Even a small change in interest rates can mean a big savings for a homeowner looking to refinance their home. Here, I will predict mortgage interest rates for the rest of 2009, and a for a few months in 2010. Also, I will tell you why I think the rates will change for the benefit of homeowners sometime in October of this year.
Lets just get right to it. I predict that mortgage interest rates in 2009 will be lowered down to their previous lows of around 4.69% for the typical 30 year fixed rate home loan. Currently, rates are around 5.19% for that same loan type. While 5.19% is still really low, refinancing and saving .5% really adds up to a lot of money in the long run.
Homeowners have an average interest rate in this country of around 9%. A 4.69% interest rate is nearly half of that. The savings would be incredible if a homeowner could refinance into such a low rate. I think it will be possible in October of 2009. This is when I predict that mortgage interest rates will be lowered to their previous lows of 4.69%. If a homeowner can hold off until then, they should to take advantage of the lowest rates possible.
I predict mortgage interest rates will lower in October because this is when mortgage lenders and banks will be looking for a new round of homeowners applications for refinancing. Right now, and for the past few months, mortgage lenders, brokers, and banks, have been flooded with desperate homeowners looking to save money, or save their home from being lost. While this is good for homeowners, it quickly led to a paperwork nightmare for lenders, and rates needed to be increased to help stop the flow. While the rate increase was only .5% this was enough to scare off most homeowners just looking to save money, yet still allowed homeowners at risk of losing their home, a chance to save it.
The bottom line is, I think mortgage rates will be lowered in October of this year. While not by much, saving even .5% truly adds up to a significant amount of money in the long run.
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Life can be very unpredictable, you could sign up for a mortgage scheme and then suddenly you find that there is a financial crisis in your business or your salary has been cut or you do have funds for a major home improvement or you are faced with a huge emergency medical bill or you have to pay up for a grand wedding. Anything can happen - anytime, under any circumstances and we have to face it with a brave heart. You could also be burdened with overdue credit card bills and want to consolidate your debts, and then signing for a mortgage refinance could be the most sensible thing to do. You not only ease out all your money problems you could also get some extra cash to save up and put it for other uses. A mortgage refinance scheme under such circumstances can make a world of difference for you and your financial tightness and most all end your sleepless nights to more peaceful nights.
There are many people out there who are not happy with the mortgage scheme they are on, they feel they are paying more interest rate, then it is best to switch your scheme to a mortgage refinance with a much more lower interest rate and a much more flexible terms and conditions follow. There are people who have managed to change their bad credit ratings to good credit ratings because they made a sensible decision to switch their mortgage to a mortgage refinance.
If you are all worked out with your current mortgage and are finding that you cannot manage your monthly installment payment smoothly then without hesitation switch to a mortgage refinance. And if you are not sure how to approach a financial company for a Mortgage Refinance, then you can contact a mortgage broker to do the job for you.
You might be in a situation where you have placed your property on mortgage to open a new business venture or to buy a new office space and you are not happy paying the high interest rate or finding it difficult to meet up with the payments, then checkout for a mortgage refinance. It will iron out all your financial woes smoothly and you can get on with your business smoothly without having to spend sleepless nights. Sometimes it so happens that you are dissatisfied with the current bank you are working with and are not happy with the mortgage scheme offered to you , you can easily switch to an new bank for a mortgage refinance who can offer you the best mortgage refinance rate. The best way to take advantage of a low refinance mortgage rate is to shop smartly as the competition among the financial companies are so fierce, they will do anything to satisfy their clients and not let them go. Whether you have a bad credit score or a good credit score there is always something worked out well for everyone.
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If you are in the process of refinancing your mortgage, choosing the right mortgage lender will save you loads of money and future headache. Choosing the wrong lender could cost you your home. This is why researching mortgage refinance information is the most important aspect of refinancing your mortgage. Here are several tips to help you choose the best lender when refinancing your mortgage.
