Regardless of how long you’ve owned your home, you might consider refinancing to take advantage of lower interest rates.
After deciding to refinance, the next decision is: Do you refinance with the same lender you have, or do you find a new lender? Are you satisfied with your current lender? Did you have a good experience with them and are you happy with their customer service? If not, it might be time to consider a new lender for your refinance.
While you might think it will be easier and faster to go with the lender you currently have, take the time to compare their offer with other lenders to be sure you’re moving forward with the best deal.
Before you begin contacting your existing lender or any other lenders for quotes, there’s information you want to have on hand in preparation.
- Current mortgage payment
- Current interest rate
- Property taxes
- Insurance payments
- Mortgage origination date
- Credit Score: NOTE: if possible, provide an estimated score. The lender will run your credit for an actual score once you apply.
- Home appraisal. You might be able to acquire this by having the agent you originally worked with run a comparative market analysis. This will save money as the alternative is to pay for an appraisal.
Once you have all of the above handy, it’s time to call around for quotes. As rates fluctuate day to day, be sure you’re getting quotes from various lenders on the same day.
If you’re considering using your current lender, take quotes you receive from other lenders and bring them to your lender. Often times your current lender will be able to offer allowances by refinancing with them, such as waiving an appraisal inspection. They might also be able to streamline the process, giving you a quicker closing date than new lenders, since they’ve worked with you in the past and have your basic information already.
Once you have all of your quotes in hand, take the time to review each one carefully. Compare the fees associated with each one and understand what each fee means. Origination fees might be listed on a quote from one lender; however, another lender might list that same fee as an underwriting fee or processing fee. Make sure you know the terms of each quote, as well as the closing costs and interest rates associated with each.
Without getting quotes from various lenders, you really won’t know if you’re the getting the best deal. Many people don’t bother speaking with various lenders because they find the whole ordeal overwhelming and time consuming. However, when you do take your time and compare rates and incentives before making your decision, you will find you could save a substantial amount of money, leaving cash in your own bank account at the end of each month.