Thinking of Refinancing Your Home? You may be able to save some money!
Today's mortgage rates are very low varying from 2.75% to 4.5 % depending on the mortgage length of time(15, 20 or 30 years) or whether it is a fixed or adjustable mortgage loan. So if your mortgage today is 5% or higher, you may able to save some money , reduced your monthly payment or get some cash back on the equity of your home. But before you decide to refinance, do your homework first. Talk to at least four mortgage lenders and at least three major banks and compare. In my case I did my home work 4 weeks ago and today I have decided to apply officially from a major bank where I also have my checking account. I did also talked to another major bank where I have my money market account. In addition, I talked to another major bank where I also have a savings account.
I have also talked to five mortgage lenders and they are very persuasive. Hold on your ground until you finished your homework.
My first action was to talk to my current mortgage servicing lender. The best offer they can give me for a 20 years conventional fixed loan was 4.5% with zero closing cost or 3.99% with about $3,200 closing cost. I bargained for 4.0% with zero closing cost and they said no deal. So I started talking to the other lenders.
My next action was to talk to the biggest mortgage lender advertising its rates in TV. They are offering me a similar deal, but I did not like the mortgage specialist demeanor while we were talking. The mortgage lender is offering me 3.75% with about $4000 closing costs.
I then talked to three other major banks where I have my checking, money market and saving accounts.
Today I decided to go for a 20 year fixed loan at 4.125% with zero closing cost and only a flat fee of $150. With my application I have to pay ahead the cost of appraisal and credit report of $465 which will be refunded at closing. I could have chosen a much lower rate of 3.75% but I will to pay a closing cost of $4,600.
My application was painless and done via telephone, on-line and e-mail ( sending documents). To lock the interest rate, I have to send today, a copy of my home insurance, copy of my sources of incomes, a copy of my recent credit report, a copy of statement of my savings and money market accounts, and a bill from my current mortgage lender. Since I am retired and my primary sources of income are from my SS and pensions funds, I did sent a copy of my 1099 and 1099R to the mortgage specialist who will be handling my loan.
Since my income was not as high compared to when I was still working, I asked the mortgage specialist handling my application if I will have a problem qualifying for the refinancing loan. He said to qualify your income/debt ratio should not be greater than 49%. In my case, he said my income debt ratio is 39% and he predicts I will have no problem qualifying. The closing date of my application is scheduled for August 20. Assuming that my loan will be approved, I will be saving about $160 a month based on my current mortgage payment and the new loan. Closing Ceremonies will be done here at home by a local representative of the bank. I am looking forward to August 20th.
Applying for a refinancing loan on-line is not that time-consuming if you do your homework. Do not deal with mortgage lenders who have history of numerous complaints from consumers. You can checked the complaints as well as testimonials on line for almost all of the mortgage lenders and banks. Happy Refinancing and Save Money!
One last point: Be sure your new loan has also a no penalty provision for pre-payment.
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