5 Tips for a Mortgage Refinance
Before you jump in and refinance your mortgage to take advantage of current low rates, you need to understand what the process entails and what it means for you as a borrower. Obviously, the allure of refinancing is very real for homeowners looking to shave a few interest points off of their mortgage plans. Here at the Oklahoma City movers, we want to make sure you do your research and make the decision that is best for you and your individual needs as a homeowner.
First things first, shop around. Don’t commit to the first person you talk to when you never know what comparable rates are out there. Mortgage rates vary widely, and now it is more important than ever to price compare and shop around. Shopping around doesn’t mean you have to hit every lending facility in town—you can also do this competitive research online. Popular websites for mortgage information include Zillow, LendingTree and Bankrate.com. You should also check with lenders in your area, and ask friends and relatives where they got their mortgages and whether they'd recommend their lender.
Understand the refinancing is not for everyone. People who already have mortgages with fairly low rates might consider skipping a refinance, as a new loan typically carries thousands of dollars in closing costs. Refinance only if you can cut your mortgage rate by 0.5 percentage point (or more) from what you're paying. Consider how much longer you plan to stay in the home as well. Even the “no cost closing” loans have a cost. They can be disguised as upfront charges, rolled in closing costs, or no-to-low cost refinances, which are basically just higher interest rates.
Get a rate lock for your new mortgage. Today's historically low mortgage rates have left many lenders swamped with refinance applications, so it's important to have your bank lock your rate in writing. Most lenders will send you a "rate-lock sheet" by fax or email upon request, confirming the mortgage rate you're getting and spelling out when the rate lock expires. Requesting this shows your lender that you are an informed and educated customer.
Best of luck on your refinance and remember, do not accept the first offer as the best scenario, there are many lenders out there looking to make a deal.