What to Look For in a Good Refinance Lender
Finding the best lender to refinance a mortgage is as important as getting a good rate. Yet, many homeowners don’t know to shop for a mortgage broker because they often focus on the reasons behind refinancing.
In this handy guide, we will investigate how to find the
best lender for refinance services and where you can benefit the most.
Understanding the Rule of Thumb For Refinancing
People often want to jump at the chance to reduce their mortgage payments when interest rates decrease. Of course, who wouldn’t want more dollars in their pocket than paid on interest? So, how do you know when to refinance your mortgage?
The rule of thumb for refinancing is optimally refinancing your mortgage when interest rates are at least 1% lower than your current rate.
Comparing the Cost
In truth, the break-even point is just as important as the “Rule of Thumb.” Refinancing can cost thousands of dollars between the lender’s bank fees and potential lawyer costs. While you may save money in the long run, you may not see the benefit of refinancing until two or three years into your term. That is your break-even point.
For example, lowering your interest rate saves you $1200 per year on a five-year term; however, your legal and lender fees total $4000. As a result, your break-even point is just over three years. On the other hand, if you wait and refinance at an even lower rate, saving $2500 per year, your break-even point is around 16 months.
When finding the best lender to refinance your mortgage, you want someone experienced and knowledgeable enough to advise you on timing the best rate possible.
Comparing the Service
There are two ways to refinance your mortgage: going directly to a financial institution or using a mortgage broker. Let’s look into the advantages and disadvantages of each option.
Financial Institutions
- May offer special incentives or promotions for refinancing directly.
- Give their best rates to long-term, loyal customers.
- You can deal directly with your local branch.
- Offers traditional mortgages and lending options.
- You must visit each branch in person to rate shop between lenders.
- It involves financing fees, some charging more than others.
Mortgage Brokers
- Rate shop for you with traditional and non-traditional lenders
- Find you the best rate possible.
- It may or may not be a local institution or lender.
- Don’t charge the customer a fee; instead, earn a commission from the lender when the mortgage closes.
- Provide personalized service working for you rather than the lender.
Ultimately, it is about forming a reliable relationship with the person helping you with your refined lending services.
Bottom Line: Know Your Target Number Before Looking
Whether you are shopping for a home or refinancing your mortgage, it is essential to know how much your budget can afford. Here are three main reasons why people refinance their homes:
Lower Interest Rate- Consolidate High-Interest Debt
- Access Home Equity for Cash (Renovations, Large Expenses, or Retirement)
Timing your mortgage refinancing can mean lower payments with less directed toward interest. However, when you start crunching the numbers, you may realize that now is not the time to upgrade the kitchen or that it makes more sense to consolidate credit card debt than to continue paying upwards of 24% or more.
Refinance Your Mortgage With Confidence
Your mortgage refinancing shouldn’t be complicated or feel like you need to be a hardcore negotiator. Instead, trust the experts at
EasyMortgageLend.com. Their knowledgeable team has a pulse on the best interest rates and lenders available, ensuring you receive the best lender for refinance and their rates.
Save valuable dollars with hassle-free mortgages from EasyMortgageLend.com today! Begin the application process
online or by calling
647-895-3921 now!
