So, you have been hearing about the historically low- interest rate buzz for refinancing your mortgage over the last several years, and now you have decided it is your turn to take advantage of these offers. Where do you start? First thing you want to do is look at your financial mortgage health and make sure you are really to make that leap. What is your financial mortgage health in refinancing your mortgage it is a set of questions that your mortgage company is going to ask, and you want to have the right answers for this test. These questions are:
1. Have I been employed for the last two years at the same employer without any breaks in employment?
2. Is my current debt at a minimum level not more than 30% of my total credit limits?
3. Do I have at least three months of reserve mortgage payments in my bank accounts?
4. Have I check my credit report for inaccuracies?
5. Do I know where my last two paycheck stubs are, last two months bank statements, most recent mortgage statement, social security card, and the last two years Federal Tax Returns with their w-2 statements included are stored.
6. Have I not been late on any debts including the mortgage in the last 24 months?
If you can answer yes to each of these five questions you are probably ready to start the pursuit of refinancing your mortgage. Now the question is where are you going to apply for that reduction in interest rate you are seeking? The best place to start is your current mortgage holder. Dig out that mortgage statement look for the mortgage company’s toll- free telephone number and give them a call. Before you give the representative any new personal information you want information from the mortgage company about new mortgage refinance programs.
The representative will provided you an array of information so you need a pen and paper to write it all down you are still in homework mode. Not only are you wanting to know about the lowest interest rate program available for you are wanting to know if they offer to current mortgage customers a zero point and zero loan origination fee program fee as well. What are points and origination fees? These are fees that the mortgage company will charge to increase their yield of profit for the loan it is usually from one to three percent of the mortgage amount you are seeking. Being that you are current customer, and probably already paid it the first time that you took out the mortgage you should expect to have these fees waived or drastically reduced.
This is the whole purposed of calling your current mortgage company first to save money. The representative will attempt to have you to start the loan application at that point now that they were friendly and courteous to you and gave you all of the parameters on what to expect in refinancing your mortgage. Be polite, and let them know that you need a day to think this information over, and that you will call the mortgage company back to start the process in the next few days. The representative that you are speaking is not on commission so don’t worry that you have just wasted their time. Answering your questions is what they are paid by the mortgage company to do. If the quote that you have received is competitive you will be calling them back, and starting the mortgage refinancing process any way you just want to make sure of the information.
Next step is to do a little shopping around so open up that computer there are variety of mortgage companies, and banks out there looking to get your business. As you surf their websites you will see mortgage companies that are advertising their loan programs. Browse through the programs keeping in mind that these are the mortgage company’s teaser programs to get you to call them. Read through some of the lenders information and compare your notes to your mortgage company’s quote. If you see a program that may be better than the program offered by your mortgage company give them a call and ask them the same questions that you asked your mortgage company writing down their information as well. Repeat this process at least one or two more times. There is some work involved here but you are working to save yourself money here. It is the same as getting an extra paycheck just larger seeing that you will probably refinance your mortgage for a new mortgage of 15 to 30 years so your savings could be tens of thousands of dollars over that time period in savings from the quote of other lenders. Keep in mind the mortgage representative you are speaking to does this every day you don’t so they are ahead of the game all you have is your wits, and competitor information to compete against them.
Now that you are armed with several mortgage companies’ data you have one more thing to do before deciding who is going to getting that next call to start the mortgage refinancing process. You need to know what your house is worth. Why would you need this information you are not selling your home at this point. The reason for this is the mortgage company is going to estimate the value of your home against the loan that you are seeking. They are trying to determine a loan to value ratio to know what loan program to fit you in as there are qualification parameters. A good place to start looking for this information is back on the internet again. The lower the loan to value ratio the better you are in to get the best loan program. The target you are aiming for is a number less than 80%. If you are not able to reach that goal the mortgage company still has programs to assist you.
Armed with all of this information you are ready to make the decision as to who will get the call to refinancing your mortgage, and fill out that credit application with. So, good luck.