Low mortgage payments can seem elusive if you have a pricey home loan. Where should you start if you want to refinance? Well, you might get online to check interest rates or take the route of calling a lender. But how do you get past the lingo to understand your options?
Take for example this common conversation.
I've got a 7 year fixed at 6 percent for 2 points on a rate 'n term. Or 5.5 percent for 4 points on a cash out. My no-cost-loan rolls in the fees and is at 7 for no points. Your FICO score has to be over 680 unless you're full doc.
But if the LTV is too high, you might need PMI. Give me your social, we'll pull credit, get some comps and see if we get an accept from DU.
I know what you must be thinking. You've entered a secret society that speaks a lost language, right?
So, don't be distracted by strange lingo. You just need my ten best kept refinancing secrets to know your options.
You want the focus to be on your refinance goals and available loan programs. So, keep the conversation on target. Begin like this. I have owned my house for two years and my payment is $2000 a month. What are my options for getting an affordable mortgage?
If the mortgage broker only quotes interest rates, emphasize your goals, for example lower monthly house payments. This will keep the conversation on the right track.
Tip: Set aside some quiet time to make this phone call in a private setting.
Anyone can quote mortgage rates. But to quote the best mortgage rate for your situation, a lender needs to know some details about you.
It's okay! You won't have to give out your social security number yet. But it would help to have your ducks in a row.
If you prepare in advance before you call a lender, you are more likely to get the best mortgage rate. So do yourself a favor and use my personal mortgage planner.
Tip: A file folder or empty shoebox makes a safe and handy way to organize your ducks.
Some loan officers work directly for banks or large mortgage companies. Some are independent mortgage brokers. Learn Kate's secret to selecting a mortgage originator. These days, most lenders have more mortgage programs than you'll ever need. So if you know the qualifying questions to ask in advance, you'll actually get better information tailored to your individual needs. (This is a BIG secret.)
Tip: Be careful not to get lost in the details.
6 percent is 6 percent right? Nope...
...not when you want to compare mortgage interest rates! So, it's important to ask each prospective lender the same set of questions. Otherwise you might end up comparing giraffes to camels or motorcycles to skateboards...
You get my drift. (OK, this is a REALLY BIG secret.)
Tip: Keep track of their answers so you can go back later and compare mortgage lenders without getting them confused.
The squeaky wheel gets the oil AND the best mortgage rate. I'm not advising you to become a nuisance, but I do recommend that you contact your mortgage lender at least once a week. It's important during the home loan process to see if there's anything additional your lender may need from you.
Tip: Follow up your calls with a quick email. Squeeeeak!
Tip: Include a explanation if there is anything unusual or missing.
Don't hide like an ostrich. Check daily to see if your lender has called. The same goes for email. Don't assume the worst. Expect good news!
Make sure your mortgage broker knows the best way to contact you.
Loan applications often require a physical signature. So lenders will mail you the mortgage application package to get signed. Return it pronto. It makes a difference.
Tip: Does someone else in your household pick up the mail? Make sure you check it daily during the refinance process.
Tip: If you truly can't sign during business hours, be sure to ask if they can accommodate your schedule.
Just because you've signed, it doesn't mean the process is final. Every once in awhile, a signature or document slips through the cracks and needs attention. But you don't need to sit around biting your nails to the quick, wondering if you're done. Call your loan officer with this one question: Has my refinance funded and recorded?
Tip: Store your final mortgage papers in a fireproof security box.
Haven't found what you're looking for? Here's the solution! Go ahead and Ask Kate for answers.
January 2016: The Mortgage Forgiveness Debt Relief Act Update.
September 2015: Fannie Mae and Freddie Mac Improve Loan Modifications.
Keep on the right path at A Homeowner's Survival Guide to the Intimidating Mortgage Process.
Please tell your friends about Ten Best Kept Secrets to Low Mortgage Payments. I hope you'll come back and visit often.
Jul 18, 18 12:02 PM
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