How To Get Your Lowest Refinance Mortgage Rates

Are you considering taking out a new home loan with today’s low refinance mortgage rates? When deciding if it’s a good idea you’ll want consider the cost of taking out a new mortgage loan. Every new home loan has fees including settlement charges, points and possibly mortgage insurance depending on the program and your loan-to-value ratio. Here are several tips to help you decide if taking out a new home loan is worthwhile and how to get the lowest refinance mortgage rates if you decide to go forward.

Should You Take Advantage of Today’s Refinance Mortgage Rates?

The mortgage fees you pay closing on your new home loan make or break the deal you’re getting, especially when refinancing. If you’re not able to break-even recouping the out-of-pocket expenses from refinancing you’re losing money no matter how low your refinance mortgage rates.

The less you pay at closing the better…that’s why comparison shopping refinance mortgage rates and fees is so important. One of the most common home loan mistakes is focusing only on refinance mortgage rates at the expense of fees. Overpaying the loan origination fee or agreeing to pay discount points for a lower interest rate is a recipe for losing money.

Should I Refinance My Mortgage?

Before you start shopping for the best mortgage lenders you want to decide if refinancing is even worthwhile. You can do this by approximating your break-even point using a simple mortgage calculator like this one.

Simple Mortgage Calculator

Loan Amount: Years: Mortgage Rate:

Annual Taxes: Annual Insurance:

Monthly Payment =

The mortgage calculator gives you an idea of how much your payment will go down based on current refinance mortgage rates. Once you’ve got an idea of what the payment will be divide your total estimated closing costs by the amount you’re saving each month. This tells you approximately the number of months it’s going to recoup your out-of-pocket expenses from your monthly savings. If this time-frame for breaking even is acceptable for you than paying for a new home loan makes sense.

Remember that if you’re considering a cash-out refinance that you may be required to purchase mortgage insurance which can add hundreds of dollars to your payment. The same is true if your loan-to-value ratio is less than 80%. Mortgage insurance can quickly turn attractive refinance mortgage rates into a losing proposition.

How to Shop for the Lowest Mortgage Rates & Fees

Comparison shopping refinance mortgage rates and fees from different lenders can be a confusing and frustrating process. In addition to comparing mortgage rates from today’s best mortgage lenders you need to shop closing costs. The trick to comparison shopping is to only compare lender fees from identical mortgage programs. If you’re comparing fees from different programs across different lenders you’re not making an apples-to-apples comparison.

What mortgage fees can you expect to pay? One of the most important is the loan origination fee. This is paid to the person or company arranging your home loan. Many brokers will tell you that one percent is standard for the mortgage origination fee. I’ve reviewed community credit unions that charge as little as $400 for their loan origination fee which is one of the reasons comparison shopping is so important.

Other closing costs to consider include mortgage processing, underwriting fees, attorney fees, title insurance, recording fees and pro-rated taxes and insurance. Fortunately, the new Good Faith Estimate makes it easy to comparison shop mortgage lender fees across identical programs.

How to Use the Good Faith Estimate to Compare Mortgage Fees

The government recently revamped the Good Faith Estimate making it much more useful for refinance rate shoppers. First, when shopping refinance mortgage rates make sure the quotes you’re requesting do not include discount points. You’ll find that lenders like to quote refinance mortgage rates based on paying discount points because it makes their interest rates seem more attractive.

Agreeing to pay discount points used to make sense when home loans came with double digit interest rates in the 1980s. These days refinance mortgage rates are at historically low levels making points a waste of money. If you’re curious how paying this fee to the lender affects your payments there is a table on page three of your Good Faith Estimate; however, most homeowners do not benefit from paying points.

Remember, the less you pay closing on your new home loan, the more you’ll benefit from current refinance mortgage rates. Start with the loan origination fee fount on page two, box 1a. Next, look at any yield spread premium in box 2a. This is a credit generated by accepting higher than market refinance mortgage rates that is used to pay your origination fee and other closing costs. If you’re taking this lender credit you’re not getting the lowest interest rate possible and your monthly payments will be higher.

