How Do I Refinance My Mortgage?
Refinancing your mortgage is one of those things that may seem like it's difficult, but it actually ends up being quite easy.
Millions of people refinance their mortgages every year. With recent technological innovations, the process of refinancing a mortgage has been transformed and made much simpler.
There are three steps involved in refinancing a mortgage: applying/receiving a quote, choosing a company to deal with and finalizing the transaction.
The first step (applying/receiving a quote) used to be much more difficult than it is today.
The reason? The Internet.
Back in the old days, a person looking to refinance their mortgage would have to call up a lender to receive a quote or ask for a quote in person. Receiving a quote from one lender could take hours, as they would painstakingly request all of your information and then walk through the finer points of the refinancing process.
If you wanted multiple quotes, then you had to be prepared to give up at least a day of your life.
Things have changed now with the Internet.
Receiving multiple competing quotes for your refinance business is a snap thanks to Lendingtree.com.
Lendingtree.com connects borrowers (such as yourself) with banks and lenders.
The process is a simple one - simply fill out a short form and Lendingtree.com will match your details against the hundreds of lenders that they have in their database.
You will then be presented with a number of competing quotes once you have finished your application. You can either choose a company to deal with or walk away entirely. There is absolutely no obligation to refinance your loan with any of the companies that offer you a quote.
The entire process from start to finish should take you no more than 10-15 minutes at Lendingtree.com, and of course it's 100 free.
Next up - choosing a company.
As I mentioned, Lendingtree will present you with a number of competing quotes from major US banks and lenders.
Some people automatically choose the company that is offering the best deal, while other people like to deal with the most reputable company.
Lendingtree doesn't deal with shady companies - I can safely say that all of the companies in their database are of the highest quality. Dealing with shady companies would make them look very bad, so they aggressively filter out any unscrupulous firms from their database.
Lendingtree will tell you exactly how to choose a company with deal with at this point.
Or, you can use the quote that has been provided to secure yourself a better deal at another company. At the very least, these quotes arm you with valuable information.
Lastly, finalizing the transaction.
You need to ask yourself this question - is the refinance going to accomplish my goals?
Is it going to reduce my monthly mortgage payments? Will it result in me paying less interest?
If the answer is yes, then you have likely decided to finalize the transaction.
The company that you are dealing with likely has processed millions of mortgage refinancings during their existence, so the process should be fairly streamlined.
There are a number of documents for you to sign. You will incur costs for lawyer fees, etc.
You will also have to pay a certain number of "points" to refinance - you need to tally all of your potential fees and figure out if the refinancing is still right for you.
My piece of advice for this step in the process - get a good lawyer who will review your documents and explain the process to you. This will make the entire process much less painless for you.
Historical interest rates are currently near all-time lows. This is a great time to think about refinancing your mortgage, and with recent technological innovations, the process is much easier than ever before.
Best of luck, and I hope that you save a great deal of money when you refinance!
Filed under: General Knowledge