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Things I Learned When I Refinanced My Home
ome days I feel like a
home refinancing expert. One year later, while checking on
I’ve refinanced my home the Internet I found a rate of
twice in the last three years to 4.375 percent. (I looked up
take advantage of attractive interest rates because someone
interest rates. Although interest told me they had just gotten
rates have been rising lately, their mortgage refinanced at 4.5
refinancing may still be an percent). I ended up refinancing
attractive option if you’re again but not before calculating
paying a high interest rate on a how much I was going to save in
mortgage. When my husband and I interest versus how much the
built a new home in 2000, we felt additional closing costs were
interest rates were a little high going to be. My calculations
so we opted for a three year showed it would take
mortgage with an 8 percent approximately 18 months of
mortgage rate instead of locking payments at the lower rate to
into a 15 or 30 year mortgage recoup the money it cost to
with a slightly higher rate. refinance. Although my husband
and I now have a very attractive
We were counting on interest mortgage rate, our payment is
rates going down before our slightly higher than it was when
mortgage was up for renewal and we were paying 8 percent
they did. When the rates went interest. But instead of having a
down to 5.5 percent two years 30 year mortgage we have a 15
later we refinanced. To find the year mortgage. The low interest
best rate I could, I called my rate is allowing us to pay our
local banks, credit unions, and house off in half the time we
savings and loan companies. I thought it would!
also checked interest rates on http://www.easymortgagerefinancin
the Internet. gloans.com/refinancemortgagequote
/ cost you $6,000 to borrow the
money in addition to other
Although interest rates have been closing costs.
rising lately they are still
reasonable, especially compared 2) Closing costs vary with
to the interest rates on many lender. The U.S. government
credit cards. In addition to requires lenders to provide what
looking for a lower interest is called a “Good Faith Estimate”
rate, people may be considering of what your closing costs will
refinancing to take some of the be. Closing costs typically
equity out of their home for include things such as: credit
things like: paying off high rate report fees, title company
credit cards; to fund a home service fees; title search fees;
remodeling project; or pay for a loan origination fees; appraisal
child’s college education. fees; and documentation fees.
Your lender will give you an
Below is a list of some of some honest estimate of what your
things I learned during the two closing costs will be. Your
times I refinanced in the past actual cost may vary slightly
few years. because the lender does not
always know what the exact cost
1) The lowest interest rate is of a certain fee will be such as
not always the best deal. Some the appraisal fee because they
companies may offer a very low probably work with several
interest rate but may charge appraisal companies who likely
several “points.” A point is 1 all charge different rates. One
percent of the amount you are additional thing to keep in mind
borrowing. As an example, if you about closing costs: you may see
want to borrow $200,000 and three advertisements that proclaim
points are being charged it will their company does not have any
closing costs. That may be true. each month so they can pay it for
The lender may pay the closing you. Many lenders require you to
costs for you but the tradeoff pay into an escrow account to
for you will likely be paying a ensure the homeowner’s insurance
higher interest rate. will be paid.
3) There may be other fees 5) Ask if the loan you plan on
involved when you refinance. For taking out can be sold to other
example, the first company we lending institutions. The
refinanced with required that 12 possibility of your loan being
months worth of property tax sold may or may not be an issue
money be kept in escrow with for you. It’s not uncommon for
them. The credit union we took loans to be sold. It’s even
out our original loan with didn’t likely your local bank sells some
require any property tax money in of its mortgages. I don’t happen
escrow. We had to come up with a to mind if my mortgage is sold to
big chunk of money that we hadn’t another lending company. It’s
planned on for that tax escrow happened to me once and it was an
account. The second time we almost seamless process on my
refinanced I was smarter and end. I only had to do one thing
asked how much money needed to be and that was set up a new
kept in tax escrow. It was only 6 automatic payment from my
months of property tax money so checking account because I prefer
we ended up getting part of our to have my mortgage payment taken
tax escrow money back. out of my checking account
automatically each month. That
4) Ask if your homeowners way I don’t have to worry about
insurance will be paid by you or forgetting to pay it on time and
if the lender will require you to possibly incurring late fees.
pay money into an escrow account
6) An online bank might be a good
place to do business with. A good 7) Get everything in writing and
way to find out if the bank is a pay attention to deadlines. For
real financial institution, check example, if you are quoted a
to see if it is insured with the specific interest rate, get it in
FDIC. You can do an online search writing. Be aware though that the
with the phrase “banks insured interest rate you are given will
with FDIC” or a similar phrase to only be guaranteed or locked in
find the current link to check. for a specific amount of time,
When I found the 4.375 percent usually 30 days. If interest
interest rate it was with an rates go up during that 30 day
online bank whose workforce was period you will still get the
located in the Eastern part of lower rate you were guaranteed in
the United States. I live in the writing. If rates go down, some
Midwest. Thanks to the technology lenders will automatically give
of the Internet I was able to you the lower rate. It is
easily do business with the bank. possible that the rate guarantee
Any documentation I needed to period may be extended. When we
fill out was either e-mailed, were in the process of our second
faxed, or posted on a secure refinancing, a lot of other
Internet site that I accessed people around the U.S. were
with my own personal id and refinancing because rates were
password. The secure Internet really attractive. As a result
site was associated with a our lender had a difficult time
nationally known lending company. getting an appraisal scheduled.
For the final signing the lender Even though we didn’t close until
contracted with a lending company nearly 2 weeks after our 30 day
in my area and that’s where my deadline our lender honored the
husband and I went to sign the rate they had guaranteed us even
final papers and close the loan. though rates had gone up.
lenders, find out what your total
The above items are things I costs will be, and ask questions
learned during the two times I about anything you don’t
refinanced. I’ve done my best to understand or are not sure of.
include everything I learned but This will help make the process
your experience with refinancing easier for you and help eliminate
may be a little different and you any unpleasant surprises that
may find out things I didn’t. The cost you more money than you were
best advice I can offer if you planning on spending for
are thinking of refinancing is to refinancing.
take time to do research, compare
About the Author:
D Ruplinger is a writer for EasyMortgageRefinancingLoans.com. To learn about refinancing online and to find the best refinancing rates, visit us
Source: www.isnare.com |
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