I. Mortgage Loans are Like Toasters - Mortgage Refinance Information
Mortgage loans are commodities just like toasters and plasma televisions. There is a retail market where the average Tom, Dick, and Mary gets their mortgage and a secondary market where that very loan is sold to various institutional investors. If you treat your mortgage like a toaster purchase you will save yourself thousands of dollars in the process and avoid a number of costly mistakes.
II. Retail Mortgage Lenders Want to Overcharge You - Mortgage Refinance Information
When you contact a mortgage company or broker they have one goal for selling you a mortgage. That goal is to charge you as much as you are willing to pay for the loan. Remember that toaster? The toaster is only worth what someone is willing to pay, or overpay for it. The same is true with a mortgage loan. When you apply for a mortgage with your local mortgage company, they will provide you with a quote from a wholesale mortgage lender. The quote you receive is not the quote the wholesale lender gave them; the mortgage company will always mark the interest rate up without telling you. This markup from the retail broker or mortgage company is called Yield Spread Premium and will cost the unsuspecting homeowner thousands of dollars.
III. Never Trust a Bank - Mortgage Refinance Information
Banks don't charge Yield Spread Premium; they have their own name for it. Banks call this markup Service Release Premium or SRP. The fact that it has a different name isn't why you should never trust a mortgage banker; in fact, mortgage bankers have earned themselves a special place in Dante's Inferno for all the people they've ripped off over the years. There are laws in the United States that protect homeowners from the abuses of mortgage lenders and what are called "Predatory Lending Practices." This bit of legislation is called the Real Estate Procedures Settlement Act, or simply RESPA.
When RESPA was making its way through the Senate and the House of Representatives, the banking industry lobbied heavily to be excluded from any disclosure legislation. Bankers spent millions of dollars wooing your representatives; when all was said and done and RESPA became law, banks were exempt. This means a mortgage banker can charge you whatever they like, call the charges whatever they like, and no one is the wiser. Banks have been ripping off unsuspecting homeowners for years, this is how they make their profits. No one but the banks knows the extent of it because banks are not required to disclose their fees or profit margins. Never, under any circumstances, take out a mortgage loan from a bank.
IV. Additional Sources of Mortgage Refinance Information
You can learn more about refinancing your mortgage and avoiding costly homeowner mistakes including paying YSP on your loan by registering for a free mortgage refinance information guidebook.
You've undoubtedly heard about the housing crisis that has hit all over the United States in the last few years along with reports of decreasing interest rates and refinancing present mortgages. If you live in or around the Madison, WI area, you may well be wondering where you can go to get an ideal refinance that will lower your house payments and maybe even keep you from foreclosure. In order to do a wise job of your Madison refinance, you need to educate yourself on every facet of the process so that you know what to expect and how to avoid hidden charges and mortgage traps.
The first thing you need to do is decide if a refinance is really the best step for you to take at this point. Just because current interest rates seem low, that doesn't mean that all the conditions are right. Some of the questions you need to find answers to include:
1. How long do you plan to continue living in your house? If you're planning to sell within the next few years, then you probably will end up paying more to refinance than you'll actually get back out of the lowered rates.
2. How much equity have you built up in your home? If you have a lot, it may be to your advantage to take out a home equity loan or utilize cash-out financing rather than doing an actual refinance.
3. Are you paying mortgage insurance on your current mortgage? If you are, it's possible that by refinancing you'd eliminate the need to do so.
4. How much will closing costs be on your new loan? If your reason for refinancing is that you are going through a financial crisis, then the amount of the closing costs may prohibit you from taking out a new loan.
The second thing you need to educate yourself about is what interest rates you should expect and the going rate for lending fees and closing costs. If you know what other people are paying, you'll be able to recognize if a lender is offering you a good deal. You want to find the lender that will offer you the best rate along with the lowest fees in order for you to come out on the plus side with your Madison refinance. Get quotes from several lenders, if possible, so that you can choose the one who's willing to do the best for you. Right now the rates in the Madison area are between 3.625 and 4.625, so if you get a quote for something in that range, you know your lender is being honest with you.
