How to Avoid a Rip-Off Mortgage
Refinance
A
common mistake consumers often make
when looking into doing a mortgage refinance is rushing
through the process and not taking the time to ensure
that everything is done right and done
well.
Remember, the person on the other side
of the desk is just as liable to make mistakes as you would be,
if you did your own refinance.
Professionals who perform your typical refinance are given
far too much trust. Consumers do not realize one very important
thing about mortgage brokers – they hold all the cards. The
lender only has but so much say in your mortgage refinance. In
the end, it is your broker who determines the terms, the rate,
and everything else you agree to.
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Don't be Fooled by
Mortgage Refinance Sales
Gimmicks
For those of us who have
been involved with the
industry, listening to and
watching mortgage refinance
commercials is nothing short of
torture. The most painful part
is knowing that most people
will actually fall for the
sales gimmicks such as interest
rate, zero points promotions,
and every other
may-as-well-be-Greek-to-consumers
term in mortgage refinance.
Flat Out Lying
The worst part – not a lick
of it is true. In fact, some of
that banter is flat out lies.
Take for instance those
mortgage refinance commercials
boasting “zero points.” It is
really sad that a consumer
would ever think zero points
are a good thing to have on
their mortgage refinance.
Points are your friend – you
want to spend the extra few
thousand dollars now to save on
your rate and save tens of
thousands later, trust me on
this one!
Secondly, the interest rate
is not the most important
aspect of your mortgage
refinance, or any loan for that
matter. The biggest factor
which determines whether you
are getting ripped off or a
good deal is the rate at which
you pay. In other words, if the
lump sum of interest you owe is
not recalculated when you make
a payment, whenever that might
be – today, next week, twice a
month, or any other unscheduled
time – then you are getting
ripped off.
Last but not least, when you
sit down with your financial
professional to look over that
mortgage refinance, pay very
close attention to the fees you
are being charged. You can
demand them to remove any fees
paid to the person preparing
your mortgage refinance, since
they are getting paid by the
lender – you don't have to pay
them too.
Just don't push this
subject before they have picked
(read: told you) your interest
rate. They might get greedy and
force you into a higher
rate.
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Pick an Honest Broker
Although they are a rare breed, you need to pick an honest
person. If your accountant has always treated you well and
looked out for your best interests, then they are likely a very
good resource to get a referral.
Typically in the professional world, birds of a feather
flock together. So if you have a trusted financial professional
in your life, they have likely already associated themselves
with someone you can trust to perform a mortgage refinance.
Look to people you can trust in the financial industry before
your friends or family, even though it may seem cold.
Read the Fine Print
Don't be afraid to take the paperwork for your mortgage
refinance to an attorney or trusted financial professional
before you sign it. There are a lot of tricky little ways a
mortgage broker can get more money out of you than they
absolutely must, and they are exceptionally hard to spot
because brokers are so well trained in making every fee look
legitimate.
In a nutshell, look at everything to do with your mortgage
refinance with a great deal of skepticism. The system is not
set up to operate in your favor. You cannot blindly trust the
person doing your mortgage refinance – but you can make it
difficult to be a victim of greed on your next mortgage
refinance.
Extra Info
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