When homeowners refinance, nine times out of ten their ultimate goal is to save money. On the contrary, the lender’s goal is to make money. The sooner you understand this, the better prepared you will be to refinance and get the best deal. In other words, you are responsible for doing your homework to get the best rates. Being aware of why you want to refinance and your financial goals for doing so can greatly assist you in finding a good rate for your particular situation.
Keep in mind the getting the “best” deal is relative to many factors. A mortgage rate that is good for one homeowner can be wrong for another; it all depends on their particular finances and long-term goals. Keep in mind that low rates more than likely involve more closing costs than other mortgage rates.
The time seems right for refinancing, especially when you consider the fact that interest rates are low, the economy is slowly improving, and the government has developed plans to help homeowners. While these factors have indeed supported a sudden spike in refinancing, getting the best deal can still be quite a challenge now for many who own their home.
Here are some tips to make sure that you get the best refinancing deal:
- Do your homework. When you are educated about mortgage loans, you can have the knowledge to ask for a better deal. Don’t rely on your loan officer to get the best deal for you. You can possibly save thousands of dollars if you make the effort to do your homework. Trust is something you want to have with your lender, but don’t place all of your trust in them because they are ultimately looking to get paid at the end of the day.
- There is no such thing as no-cost refinancing. Think about it: Do you really think that mortgage companies and banks will offer money for free? The truth is that they are looking to make a buck just as you are looking to save.
- Realize that there are good loans and bad loans. Just like any other purchases, there are great loans, good loans, and awful ones as well. Educating yourself about the different types of loans according to your financial situation will ensure that you have the ability to differentiate between a good loan from a bad loan.
- Shop around. The last thing you want to do is work with a lender that has a low rating with the Better Business Bureau. Don’t simply get a loan from the first company that you encounter. You should research many different lenders such as banks, brokerage firms, and credit unions. The idea is to get an offer from each of them and then pit them against each other. This will ensure that you get the fairest deal.
The Home Loan Advisor is a tool that was built to provide homeowners with insight into opportunities available in the current market, without having to shuffle through all of the clutter on the Internet. Not only does the Home Loan Advisor analyze your property, current market conditions, local market comps, and other variables in our proprietary algorithm, but we match you with potential lenders who have products that may help you and provide you with a sense of stability.
Refinancing also means that you need to know the value of your home. You can get a free home valuation report from Neighborhood IQ to find out your home’s worth to help you decide if refinancing is a good option for you and your finances.