The recent announcement of President Obamas "Making Home Affordable" plan will allow millions of current homeowners the chance to refinance or modify their home loans into new 2% fixed rate mortgages. The savings, through interest alone, easily add up to hundreds of dollars per month. Here is how this $75 billion housing bailout plan works:
-Homeowners who have seen their home or property values drop by 15% or more as a result of this housing crisis, are in luck. Millions of homeowners who purchased their home in the past few years now are stuck with mortgages that are actually worth more than the home. Now, you will still be approved for a 2% fixed rate finance even if you owe up to 5% more than your home is actually worth.
-Homeowners who have been able to make every one of their mortgage payments on time and in full for the past 12 months, or longer, in a row, can now refinance into the Government backed fixed rate 2% home loan. All homeowners will qualify for this refinancing part of the "Making Home Affordable" plan as long as you have not been late or missed any payments.
-"Financial Hardships" such job loss, income loss or reduction, hospital bills or tuition payments, high interest debts, or a whole list of other things will help a homeowner qualify and be approved for a home loan modification. This loan modification will allow homeowners who have missed or been late on a few mortgage payments and are struggling financially. Include a handwritten letter stating your "Financial Hardships" and hand sign it. Attach this letter to your loan application for a 2% fixed rate, government backed, home mortgage loan modification.
-A homeowner who is lucky enough to have a mortgage financed or backed from Freddie Mac or Fannie Mae will be automatically eligible, regardless of your financial situation, for a 2% home loan refinance or modification. This is possible, again, because of President Obama's and the Federal Governments "Making Home Affordable" plan.
By taking advantage of this great time for refinancing or loan modification, a homeowner can easily save hundreds of dollars every single month, in interest savings alone. This easily adds up, in most cases, to tens of thousands of dollars in savings over the course of the mortgage, which is usually 30 years. Homeowners who are having financial problems, or think there mortgage payments are too high and they could do better, should look into the potential savings refinancing or modification of your home loan are. Odds are, especially using this "Making Home Affordable" plan, you will qualify for a much better home mortgage than you have now.
The first of the three providers of bad credit loans schemes is payday loan providers and the services they offer are cash advance, salary and payday loans which are designed only for borrowers who have bad credit. And these loans that are provided are unsecured, and as an applicant you will have to prove your identity. Another requirement is your proof of income, and most loans that are provided are required to post dated checks which should be put in before the repayment date of the loan.
The second provider is the hard money lenders who deal with the issue of secured loans for people with a poor credit rating. Most of these providers are top firms or massive organizations, that offer loan the require collateral backing. The reason for this is that if the individual fails to repay the loan the securities will be sold to full the gap. The next type of loan provider for people with bad credit is the private money lenders who grant personal loans to people without any security or background check.
For these particular services the lender normally charges a higher interest rate, but you don't have to ask why these creditors are still doing successful business with such high rates. And their grand purpose for being in the industry is that they offer an outstanding service to many people who have poor credit. So in any case of bad credit ratings you can always call the private money lenders and let them work something out for you.
Are you looking to refinance a mortgage? If you haven't refinanced before, then you may want to read this article. Discover the information you need to know before refinancing. Let's discover refinance mortgages!
You have a home, and you either have completed paying the mortgage or you are still in the process of paying your home.
There comes a point when you need a higher level of finance. Home loans won't do it, and there needs to be a better solution. For most people, this is a process that begins with refinance.
Refinancing gives you access to much more than most other forms of finance can. However, there are some points to remember.
The money you can get through this form of finance, is largely based on your equity. So, with all the payments made, taking out the interest paid, results in what you own, and the refinance lender will look at this factor more than anything.
The problem with this, is that it is like taking out a new mortgage. And you will need to pay 2 high levels of finance at the same time. So, it is essential to make sure you own financial position, before doing this.
Another point to remember, is that the finance works similar to your mortgage. So, you will find fixed and adjustable versions, and repayment terms which are similar.
