Refinance Mortgage Loan
Mortgage Refinance Guide
Step 7: What to Ask When You Refinance a Mortgage Loan
By: Meghan Carter
When looking for a refinance mortgage loan, it is important to compare as many lenders' offers as possible to find the best deal. Brokers can help that process by sorting through and comparing hundreds of loans to find the best possible refinance mortgage loans for your situation (Garton-Good 66). However, because a broker is only the middle person between you and the lender, there is a greater chance of a miscommunication than when you work directly with a lender (Strauss 112). Not to mention, brokers don't work for free. Whether you work straight with lenders or through a broker, make sure you find numerous offers and get all the necessary information to compare them. To help you gather that information and make accurate comparisons, here are the questions you should ask lenders.
Refinance Mortgage Loan Questions Your Should Ask
- You'll want a list of current mortgage rates and whether those rates are the lowest for that day ("Looking for the Best Mortgage").
- Ask what types of interest rates are offered, and whether they are fixed or adjustable. For adjustable rates, make sure you find out how the rates and payments will vary ("Looking for the Best Mortgage").
- Find out the annual percentage rate ("Looking for the Best Mortgage").
- Ask for a detailed list of fees and how much each will cost ("Looking for the Best Mortgage").
- Have every fee explained to you ("Looking for the Best Mortgage").
- Inquire about the down payment ("Looking for the Best Mortgage").
- Learn about any special programs managed by the lender ("Looking for the Best Mortgage").
- Ask about lock-in options after you have negotiated and come to favorable terms ("Looking for the Best Mortgage"). Lock-ins can help or hurt you depending on whether interest rates go up or down in the future; so carefully consider a lock-in before agreeing (Strauss 112).
- Ask about pre-payment penalties, and try to avoid a refinance mortgage loan that has one (Letizia 66).
- Ask if the lender offers pre-approval commitment before ordering an appraisal (Letizia 66).
- Ask if the lender can give you a good faith estimate (Letizia 66).
- Inquire whether you are able to pay taxes and insurance separate from the loan payments (Garton-Good 71).
- Find out if you must have a co-signer, and if so, how it will change your refinance mortgage loan (Garton-Good 72).
- Ask your friends, family, co-workers and others about the reputations of possible lenders. Make sure you get a refinance mortgage loan lender who is honest and honors written and oral promises (Eldred 198).
After you have gathered the answers to those questions from each of your possible refinance mortgage loan lenders, you'll want to organize the information and compare your offers. A good technique for comparing large amounts of data is to hand draw a giant chart or to use spreadsheet software. If you make a spreadsheet or chart of all the questions and the answers provided by the lenders, you will have a much easier time figuring out which is the best deal, and spending the extra time to find the best refinance mortgage loan lender will save you a lot of money and stress.
Mortgage Refinance Guide Sections:
Eldred, Gary W. Yes! You Can Own the Home You Want. United States: John Wiley and Sons, 1995.
Garton-Good, Julie. All About Mortgages. United States; Dearborn Trade Publishing, 2004.
Letizia, Joe Lance. The Complete Guide to a Higher Credit Score. Brick: Capital Investment Funding Corp., 2005.
"Looking for the Best Mortgage." U.S. Department of Housing and Urban Development. http://www.hud.gov/booklet.pdf. 7 Sept. 2006.
Strauss, Steven, and Jaffe, Azriela. The Complete Idiot's Guide to Beating Debt. New York: Alpha Books, 2003.