15 Things They Don't Want You To Know When Refinancing Your Home Loan Find out how to protect yourself, your credit and your money when seeking to refinance your home loan.
Table Of Contents:
Lender Secrets: 15 important facts they don't want
you to know when refinancing your home.
How to interview lenders
Bargain Loan shopping tips to live by
Know Your Rights
Plus Free Bonus Tips Tools and Resources!
Lender Secrets: 15 Important Facts They Don't Want You To Know When Refinancing Your Home Loan
1. You have a right of rescission.
2. Rates change daily and can drastically alter the cost of a loan.
3. You have an option to lock-in rates up to 60 days.
4. Fees vary from lender to lender so shop around
5. You can Interview your lender before they interview you
6. Lenders should have a list of references or current satisfied customers
at your request
7. You are not obligated to a loan just because you filled out an
8. You should screen all initial contacts by lenders and brokers using the
Better Business Bureau and Mortgage Broker Associations
9. You protect your credit score by accepting a loan shortly after
10. Don't accept the first offer you get.
11. You can negotiate fees
12. No money down loans are not necessarily money saving deal.
13. No cost applications are not what they may appear to be. Expect
fees at closing.
14. Regardless of fees waived keep your eyes on the interest rate and
15. When doing a “cash out refi,” don’t
raise the level or debt you have unless you’re doing home improvements.
If you do, you are at a higher financial risk and credit card companies
may increase your rates.
Mortgage Refinancing Preparation Checklist
Social security number(s)
Name and address of all employers from the last two
years with dates of employment
W-2 forms for the last two years
Paycheck stubs covering the most recent months pay
Bank statements for the previous two months.
Also include institution name, address, account number(s) and balances
for all accounts.
balance(s) and monthly
for all outstanding creditors: i.e., credit cards, car loans,
student loans, signature loans, etc.
Previous addresses for the past two years.
Make and year of each automobile owned or leased, and
current market value if owned.
Other Information That May Be Required:
If you are divorced: a copy of complete divorce
decree along with any amendments.
If you pay alimony or child support: a "friend
of the court" letter saying payment amount and showing the
account is current or 12 months cancelled checks if paying directly to
If you are self-employed, employed in a family
business, a tradesman, your income is based on commissions or you own
rental property: You need tax returns for the past three years complete with all schedules, and a signed year-to-date profit and loss
If your present home is for sale or sold: a
copy of the listing, purchase agreement or closing statement
If you have been renting during the past year: a list
of names and addresses of all landlords (12 months cancelled checks
will expedite your loan process).
If you have had a mortgage or land contract within
the past year: provide the name, address and account number of
lender (12 months cancelled checks will expedite your loan process).
If liquidating savings bonds or stocks for closing:
provide proof of ownership.
For stocks: photocopy of most recent stock
ownership statement or photo copy of stock certificates.
If You Are Refinancing:
Copy of your current homeowners insurance policy
showing dwelling coverage, annual premium and renewal date.
Property tax statement
Exact mortgage balance and escrow balance for
Owner's title insurance policy
If refinancing a land contract: a copy of
the land contract and address of land contract holder.
he most recent months pay
Bank statements for the previous three months.
Also include institution name, address, account number(s) and
balances for all accounts.
balance(s) and monthly
payment(s) for all outstanding creditors: i.e., credit
cards, car loans, student loans, signature loans, etc.
Previous addresses for the past two years.
Make and year of each automobile owned or leased,
and current market value if owned.
How to interview lenders and brokers
To interview lenders ask these important questions? 2. How long has your company been in business? 3. Where are you located? 4. Are you a member of the Better Business Bureau? 5. Are you a member of the Mortgage Broker Association? 6. Are you an Equal Housing Lenders? 7. Do you provide flexible fee programs? 8. Do you provide incentives? 9. Do you consider yourself a consumer oriented service? 10. Will you follow up with all my call and questions? 11. Will you answer all my questions in a timely manner? 12. Do you have a list of references of satisfied borrowers
I can contact?
Bargain Loan shopping
tips to live by
The greatest potential for lower settlement costs arises
where the current lender was the originating lender
Refinancing means taking out a new mortgage with a lower interest rate
to pay off your existing mortgage.
With the advent of low and no-cost refinancing, it's no
longer as important to see if you're going to stay in the house long
enough to pay back the refinancing costs.
In a traditional refinance, insist on a good-faith
estimate of the costs up front, before you give the lender a penny.
Before you refinance, check your credit report for
anything that could foul up a refinance. You don't want to lay out the
money if a credit problem is going to keep you from refinancing.
KNOW YOUR RESCISSION RIGHTS
If you don't like the fees and rates printed on closing papers, consider
starting over. You have three business days from the date of closing. If
you decide to reject the deal, you must notify the lender in writing
within the three-day period. The lender then has 20 days to return your
Although loans tend to close in a timely manner you still want to do all
you can to help it along. When asked to provide information by the
lender give that information as accurately and as quickly as possible. Document
everything that has happened to show that you have completed all of your
tasks in a timely matter. By doing this you show that you cannot be held
responsible for slow loan processing and are entitled to the mortgage
rate you agreed to. If you are worried that your lock-in is going
to expire start a paper trail and show the lender who really
was at fault.
Annual interest rate:
Annual interest rate. Maximum interest rate is 20%.
Mortgage length (years):
Total length, or term, of your original mortgage in years. Most
common lengths are 30 years and 15 years.
Original mortgage amount:
The original amount financed with your mortgage, not to be
confused with the remaining balance or principal balance.
Additional monthly payment:
Your proposed extra payment per month. This payment will be used
to reduce your principal balance.
Monthly principal and interest payment based on your original
mortgage amount, term and interest rate.
Scheduled payment plus additional monthly payment.
Total amount you would save in interest if you made the
accelerated payment until your mortgage was paid in full.
Mortgage payoff calculator:
Find out how much interest you can save by increasing your mortgage
Use this worksheet to prepare to answer typical questions that appear on
the loan rate quote form.
This form does not save. Highlight and print when completed
What type of home do you own?
When did you purchase this home?
Please estimate your home's current value:
The loan balance on your 1st mortgage is:
How much additional cash do you wish to borrow?
What is your current monthly payment?
What is your current interest rate?
Your current mortgage term is:
Do you have a second mortgage?
If you have a 2nd mortgage, what is the current balance?
If you have a 2nd mortgage, how much is the monthly payment?
What is your household's Gross Annual income?
Please estimate your credit history:
Have you had a foreclosure or filed bankruptcy in the last 7 yrs?
Are you self employed?
Many forms now ask for physical identity and health
to answer the following.
Date of Birth:
Coverage Will Be:
Some forms ask about
serious health issues. Answers to these questions do not necessarily
disqualify the applicant from getting a loan, especially
where the second party has no serious longevity or health
serious health issues
Mortgage Rate Search Tools
We surveyed the top Lending Marketplaces online and bring you our five start
winners for mortgage rate search tools.
Better Business Bureau
These marketplaces have
successfully processed tens of thousands of mortgage requests using
state of the art secure identity protection protocols.