Some great ways to find the best offers, is to look through magazines that deal with real estate, classified papers, and the internet.
Generally, when you first buy a house, the mortgage that you get does not represent accurately the earning power that you are likely to have later on in life. That is to say that several years into your mortgage, there is a good chance that you will be making more money than you were at the time your mortgage started and that you would be able to handle more hefty mortgage payments. In a case like this, it is a good time to refinance your mortgage.
However, in the event that you have poor credit despite your new funds and you are applying for a bad credit home mortgage refinance, things can get quite a bit dicey. It can be very difficult to get decent interest rates in order to refinance your mortgage. If you aren't careful, you could end up with a worse deal than you had originally intended. However, bad credit home mortgage refinance can also save you a significant amount of money.
If your credit is better than it was when you first got your mortgage, right away you will be facing better terms than you originally had. Depending on the state of the market, you should be able to manage swinging a better deal. Also, sometimes just the state of the market dictates the rates and percentages that you are able to get on a certain loan.
The best way to refinance your home mortgage, without any question, is when the market is good and when your credit is good as well. But, rarely do the stars align perfectly and you will have to work with what is available to you. Rest assured, if you look around for it, you can find a good refinancing option.
With mortgage interest rates rapidly rising, now may be the time to refinance your variable interest rate home equity line of credit (HELOC) or adjustable rate mortgage (ARM) home equity loan into a fixed interest rate second mortgage. Otherwise, your payments could become more than you can afford, which could be dangerous because your HELOC is secured by the equity in your house.
By refinancing your existing home equity loan or line of credit you could save a lot of money in the long run. There are many places you can find a fixed interest rate second mortgage loan. These tips can help you keep your costs down and help you avoid unpleasant surprises at closing.
· First, order your credit report from all three credit reporting agencies and check it for errors. An inaccuracy you aren't aware of could cost you thousands of dollars in extra interest or even cause a denial of credit.
· Find out what current mortgage rates are and whether they are going up or down. Knowing the current mortgage rates will give you bargaining power when you shop for your new loan.
· Talk with your existing lender about mortgage refinancing of your home equity line or variable interest rate 2nd mortgage. At the same time, contact at least one bank, one credit union and one direct mortgage lender. Their 2nd mortgage loans probably cost less than ones from finance companies and mortgage brokers, and one of them could possibly give you a better deal than your existing lender.
· Most lenders will loan you up to 85% of the value of your home based on the total of both the first and second mortgages. Steer clear of the 125% Loan To Value (LTV) second mortgages or any other loan that allow you to borrow beyond the value of your home. Mortgaging your home for more than it is worth is an easy way to lose it.
The other problem with 125% LTV loans is that you may not be able to claim all of the interest you pay on the loan. According to the Internal Revenue Service (IRS), there is a limit on the amount of debt that can be treated as home equity debt. The total home equity debt on your primary residence and second home is limited to the smaller of:
- $100,000 ($50,000 if married filing separately),
- The total of each home's fair market value (FMV) reduced (but not below zero) by the amount of its home acquisition debt and grandfathered debt.
Interest on amounts over the home equity debt limit generally is treated as personal interest and is not deductible, so you could lose the tax deduction benefit if you mortgage your house for more than it is worth.
· Find out what will you have to pay in points and fees. Remember, 1 point equals 1 percent of the loan amount (1 point on a $10,000 loan is $100). Reputable lenders normally charge between 1 and 3 percent of the loan amount in points and fees. If points and fees are more than 5 percent of the loan amount, you should probably shop for a different lender.
· Find out if the new loan carries a default penalty in case you are late or miss a payment. Default penalties could cause the interest rate to increase dramatically.
· Before you apply, pay close attention to the terms of a loan including the type of 2nd mortgage, the presence of prepayment penalties, balloon payments, low or high down payment, mortgage insurance requirements, payment schedule, lock-in period and other loan features. Are the terms better than yours? If not, keep shopping.