The next section on your Good Faith Estimate that you want to focus on is box b on page two. This includes lender specific fees, including third party fees that you can shop around for. You’ll find the mortgage fees vary from one lender to the next so don’t be afraid to haggle with loan officers over the fees you find in box b.

What to do if Lender’s Aren’t Quoting You Their Lowest Refinance Rates

If you find the quotes you’re getting are higher than what lenders are advertising the likely culprit assuming that your LTV ratio is better than 80% is your credit score.
Have you been to AnnualCreditReport.com this year to review your credit reports for errors? Mistakes in your credit reports are like a boat anchor for your credit score, keeping you from the lowest interest rates from today’s best mortgage companies.

AnnualCreditReport.com won’t give you a credit score unless you pay for one. CreditKarma.com is an excellent alternative to those fake free credit score sites that bait you into paying for their credit monitoring services.

If you find mistakes in your credit files you’ll need to dispute the errors with each credit bureau (Trans Union, Equifax, & Experian) and allow enough time for the correction to be reflected in your credit score.

Strategies for Refinance Mortgage Rate Shoppping

You already know that comparing refinance rates and fees across identical mortgage programs is the only way to make an apples-to-apples comparison of lender fees. It’s also important to make sure the quotes you’re requesting are accurate and don’t negatively affect your credit score.

When a mortgage lender runs your credit you get a hard inquiry on your credit report which lowers your credit score. Some people refuse to provide their Social Security Number when shopping for refinance mortgage rates because they think they’re protecting their credit score.

If you do this you’re getting the loan officer’s best guess on what refinance rate you’ll qualify. The only way to get an accurate Good Faith Estimate for comparison shopping fees is to give up your Social Security number. The trick is to limit all of your quotes to a 14-day period. If you’ll do this you’ll only get dinged for one hard lender inquiry on your credit report and will protect your credit score as much as possible.

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

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Smarter Home Loan Interest Rate Comparison Shopping

Comparing mortgage rates is easier today thanks to the standardized Good Faith Estimate courtesy of the Department of Housing and Urban Development. The new Good Faith Estimate outlines your closing costs simply making it easier to shop from today’s best mortgage lenders. Here’s how to use the new disclosure form to make the best home loan interest rate comparison.

Get a Better Home Loan Interest Rate Comparison

Finding the best mortgage rates with the lowest out-of-pocket fees can be confusing. Do you know the difference between processing fees and document fees? Do you know how Yield Spread Premium (yes it still exists) affects your loan origination fee?

The most common mortgage mistake your neighbors make with their home loan interest rate comparison is looking at rates and fees across different programs. The first thing you should do when shopping for a home loan is understand and choose a program. Once you’ve decide which program is best for you stick with it and don’t let a fast talking loan officer talk you into changing.

Understanding Your Good Faith Estimate

The problem in the past was that lenders cooked up different names for their fees to make home loan interest rate comparison shopping confusing. One would call it a processing fee the other an application fee. The new Good Faith Estimate standardizes lender fees and terms.

Your mortgage loan program and any “gotcha” fees like the prepayment penalty are clearly disclosed.

According to the government the new Good Faith Estimate saves you $700 just by eliminating the shady names lenders used to confuse homeowners.

Here are 4 steps to follow for the best home loan interest rate comparison shopping:

  1. Shop Smartly For Interest Rates & Fees

  2. It’s impossible to make an apples-to-apples comparison of interest rates and fees on your Good Faith Estimate if you’re comparing home loans across different programs. Once you’ve decided that a conventional 30-year fixed rate mortgage is right for you don’t let a shady loan officer confuse you by quoting rates and fees from a 7/1 ARM. If you confuse the issue by comparing across different programs you’ll overpay at closing every time.

  3. Shop With Accurate Mortgage Rate Quotes

  4. Many homeowners refuse to give their social security number when shopping because they’re afraid the quote will damage their credit. While it’s true that your credit score will take a hit by having a mortgage lender run your credit you can manage the impact by limiting inquires to a two week period.

