Every year, thousands of homeowners refinance their mortgage loans in order to take advantage of low interest rates, make important upgrades and renovations to their homes, consolidate old debts, pay for college expenses and even change to a shorter loan so that they can be debt free more quickly. If you’re thinking about refinancing your home loan, the first step is selecting the right refinance company. There are hundreds of refinance companies out there – how are you supposed to pinpoint the one that will give you the best service and the best refinancing rates? The following advice can help.
Your Existing Mortgage Lender Might Be The Best Home Refinance Company
Sometimes, the best refinancing companies are right under your nose. Your existing mortgage lender may be willing to refinance your home loan. If you have always been on-time with your payments and have a long history with them, they may be amenable to setting you up with a very competitive mortgage refinance. Take your experience with them into account, too. Have they been prompt and courteous when you’ve needed their help in the past? Have you been satisfied with their level of communication and customer service? If so, you have even more reasons to work with them to refinance your loan. If not, don’t even put them on your list.
At the same time, make sure that you talk to someone other than your existing lender. Even if they offer to lower your rate and payment, you should still ensure that you are getting the best possible offer. Comparison shopping is the best way to do this.
Find Refinancing Companies on the Internet
Today’s best refinancing companies maintain easy-to-use websites. Those websites typically boast intuitive interfaces, informative calculators and other features that make it easy for you to see what they have to offer. As you conduct your research about various refinance companies, always pay visits to their websites. A clear, easy-to-understand website is a sure sign of a company that has its customers’ best interests at heart. While you’re visiting each site, submit a quote request form to get the ball rolling. At the same time, research them on other websites. If they are a good lender, other customers will have posted testimonials to their experiences. Conversely, if they are not good, you should find negative comments. When you look at third-party review and commentary sites remember that even the best companies will have one or two dissatisfied customers — focusing on the overall trend of the comments will give you better information than just reading one or two horror stories.
Look in Your Own Backyard for the Best Company to Refinance With
If you prefer working with a refinance company on a face-to-face basis, restrict your online searches to refinance companies that are in your own backyard. Pay each prospective company a visit to see what kind of rapport you have with them. Just because a refinance company is nearby, though, doesn’t mean that you shouldn’t hold them to the same standards as other companies. Dig deep to ensure that they have a topnotch reputation; check with the Better Business Bureau to make sure that there are no negative reports on their record. At the end of the day, you may discover that the best refinance company is within easy driving distance of your home.
This is especially important in the post Great Recession lending environment where lenders have increased their focus on the individual property and on the surrounding community. Some lenders will not make loans in certain areas, making it more important to find the ones that are actually active in your area.
Compare Apples to Apples
When you find what you think is a great company offering you a great rate, make sure that everything that they offer you is as good as you think it is. Looking at their annual percentage rate (APR) instead of the interest rate will help you to do this. APRs are an imputed interest rate that includes the cost of any fees, giving you a better picture of the total cost of the loan.
Some other things that you can look out for are the difference between a “no closing cost” and “no cash required” loan. While they may seem similar, the latter loan typically has cash closing costs which just get added on to your loan balance. While you are comparing loan quotes, look at the lock periods. Longer locks typically cost more money, so if everything is equal, the loan with the longer lock will be worth more to you, especially given the long time that it can take to get a loan closed today.
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