· Know your legal rights. The Federal Reserve Board states that if you're using your home as security for any type of home equity loan, including a second mortgage, federal law gives you three business days after signing the loan papers to cancel the deal--for any reason--without penalty. You must cancel in writing within the three-business-day window of time, and the lender must return any money you have paid to date.
Mortgage leads are the back-bone of any mortgage loan professional's business. The lack of connection between the buyer and the seller requires the use of lead generation sources for mortgage professionals to close the gap. In order to increase their chances of success, mortgage loan professionals must fully understand the process behind generating mortgage leads.
Techniques of generating mortgage leads
Having the right technique could be the rise and fall of your business you have to find/dig through the different techniques and find which one works best for you and then capitalize on it for max gains in revenue. It's either that or pray for a miracle and lose money. Here a few methods listed below.
• Most mortgage professionals use direct e-mail marketing in generating mortgage leads. Bulk e-mails are the key factor of the process as mail responses vary from.5% to 2%. The targeted consumers are categorized into several classes including consumers, builders, Realtors, title companies, and appraisers. Each targeted class is provided with a different relationship advantage. Home buyers are the ultimate target of the system. Mail is sent to homes in order to measure the public can measure the response received. The letter used should be designed in a manner that demonstrates an image of security, hope, and credibility. Direct mail methods are ineffective as over 98% of letters sent will most likely be thrown in the trash
• Many mortgage companies, including Countrywide, and Wells Fargo (just to name a few) has provided their sales staff with a script used to contact the potential homeowners via telephone to offer refinance services. This system requires the use of advanced hardware including a good list of phone numbers, locations, and other necessary data. The cost of this method is high while the benefit is often excellent. Most homeowners should be contacted on the weekend or in the evening hours as this is often the best time to reach them.
• There are hundreds of different methods used to generate quality leads utilizing online marketing. The most common method used by mortgage brokers is PPC hands down. There are other methods used such as banner ads and 3rd party lead generating companies but PPC is by far the best and you have a little more control over knowing where your money is going/ being able to see statistics. Now if you don't want to bother with all of that you could always hire a lead generating firm this is by far the most time efficient stress free method! Not to mention most firms will do offer a guarantee (money back) if they don't offer this then don't work with them.
Generating leads is pretty simple you just have to capitalize on the leads once you get them don't be lazy. Hire someone to help you if needed don't be thick headed and try to do everything on your own. If you need someone to close/ work your deals by all means HIRE THEM.
President Obama is ready to help millions of homeowners save hundreds of dollars every month, or even their home from foreclosure. The recently announced "Making Home Affordable" plan will allow homeowners to obtain 4% fixed rate home mortgages. Getting approved for help is easy, and here is how:
- A homeowners mortgage must have less than $729,500 remaining on the balance.
- If a home loan is financed or backed in any way by Fannie Mae or Freddie Mac, the mortgage is automatically eligible for a 4% modification.
- If a homeowner has been able to pay their mortgage payments on time and in full for 12 consecutive months, they will be eligible to refinance their home loan into a 4% fixed rate mortgage.
- Homeowners who have missed or been late on mortgage payments within the past year will be more likely approved for a home loan modification. A "Financial Hardship" letter will need to be included stating your financial problems, bills, income, and other financial problems.
- A lot of homeowners are in the beginning stages of the foreclosure process. For a homeowner who is facing foreclosure, a fast track home mortgage refinance or modification will be allowed in order to increase the chances of the homeowner being able to keep their home.
- A home can be worth up to 5% less than the actual mortgage is for. This helps a lot of people who have bought a home in the past few years and have since seen their property values plummet due to the housing crisis.
- Monthly mortgage payments which are modified under this plan will not be over 31% of the homeowners gross monthly income. A lot of homeowners pay over 50% of their income toward their home currently and a 20% savings would mean huge savings.
Right now is a great time for millions of homeowners to take advantage of this plan and refinance or modify their home loans and save money. The money can be used to reduce other debts, improve your home, or for whatever you can think of. It will not hurt you at all to consider refinancing or modification of your mortgage and see the potential savings that you may be able to get.