    If you do this you’ll only get dinged once. Also, when requesting mortgage quotes during this two week period always provide your social security number to ensure you’re getting an accurate quote. If you don’t provide your SSN the best you can hope for is that lender’s advertised rate or worse yet someone’s guess.

  5. Use Your GFE’s Shopping Chart

  6. Page three of your Good Faith Estimate has a chart you can fill out to make a home loan interest rate comparison across different lenders. Once you fill out the chart at the bottom of page three you can compare loan characteristics and fees from up to four lenders. Be careful when using the shopping chart as some of the questions might tempt you to compare home loans across different programs which is a mistake.

  7. Avoid Focusing Only On Mortgage Rates

  8. Many homeowners get so caught up on chasing the lowest mortgage rates that they overlook fees. The fees you pay at closing make or break the deal you’re getting. If you focus only on mortgage rates at the expense of discount points and the loan origination fee you’re guaranteed to lose money.

    The fees you need to focus on are found on page two of your Good Faith Estimate. The loan origination fee and any Yield Spread Premium are found in section A box 1 and 2. Did someone mistakenly tell you Yield Spread Premium is illegal now? Look at box 2: “The credit or charge for the interest rate of X% is included in our origination charge. (See item 1 above.)”

    This is Yield Spread Premium and it’s perfectly legal. If you’re getting a credit towards your loan origination fee you might think that it’s less cash coming out of your pocket; however, you’re accepting a higher mortgage rate for the credit which means a higher payment.

    The loan origination fee in box 1 is important and can save you a significant amount at closing. Many brokers will tell you that one percent is standard but I’ve reviewed community credit unions that charge as little as $400 for loan origination. The less you pay the better the deal you’re getting on your next home loan.

Shopping smartly is the best strategy and using the new Good Faith Estimate’s home loan interest rate comparison table to compare fees can save you thousands of dollars at closing.

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

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Are 15 Year Mortgage Rates Always The Best Option?

If you’re in the market for mortgage refinancing you might have noticed lenders and programs pushing 15 year mortgage rates. There’s been a strong push for homeowners in the United States to pay off their home loans faster. Even the government is recommending shorter mortgage term lengths to get out of debt faster. Is it really in your best interest to refinance with 15 year mortgage rates? Here are the pros and cons of shortening your term length to help you make an informed decision for your next home loan.

15 Year Mortgage Rates For Underwater Homeowners

Another push for 15 year mortgage rates is for underwater homeowners with the government refinance program HARP 2.0. The reason for this is that shorter term-lengths like those offered with 15 year mortgage rates pay down your balance at a faster rate, thus building equity quickly and getting you right-side up.

15 year mortgage rates are a bit lower than 30 year fixed rates right now meaning the payment for most people will only be a few hundred dollars more. At first glance this sounds like a good idea; however, as the saying goes what’s good for Peter isn’t always good for Paul. If you’re paying $1350 on a 30-year fixed rate mortgage why not switch to a 15 year term length if the payment won’t go up by much? Historically low refinance rates make this possible and can save you a boatload of cash from mortgage interest.

If you’re currently paying mortgage insurance choosing 15 year mortgage rates will get you to the point where you can cancel your mortgage insurance more quickly with the side benefit of building ownership in your home.

Is There a Downside to 15 Year Mortgage Rates?

Because interest rates are so low right now you could make the argument that it’s not a bad time to carry debt, thus freeing up your cash for other things. It doesn’t take much to invest for a higher rate of return than what you’re paying in mortgage interest. The uncertainty hanging over our economy is still there; we’re not out of the woods with the housing market either. Even if you’ve got a respectful loan-to-value ratio now, who’s to say in a year or two that you won’t be underwater thanks to declining home values and a faltering economy?

If you qualify for mortgage refinancing you might consider refinancing for a lower payment to give yourself a little breathing room in your budget. (Especially if you’re paying on an Adjustable Rate Mortgage) Don’t get me wrong, equity is great but there’s no guarantee you’ll ever get it back when you sell your home. Paying that extra cash to pay down your mortgage could be wasted if you have to sell in a down market like the one we have now.

