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When To Consider Refinancing Homes

Pick the right time.

O.K. you've got your mind made up. You're Refinancing! Here's the basic steps you should take to make sure you get the best deal:

1. Check Your Credit Score-

This will give you an idea of how bad they are going to want your business. You can check your score at about a dozen web sites. It will cost you about $15.00. I'd recommend one, but I have only used two places. Myfico.com and Equifax. Neither experience was outstanding.

If you have a score below 620, the mortgage lenders are not going to want your business and charge you a higher rate. If you have a score above 700, you can really pick and choose from the best rates available.

2. Contact at least 6 mortgage lenders-

There are three types of lenders out there.

A. Direct Lenders- Your local or national bank. The money is coming out of their pockets. They usually resell your loan after a few years.

B. Mortgage Brokers- They are the "middlemen or middlewomen" that everyone talks about. They do not lend their own money, but they account for 60% of all home loans. You fill out one application and they shop your loan around. Don't be fooled into thinking these people have your best interest in mind. Most times they have at least a dozen offers, but only disclose two or three to you. Guess what those are the best loans for them, not you. Treat these people like sleazy car salesman. Keep telling them that they have to do better. Eventually they'll have to show you the better offers.

C. Mortgage Bankers- They loan their own money, but look to dump the loan to another company ASAP. They can be very helpful when you have a unique situation. In many cases, they may be the holder of your loan for less than year.

Who do you go with?

Check them all out in many cases one of them needs to meet some kind of quota and you can make out well.

Things to avoid:

Never pay points when refinancing homes. Points are not deductible when refinancing.

 

Brady
Thank you so much for this info. You guys seem to have everything I need to figure out what I need to do. I plan to refinance my house in a few weeks here and when you have a site like this to help out, it's perfect. Thanks again!
Brady at at 10:02AM, 2011/07/20.
Kory
That's not just the best answer. It's the bestest answer! I have been looking at retirement forever. It seems like I will never have it right. I'm just too afraid to think about this stuff.
Kory at at 02:16AM, 2011/09/02.

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