What You Need To Know If You Are Refinancing A Mortgage

Due to the decrease in mortgage rates, consumers are starting to look at refinancing again. If you are in the market, here are a few things you need to know:

1) Mortgage companies are just as aggressive today as they were years ago

Some of these aggressive mortgage companies are saying anything to get you into the door. Unfortunately, the real details are not as advertized and most of the time consumers don’t catch it. Be careful doing business with the aggressive mortgage lenders.

2) It might not make sense for you to refinance

On the surface, it might look like it makes sense to refinance. If you dig deep, add in all the fees, and run the numbers, refinancing might not be prudent. Unfortunately, if you are with an aggressive salesperson, you will never be told that it is not a good idea.

3) Understand the fees that you are paying

I am seeing cases where mortgage companies are loading up these loans with fees. Be careful and understand the fees that you are paying.

4) There are no good deals

This is a big one. You can shop rates all day long and probably not come up with much of a difference. ALL mortgage companies are working with the same markets. If a mortgage company is giving you a special deal, you are paying for it or will pay for it in the end.

5) The ability to refinance is based on good credit scores and at least 5 to 10% equity

A good credit score and equity in your home is extremely important today. The lending standards have become very restrictive.

6) Companies are still aggressively marketing the low payment through the use of adjustable rate interest only mortgages

Only in certain situations, do these make sense. In most cases, they do not. Don’t let an aggressive mortgage salesperson sell you on the low payment.

Bottom-line – The mortgage industry is hurting. This type of environment is ripe for the unscrupulous, desperate salespeople to do whatever it takes to close a deal. It is more important than ever before to know all of the details and information before signing on the dotted line. Don’t get me wrong. There are some excellent mortgage people that are ethical and take care of their clients. Unfortunately, they represent a small percentage. This is why you have to be careful.

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