Rates are a function of Wall Street. They’re beyond our control. However, there are ways to make sure you’re getting the lowest rate possible.
Getting the lowest refinance rates in today’s economy isn’t difficult; however, getting a good deal on your mortgage refi depends on the fees you pay at closing. Overpaying the loan origination fee and other lender fees are common mortgage mistakes your neighbors make and can cost you thousands of dollars.
You can learn more about avoiding unnecessary fees and markup when shopping for the best refinance companies by checking out my free Underground Mortgage Refinancing Videos.
Are you looking to compare mortgage refinance rates hoping to get the best deal for your next home loan? You’re probably wanting to make an apples-to-apples comparison of the various mortgage refi offers hoping to get the lowest refinance rates without paying junk fees. You might be attempting to compare mortgage refinance rates using a handful of Good Faith Estimates only to find there are no similarities on these documents from one lender to the next.
Compare Mortgage Refinance Rates
The problem with using Good Faith Estimates to compare mortgage refinance rates is that there are no standards for lenders to follow when it comes to preparing Good Faith Estimates. They’re required by law to give you one, they’re just not required to be honest or give you everything that should be on an estimate given in “good faith.” In fact, the Good Faith Estimate you get to compare mortgage refinance rates is little more than a marketing tool used by lenders to sell overpriced home loans.
So how can you make sure you don’t get taken to the cleaners on your next refi? It’s no secret that interest rates are at near historical lows so it’s not hard to get the best refinance rates in almost fifty years. The trick is to reduce your expenses, as that is where the most common mortgage mistakes are made.
Your Closing Costs Matter
Most homeowners don’t know that closing costs vary from one lender to the next and all the fees you pay are negotiable. The reason the fees you pay are more important than it is to compare mortgage refinance rates is that you’ll have to recoup these expenses before gaining any benefit from your lower monthly payment, assuming that lower payments is your goal when refinancing.
Rather than spinning your wheels trying to compare mortgage refinance rates to find the best lender it makes more sense to find the best person to arrange your mortgage refi. This may seem counter intuitive; however, finding a the right broker can get you access to wholesale mortgage rates without paying unnecessary fees or markup.
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You can learn more about finding the right person to arrange your mortgage refi without paying lender junk fees by checking out my free Underground Mortgage Videos.
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