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Mortgage loan is the generic term for a loan secured by a mortgage on real property; the "mortgage" refers to the legal security, but the terms are often used interchangeably to refer to the mortgage loan. Mortgage loans generally refer to a loan secured by residential property, often for the purpose of acquiring the residence. Mortgage loans may be lower priced than other forms of borrowing because the value of the property reduces risk for the lender. There are many benefits of Mortgage Loans.
The first benefit of mortgage loans is that there are many types of mortgage loans and are available and used worldwide. The flexibility of interest rates also adds to the benefits of mortgage loans. Here, the interest rates may be fixed for the life of the loan or can be changed at certain predefined periods. The amount paid per period and the frequency of payments; in some cases, the amount paid per period may change or the borrower may have the option to increase or decrease the amount paid.
Another benefit of Mortgage loans is that there are a variety of ways in which you can repay a mortgage loan. The repayments may depend on locality, tax laws and prevailaing culture. The most common way to repay a loan is to make regular payments of the capital, also called principal and interest over a set term. This is commonly referred to as (self) amortization in the U.S. and as a repayment mortgage in the UK. A mortgage is a form of annuity and the calculation of the periodic payments is based on the time value of money formulas. Certain details may be specific to different locations: interest may be calculated on the basis of a 360-day year.
The main alternative to capital and interest mortgage is an interest only mortgage, where the capital is not repaid throughout the term. This way you can benefit more from Mortgage loans. This type of mortgage is common in the UK, especially when associated with a regular investment plan. With this arrangement regular contributions are made to a separate investment plan designed to build up a lump sum to repay the mortgage at maturity. This type of arrangement is called an investment-backed mortgage or is often related to the type of plan used.
Another important benefit of Mortgage Loans is that during your interest only period, your entire monthly payment is tax deductible. Interest rates on mortgage loans have record lower rates that can save you your money. Interest Only loans offer lower payments. Yet another benefit of Mortgage loans is that interest rates are tax deductible and are also made with flexible options with fixed rate or ARM's.
Mortgage Loans have a number of loan options. You can easily find the right lending package for your individual needs, depending on your current and future financial situation. A Mortgage Loan also has the flexibility of lowering your mortgage duration so that you can become debt free sooner than usual.
Business owners looking for office space, factories or stores to expand their business can go for commercial mortgage lending companies to realize their plan. Only commercial mortgage lending companies will help them purchase commercial property. However, the commercial mortgage lending plans are available with different interest rates, terms and amounts. As a business owner, you have to be careful while opting for a particular commercial mortgage lending service. Buying commercial property has become a craze among the business owners. After purchasing commercial property in a good location, they lease out the additional space. Thus they recover advertising or equipment expenses.
However, some business owners don't want to go for commercial mortgage lending. To avail oneself of commercial mortgage lending, one has to declare his or her financial information. Qualifying for a commercial mortgage is also quite difficult. But if you remain watchful during the selection process, you will definitely get the get the best deal. You should ask quotes only from those commercial mortgage-lending companies that are federally insured. You can check the credentials of the companies with the Better Business Bureau. If the companies have complaints registered with the bureau, then stay away from such dubious firms.
If you don't have time for do all the research, you can enlist the help of an experienced and proficient commercial mortgage-lending broker. The broker will help you select the best commercial mortgage lenders capable of meeting your needs and requirements. Not only that, they will offer you valuable advice so that you can get the best rates.
If you have the time, you can search for the best commercial mortgage lending companies on the web. Among several commercial mortgage lending companies, you can opt for the most suitable one. If you are searching on your own, don't forget to check all aspects of the company concerned.
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Your FICO Credit score is used by mortgage companies to determine how much of a risk you are for a home mortgage refinance loan. The lower your score, the more you will pay when mortgage refinancing. There are ways to improve your credit before applying and save money on your home mortgage refinance loan. Here are tips to help you polish your FICO score and qualify for a better mortgage refinancing interest rate.
