The legwork associated with refinancing can cost you needlessly. If you aren’t scrupulous about the conditions of your refinance, banks and their financers won’t pursue a deal that is optimal for you. Many lenders simply want clients who will consistently make payments and ask few questions.
Be clear about your new loan requirements
What is it you need exactly? Are you willing to pay for points or another down payment to lock in the lowest possible rate? When do you want to pay off the debt? Is your mortgage a jumbo mortgage? In many cases, it doesn’t matter how you answer – only that you are exacting in your answers. If you can present a salient picture of yourself as a once and future borrower, loan officers can often get you a better rate. If you aren’t sure, their computations won’t be either—don’t gamble on favoritism.
Ask your current lender first
If you have never failed to make payments to your current lender and have a sterling credit history otherwise, your lender will want to keep you. Reliable borrowers mean continued returns on the bank’s investment. Your current lender may go out of their way to favorably assess your home’s value and your standing as a borrower. This means a better rate and appraisal value for your home. Both of which will put money in your pocket.
If you want to go somewhere else, get a referral from friends or colleagues first. This is the fastest and most secure way to finding a new lender. Using the internet or following up on a television ad could cost you, so call your state’s banking division before you start sending out personal details.