Recently, I have been going through the refinancing process. Much like selecting a mortgage, it’s not exactly a fun process. But, based on experience, here are a few tips to help you navigate through the weeds of this complicated process.
- Be careful about Lending Tree. I actually used them to make contact with mortgage companies, initially. But, beware. People will hound you. They will call and call and call. You seemingly can’t get rid of them.
- Use Bankrate.com for research. This is a really good site that breaks down the rates that particular lenders are offering. You can use some of those rates as bargaining chips in the process.
- To track mortgage rates, use Mortgage News Daily. In the period before you lock, I found this to be a particularly valuable resource to get a gauge on where rates are going.
- Check with your bank to see what rates they are offering. You might have an easier process with your bank or current mortgage company – since you already have a relationship.
- Other forms of debt can also be paid down via a refinance. Don’t be afraid to roll in student loans or credit card debt into this process. At present interest rate levels, it’s a good way to get rid of debt at a low interest – debt that the interest is deductible on.
- Talk with any mortgage company about the speed to close and what the process looks like. You don’t want to drag the process on too long. Speed to close is an important part of your decision.
- Locking period. Get clarity around what constitutes a rate “lock”. Can you get out of a lock? What does it take to lock? Can you get a floating lock over the period of the window between application and closing?
- Appraisal. It’s helpful to the appraiser to lay out a case. It’s helpful to point out things to an appraiser – like particular comps that need to be included or a “fire sale” in your neighborhood that might be lowering the value of your home.
These are just a few tips I have picked up through the school of hard knocks in this process.