If you read my post, entitled "4 Signs of a Refinance Scam", then you're probably wondering the best practices for finding the right mortgage lender.
There are a lot of frauds out there and a lot of lenders with hidden costs and fees that you probably wouldn't think to ask about.
- Know why are you refinancing: When I was looking into refinancing 10 years ago, I knew very little about where to start. The only thing I knew was that I wanted to lower my monthly payments and hopefully decrease my loan term as well.
- Know all mortgage lender options: There are a variety of lenders out there. There are direct lenders, such as banks or other lenders that don't require a middleman. There are wholesale lenders who generally have lower rates than retail lenders. Other lenders consist of mortgage brokers, loan officers, and correspondents. Something to keep in mind when refinancing with a mortgage broker is to make sure they are contractually obligated to search for the best package.
Shop around and negotiate: Check all listings in order to find several lenders to compare rates and costs. While some people are uncomfortable using the internet, they shouldn't be. I only wish that 10 years ago the internet had such a wide array of secure websites and resources available to aid me in my refinance decisions. Back then, research was much more manual and finding the answers required a lot more work than it does today.
Whether you need a lower interest rate, want to change the term of your loan, or need to free up cash for another investment (see "Reasons for Refinancing"), there are different mortgage options to choose from depending on your needs. You want to be able to articulate your needs to mortgage lenders so that they can find you the best option. Additionally, if they think you are well researched, they won't try to get away with scamming you.
By using safe and secure sites on the internet, such as refinance.com, you are more likely to find more options that meet your needs than any other resource. Additionally, by knowing all the options, you will be able to negotiate and find the best deal.