Refinancing your mortgage may be very beneficial to your personal finances. The best way to make sure that you are able to enjoy the full benefits of a home loan refinance, do your homework before you choose a loan program or mortgage lender. By taking the time to conduct proper research on the front end, you can position yourself to pursue the most beneficial refinancing options.
Don’t stick with the first lender you come across without shopping around. The first lender may very well have the best deal, but you won’t know that until you compare. Check out several providers and make concrete comparisons between total payments for the amount financed over the same loan period, so you can identify who really has the most cost-effective loan program.
Look for Good Customer Service
You don’t want to be stuck with a lender or that provides poor customer service. Make sure that the companies you are thinking about working with make excellent customer service a priority. Companies that don’t treat you well when you are a prospective customer certainly are not going to provide good service once they have a lock on your business.
Find Out the Total Cost
Make sure you find out the details of all fees associated with refinancing . Don’t fall for promises of low fees and the best rate without finding out the exact amount of all associated fees and the interest rate. Make sure you know the exact amount you will have to write a check for each month before signing on the dotted line for a home loan refinance.
Evaluate the Lender’s Website
Before you enter personal financial information into an online form to apply for refinancing online, take a good look at the company’s website. Make sure that the website is appropriate for a legitimate lender. Verify that it is professionally written and easy to navigate.
Avoid Agreeing to Arbitration
It is not advisable to enter an agreement with a lender that requires the use of arbitration to settle any disputes that might arise. If you agree to mandatory arbitration, you are forfeiting many of your legal rights in the event a legal dispute related to your loan arises.
Find Out About Prepayment Penalties
If you are planning to pay off your refinanced mortgage early, you should avoid selecting a loan that includes a prepayment penalty. Some loans can be paid off any time without any type of penalty. At the opposite extreme, the terms of some home loans allow lenders to charge as much as six months of interest fees on as much as 85% of the original balance of the loan.
It isn’t hard for borrowers with good credit to qualify for loans that don’t have prepayment penalties. However, if you don’t ask and verify the terms of your contract, you may be in for an unpleasant surprise if you try to pay your mortgage off early.