Jumat, 06 Juni 2008

Helpful Tips When Refinancing your Home Loan

Many people are taking advantages of low rates by refinancing their mortgage loan. A question that often comes up is finding the best lender with the lowest refinancing mortgage rate can be a tough process. Are you aware that the rate quotes you receive when shopping for a new loan may have junk fees inside? Homeowners who learn to recognize some unnecessary fees can save thousands of dollars on their mortgage every year. Here are some helpful tips to so you get the best refinancing mortgage rates.

You may be required to pay an origination fee and a discount point fee to complete your home loan. At times, the mortgage broker offers you a rate so low that there is an additional cost to secure that rate and the borrower should pay that. However, there are other times when it is completely un-necessary. Homeowners who shop around for competing quotes can then see through the fluff and avoid paying double fees or discount points which can save themselves thousands of dollars every year.

As an example, a borrower is refinancing their home for $300,000. Your mortgage broker quotes you a rate of 6.50 percent and charges you a one percent fee. In this example the fee your broker charges is $3,000 which is a reasonable amount to pay. The problem is maybe your rate is not locked and rates jump and now your one percent fee moves to a higher rate of 6.875% .The broker may not tell you this has happened until the end when they throw the whammy on you that they can only do this rate at 1%, if you want the 6.50% rate, it will be 1.5%.

Is .375% of your mortgage rate worth agonizing over or just pay them the fees and get it done? In the scenario above, if you refinanced with the offered rate of six and one-half percent your payment would $1,896 per month. If you agree to the mortgage rate of 6.875% your mortgage payment would be $1,970 per month at 6.875%. This adds up to an additional $897 annually that you'll pay due to an irresponsible or inexperienced lender or broker. This is why you need to know the process before you jump in or it can become very costly over time. You can learn more about refinancing your mortgage online, what questions to ask, using an online calculator to determine if it is beneficial to refinance now, later or not at all.

MortgageLoanShop.net specializes in helping homeowners get the best mortgage rate when refinancing. Before you refinance your home, make sure you compare rates from local online lenders.

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