Home Mortgage Refinancing Strategies: Signing Tips and Negotiating Strategies

Home Mortgage Refinancing -- Step One

Your first step in negotiating your refinanced loan is to watch for scam artists and unscrupulous lenders. The reason for this is the bad lenders don’t want to negotiate—they don’t have to, either. For ever person who walks away from the predatory lender, there is another waiting at the door to be duped. Don’t be one of the ones at the door.

Home Mortgage Refinancing and Your Credit Report

One of the first things you should do is ask to see the credit report that the lender has pulled. That way you have the same in formation, and if the lender comes back later claiming a poor credit score, you have a reason to walk. Although lenders are under no obligation to show you the report, you should consider another if they refuse to share it.

Watch Out for a So-Called Home Mortgage Refinancing No Cost Loan

Watch out for the supposed no cost loan. All this really means to most lenders is that you will have no costs at closing. What they often do to make up for this is charge a higher interest rate. If you refinance with the lender who holds your original mortgage, try to negotiate the fees and interest rates with them. They may be willing to do it for your loyalty and continued business.

Home Mortgage Refinancing and Your Current Lender

In fact, if you’re happy with your current lender, there is no reason why you shouldn’t contact them first about refinancing. Tell them the loan products you are interested in, and make sure they know you’re aware that they won’t have to have all of the paperwork reprocessed. Much of what you did for your first loan is still current, so there is no reason to charge you fees for services you won’t need. A good lender will agree. Get them to reduce or eliminate as many of their fees as possible, then begin discussing loan products.

Home Mortgage Refinancing and the Fees and Costs

This brings to mind that all those interested in refinancing should ask for a breakdown of fees upfront, before they even consider details like the APR. Many companies don’t include fees in their information. If you ask for this and know fees ahead of time, you have more bargaining power on the interest rate. Any good lender will not hesitate to give you the list of fees—if the company says no, shop elsewhere.

Home Mortgage Refinancing and the Payoff Letter

If you use another lender, remember that you will have to get a payoff letter from your previous mortgage company. This tells the new lenders what will be required to pay off the old loan. Sometimes that original lender will call the homeowner and offer them other advantages to refinance with them. Although that might sound good, the borrower will lose any fees already paid to the new lending company. This is another reason it pays to try your old lender first—if they didn’t give you satisfactory results before, you won’t have to worry about them later.