How to Refi
You own a home and now you are wondering “how” and “if”
you can refinance. You hear and see “refi now” on the radio, TV, newspaper and of course
plastered all over the internet. You
would think based on all of these ads the only thing important to think about
is the interest rate, the truth is that may be the least important. Yes, when starting the refinance process it
would be silly to only focus on the rate, as the interest rate is clearly not
the most important. Actually if you only
focus on the rate it could work against you.
It is most important to find right Loan
Professional to handle you’re financing.
This professional should not be a “part-time” loan officer; they should
take your financing serious. A mortgage
is the largest debt you will ever have, and it should not be treated
lightly. So how do you find the right
loan professional? Well first you need
to talk to a few and find someone you like to talk with and you can understand
what they are saying. A great source to
find Loan Professionals you can interview is Lend Ethics. I am not saying talking technical is not
good, but if you don’t understand what they are talking about then nobody
wins. It goes the other way too, if you
are a technical person and the loan professional cannot explain the technical
aspects of the loan process and market, then that might not be the right
person.
If you talk to a loan professional, and in the
first couple minutes of the conversation they are throwing rates and cost at
you, then I would be cautious. There is
so much that goes into the rate and cost, this is not something that should be
tossed around without getting detailed information about you and the loan you
are looking for. Just a few of many
things that go into an interest rate are credit score, city and state of home,
type of property, type of documentation, value of home, loan amount and much
more!
Let’s assume you found a loan professional or two
that you like… it is time to talk to your loan professional about all the
things going on in your life. That’s
right everything, and it includes, but is not limited
to weddings, divorce, new baby, new job, lack of job, debt, financial goals and
much more. Everything should be taken
into consideration when you are picking the right loan program, and the right
way to structure your loan.
Why don’t you just get quotes on rate and cost and
go with the cheapest option? There are
several reasons and the first is that you need to make sure you know what you
are comparing and you need to make sure the quotes you get are accurate and not
one of those Bait and Switch loans. An
unfortunate line you could hear from unethical lenders might be “by the way
this loan is fixed, but it is only fixed for 3 years.” Of course you don’t hear about that until you
are signing your final loan papers and you have wasted 30-45 days, sometimes
you don’t realize the loan you got until you already have it and it is too late.
So you have selected your loan professional, you
have been shown several loan options, you have seen different ways to do the
loan such as paying a higher rate and lower fees, or in some cases a no cost
refinance is the best way to do it. See
Article about “No Cost Refinance” to learn more.
If you haven’t already you may want to have your
Loan Professional talk with your Tax Professional and Financial Professional
and be sure that everything is in line with the rest of the planning you are
doing. If you don’t have a Tax
Professional or Financial Professional is sure to ask your Loan Professional
for a referral.
The end result is exactly what you want for a
refinance. You have selected the right
Loan Professional, right loan program, way to structure it, and most of all you
can rest assure you are getting a fair rate and cost for the loan you are
doing. Talk to your Loan Professional
about locking in your rate, and make sure you are both in agreement when the
right time to lock is.
Complete your refinance and enjoy the
benefits.