The point I’m making is not that 15-year mortgage rates are bad; simply that there’s more to consider with the big picture when refinancing your home. The fees that you pay for instance will make or break the deal that you’re getting. If you’re not able to break even recouping your out-of-pocket expenses from closing costs you’re going to be losing money no matter how low your refinance rates. One of the most common mortgage mistakes when refinancing is overpaying the loan origination fee or falling for unnecessary discount points. Remember, the less you pay at closing the more benefit you’ll get from today’s low refinance rates.

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You can learn more about paying less for your next home loan by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to get you started with today’s best mortgage lenders while avoiding unnecessary fees…

Nationwide Mortgage Rates

Nationwide Mortgage Rates are available for both purchase and refinance loans in fixed, adjustable and jumbo mortgage loans of varying term lengths. Should you trust nationwide mortgage rates for your next home loan and how do their fees and closing costs compare to the best mortgage lenders? Here is my unbiased review of Nationwide mortgage rates, services and fees to help you make an informed decision for your next home loan.

Nationwide Bank

Nationwide Bank offers purchase and refinance rates for both conforming and jumbo mortgage loans.

Should you trust Nationwide with your next home loan? Is Nationwide really on your side when it comes to fees and points?

Rating by Robert Regehr: 2.0 stars
starfull Nationwide Mortgage Ratesstarfull Nationwide Mortgage Rates

Nationwide Mortgage Profile

Purchase and refinance Mortgage Rates are offered through Nationwide Bank, part of the Nationwide Mutual Insurance Company. Their jingle of “Nationwide is on your side” has been driven into every household in America thanks to a lavish advertising budget.

According to the website they offer affordable rates, flexible home loan terms, and helpful mortgage choices. They claim to help first-time homebuyers and existing homeowners alike with purchasing and mortgage refinancing, offering help every step of the way.

Nationwide Bank Contact Information

Online:

www.nationwide.com

By Phone:

(877) 636-0598
(800) 243-0924
(800) 882-2822

By Mail:

Nationwide World Headquarters
One Nationwide Plaza
Columbus, OH 43215–2220

Nationwide Mortgage Rates Review

Is Nationwide really on your side when it comes to mortgage rates and fees? Remember, if you’re in the market for mortgage refinancing, the fees you pay make or break the deal you’re getting. Paying too much for the loan origination fee or unnecessary discount points can quickly turn those low refinance rates into a lousy deal.

How do their mortgage rates stack up against the top mortgage companies? Nationwide publishes purchase and refinance rates on the website. Mortgage rates are quoted for both conforming and jumbo mortgage loans with the Annual Percentage Rate and discount points.

The lowest purchase and refinance mortgage rates on the website have the highest out-of-pocket expenses thanks to discount points. Mortgage rates are at historically low levels and paying discount points is an unnecessary expense in nearly every situation.

The FAQ offers some insight into Nationwide’s mortgage fees including a $450 “commitment fee” to lock your mortgage rates. Rate lock fees are widely considered junk fees as it costs the lender nothing to lock an interest rate. The website also discloses a loan origination fee of $795 for a $150,000 home loan which works out to .5%. Most lenders charge a full percent for loan origination so despite the junk rate lock fee Nationwide’s loan origination fee is very competitive. The website discloses an additional $442 in “prepaid finance charges” in addition to any discount points.

Should you purchase or refinance with Nationwide Bank? While the fees were competitive I have reviewed community based credit unions with better deals. You can find the best deal for your next home loan by shopping from several lenders comparing mortgage rates AND closing costs like the origination fee while avoiding discount points.

You can learn more about shopping from today’s best mortgage companies while avoiding junk fees and points by checking out my free Underground Mortgage Videos.

How to Refinance With Today’s Lowest Mortgage Rates

Want to know how to refinance with the lowest mortgage rates without paying unnecessary lender fees? If you’re in the market for a new home loan you might be disappointed to find that the refinance mortgage rates you’re being quoted by lenders like Amerisave are higher than what’s being advertised on television. There are a several reasons why this could be happening; however, there are steps you can take to improve the quotes lenders offer you. Here are several tips on how to refinance with the lowest possible mortgage rates without paying one cent in unnecessary fees.