FICO stands for "Fair Isaac Corporation," named for the company that calculates your score. Fair Isaac evaluates the contents of your credit reports and assigns a numerical value to your credit worthiness. Because there are three companies that maintain records, you will have three FICO scores, one for each credit agency. Before you consider mortgage refinancing it is important to request credit reports from each credit reporting agency and carefully review your records for errors.
Any adverse information found in your credit reports will damage your FICO scores. Other factors that affect your FICO score include the length of time you have been using credit, the amount of available credit vs. your debts, negative credit information in your file, collections, any write-offs or bad debt. If you find mistakes in your credit history it is important to dispute the error and allow enough time for the correction to raise your FICO score before applying for a home mortgage refinance loan.
How to Improve Your FICO Score before Mortgage Refinancing
Improving your credit score takes time, there is no quick fix; however, there are steps you can take to raise your score. First, make sure you are paying all of your bills on time as 35% of your FICO score is based on your payment history. Fair Isaac also bases 30% of your FICO score on the amount of your debts and your available credit limit. The remaining factors include 15% based on the length of your credit history, 10% on the amount of recent inquires, and 10% on the type of credit accounts you use.
The items you can control prior to mortgage refinancing include paying your bills on time, maintaining low balances on your credit cards, and paying off negative information found in your credit reports. The more time you have to devote to improving your credit score, the more you can boost your FICO Score. If you are a homeowner with poor credit you want to devote at least six months to improving your FICO score before applying for a home mortgage refinance loan. You can learn more about your credit and how it affects mortgage refinancing by registering for a free mortgage tutorial.
The purpose of refinancing your mortgage is to obtain a lower interest rate, therefore it has a potential to save you some money in the long run. Although not all bad refinancing deals are the result of scams by unscrupulous lenders, there are however many predatory lenders out to take advantage of you.
So if you are in the process of refinancing your mortgage, you need to learn how to protect yourself from those predatory mortgage lenders. Do your due diligence and research before you agree to sign any legal contract. Knowledge is your best ally when it comes to protecting oneself from scams and dishonest mortgage lenders. Knowledge is power indeed!
But, how do you recognize the signs of mortgage refinancing scam?
The first precaution is to begin doing some research to gain the necessary knowledge. The Internet is a great place to start, you can quickly gain some basic mortgage refinancing knowledge by doing a few searches online. You can also call the companies and ask questions. Become familiar with the mortgage lingo and the business phrases used in this industry. While doing your research, you want to make certain that you understand what are your rights and the lenders's obligations as well.
By law, mortgage lenders and financial institutions have the obligations to disclose and inform you the rate, fees, and closing fees of their loan products. You should also know how much time you have to close the deal before rates are subject to reevaluation. Be very cautious with those lenders who refuse or try to delay providing this kind of information openly.
For example, there are many pesky mortgage lenders do not tell you when locked in rates run out. They do this on purpose of course, so they can quote you a new rate with one or two points higher during closing. This is the most common scam many mortgage borrowers fell into.
Demand the Good Faith Statements from lenders, analyze carefully all the costs incurred, ask questions and demand explanations for every cost that you don't understand or looks obscuring. You have the right to do so. If the lenders refuse to provide the information you request, don't be afraid to back out from the deal.
Another common mortgage refinancing scam sign you need to be aware of is the paperwork. There are shady mortgage lenders who try to confuse you with paperworks. They know that people don't like to read paperworks and they will slip in terms and fees in a legal contract so that they can get more money out of your pocket.
You should not be lazy reading and analyzing all the fine prints. Again, study the Good Faith Statements carefully, it consists of all the critical information there. Be aware when lenders try to encourage you to borrow more and push you to agree on higher payments. They are doing this to increase their profits. They don't care if you will get foreclosed in the future.
So, knowledge is your greatest protection from the scammers in mortgage refinancing. Check out the lenders thoroughly and be observant to those signs that smell scams. The best terms and rates are out there, so do your homework well in order to get the best deal.
