We’re going to be refinancing our condo soon, I hope. Our current lender is a higher-rate lender specializing in people with poor credit…now that our credit is restored, we want to get a better deal.
I can compare offers from any two mortgage lenders, I think. But to get those offers, I have to start the process with each one, basically, right? And there are tons of them to choose from.
Our mailbox is full of unsolicited offers every day from all sorts of lenders. We have money in two banks. We have a very dormant account with Navy Federal Credit Union (stuck $5 in there a few years ago, haven’t done much since).
Is there some intelligent way to narrow the field? I kind of assume the unsolicited mailbox offerors are not the best deals; they’re combing through the public record for our current lender’s customers.
Should we just nudge each of the two banks, and (if they’ll let us, since we’ve barely been active) the credit union, and take the best of the three?
What did you do?
Thanks for your time and any advice you might care to offer.
I would advise trying a place that has a “one-fee” loan, many other places will advertise a lower rate, but just nail you to the wall with appraisal fees, etc at closing.
I would strongly suggest researching this option before jumping, since working in mtg lending for 18 yrs, I’ve never ever seen anything given away, and anytime costs are advertised as free, they’re built back into a bumped rate and/or w/ stipulations that if you pay off the mtg in less than a specified period of time, 3-5 yrs?, you have to pay them back, and you really don’t know if for unforseen reason, you may have to relocate?
Trust me when I say this, there is nothing harder than trying to “back into the perfect mtg amount” when doing a refinance, as there are too many variables involved, and people often said to me, I only want exactly what I need to take out, not one penny more, not one penny less…I’d tell them I’d do my best, but it was well nigh impossible. If they had enough equity, the only way to ENSURE they didn’t have to come up w/ any $$$ at closing would be to take out approx $1k over estimates, and also trust me when I say I was NOT telling them that to up the mtg amount, which can also happen w/ unscrupulous loan officers who work on commission, and were only until recently selling vacuum cleaners or used cars.
Then, I can’t tell you how many times people had existing escrow shortages that had to be made up at time of closing, had p/offs higher than what they’d told us at application, and decided they didn’t need to make any payments on their existing loans once they’d applied to refinance, AND they’d call and rip me a new one because they had to come up w/ maybe $400-500 at closing.
Can you ask friends and/or co-workers for mtg lenders they trusted or had good experiences w/? That’d be my recommendation. Is there a “home town bank” in your area w/ decent rates?
I just left the employ of the comapny who holds my one-fee mortgage due to outsourcing issues. It was not some mom and pop loan shop, it was ABN AMRO, one of the largest mortgage companies in the US. I didn’t say anything about “free” services, I just said that it is much easier to compare terms of one-fee loans because there’s only (get this) one fee, and they tell you what it is up front. (This fee doesn’t include escrows, which are technically separate fromthe mortgage anyhow. Besides this, I don’t do escrows because it’s much more profitable for me to hold onto the money and make interest off it than to let the bank do it)
A typical mortgage, they will quote you a rate, and won’t tell you about the title fee, the paperwork fee, and half a dozen other fees. It will be a day before closing, and they will tell you “you need to bring $x to the closing” and you will be like “what is all this extra shit?” but you will have already spent money for an appraisal and doc processing etc that no other bank will be willing to use (because it’s really a big scam). This has happened to me with mortgage brokers as well as banks and other lenders. One mortgage agent charged me a 250 dollar escrow waiver fee because I didnt want them to do the escrows. It was no choice for me, either pay the extra 250, or lose 400 dollars in appraisal fees to go somewhere else.
As I said, the one-fee loan process was much simpler for me, and I got a very competitive rate with a very low cost from mortgage.com
One thing to keep in mind is that if you DO have escrows, your old mortgage company can be a royal bitch to you if you don’t refi with them. They can hold onto them for up to 30 days, so you must basically fund your escrow account AGAIN at the refi closing, and then wait to get a check from your old mortgage company. If you’re strapped for cash, this can be a real pinch. Either you have to beg, borrow, and scrape to come up with the money, or you get some cash out of the refi and use it to fund your escrow deposit, effectively losing some of the equity in your house.
ETA: Also, there are no pre-payment penalties or anything on my mortgage. It is in all ways just like any other 30 year fixed rate mortgage, with the exception that I knew what the fees would be up front.
My point about “free” services is that if certain unavoidable fees are not charged to the customer, the bank will have to pick it up, and I know it varied state to state as far as “what is normal/acceptable”, but in NYS, there is the appraisal and credit report fees, which can be ‘hidden’ to be included in an application fee, then title and atty fees, recording fees, and here in NY, mtg tax, which is NOT a tiny fee, varies by county, but ranges anywhere from .50 to 1.00 % of the loan amount.
Any bank that doesn’t disclose title fees, etc, is breaking federal and most state laws, as a signed Good Faith Estimate is required in the file, dated w/in 3 days of application.
I’ve certainly heard of ABN-AMRO…were you in the origination area there, or servicing?