How to Refinance With Today’s Lowest Rates

Did you know that the refinance mortgage rates you see advertised on television are based on having a lofty credit score of 820 or better? If you have less than perfect credit the interest rates you’ll be quoted will be higher than what you’re seeing advertised. Here’s a chart to illustrate how your credit score affects the interest rates you’ll qualify for when mortgage refinancing and how much you’ll pay for financing for the duration of the loan.

credit mortgage rate How to Refinance With Todays Lowest Mortgage Rates

As you can see, the higher your credit score, the higher your refinance mortgage rates will be. Luckily, there are steps you can take to improve your credit score before applying for a new home loan, and you don’t have to be a finance guru to pull it off.

The first thing you’ll want to do before mortgage refinancing is take control of your credit. You don’t have to pay anything to get started; however, there are several paid tools that can make staying top of your credit easier. For example, I’m a member of USAA and they offer a low-cost credit monitoring service through Experian. I think I pay $12 a month for full access to all three credit reports (Equifax, Experian and Trans Union) as well as credit scores and monitoring from each. The service provides alerts when your credit reports are accessed or new information is added. Most credit Unions offer similar low-cost services. Bank of America and Wells Fargo have similar offerings; however, as always you can expect to pay more from a bank.

Your Credit Reports Are Free

Despite what those Free Credit Report dot websites tell you, all of your credit reports are available online for free without paying for some credit monitoring service. Several years ago Congress passed a law requiring all three credit bureaus to give you access to your credit file for free every year. The website you can access your credit reports on is AnnualCreditReport.com. They’ll still and try to sell you a credit score with your report; however, you don’t need to pay for this either as your lender will tell you your score. Once you have all three of your credit reports carefully review each one for mistakes or inaccurate information. If you find mistakes you’ll need to dispute the mistake with each credit bureau. Experian makes it easy to dispute mistakes online; however, Equifax and Trans Union still need you to write a letter.

Tips to Quickly Boost Your Credit Score

The most effective thing you can do to boost your credit score before mortgage refinancing is to pay down the balances on your credit cards. Don’t close accounts but try to carry a zero balance when possible. Also, avoid opening new accounts for at least 90 days before applying for a mortgage. Once you’re sure that you credit score isn’t holding you back we can get back to tips on how to refinance with today’s lowest mortgage rates.

Mortgage Rate Shopping Online

Shopping for refinance mortgage rates is a frustrating experience for many homeowners. Knowing how to refinance without paying junk fees is a common mortgage mistake overlooked by many homeowners. Qualifying for the lowest possible refinance rates at the expense of fees doesn’t automatically mean you’re getting a good deal. In fact, if you don’t recoup your out-of-pocket expenses from mortgage refinancing you’re actually losing money.

If you haven’t already answered the question “Should I Refinance,” now is probably as good a time as any. The easiest way to answer this question is to look at the benefit or refinancing as cost versus savings. Keep in mind that the average homeowner refinances every four years so you’ll need to recoup your out-of-pocket expenses long before to benefit from lower mortgage rates. You can calculate how long it’s going to take to break even on your closing costs by dividing your total out-of-pocket expenses including the mortgage origination fee by the amount you’ll be saving each month on your payments. This tells you the number of months it’s going to take to break even before benefiting from mortgage refinancing. If this time frame is acceptable for you then mortgage refinancing probably makes good sense in your situation.

Getting back to how to refinance without overpaying at closing; the best strategy for most is to enlist the help of a good broker. Finding the right mortgage broker eliminates the need for comparison shopping. Mortgage comparison shopping is very difficult to begin with as you can’t rely on the Good Faith Estimate to make an apples-to-apples comparison of fees from different lenders like Wells Fargo Refinance and Amerisave due to a lack of standards in the law protecting homeowners from predatory lending.

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You can learn more about finding the right broker to arrange your next home loan without overpaying at closing by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to get you started learning how to refinance without those pesky lender junk fees…