Insider's Guide to Refinancing Your Mortgage

Insider's Guide to Refinancing Your Mortgage

by David Reed


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Product Details

ISBN-13: 9780814409350
Publisher: AMACOM
Publication date: 08/28/2008
Pages: 212
Product dimensions: 5.90(w) x 8.90(h) x 0.70(d)
Age Range: 18 Years

About the Author

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor’s Guide to Financing, and Your Guide to VA Loans. As a senior loan officer, he has closed more than 1,000 mortgage loans. He is a columnist for Realty Times.

Read an Excerpt


Having been in the mortgage business for nearly two decades, I've seen mortgage companies come and go. And I've seen mortgage loan programs come and go along with them.

Technology has made an impact on the mortgage industry. Mortgage loan approvals used to take several weeks to accomplish. Now, it's only a matter of days. Loans are approved using automated systems and no longer need human beings making judgment calls as to the borrower's creditworthiness.

Since loans are so easy to approve and take very little time to complete, the entry-level qualifications for loan officers are very low. Sure, loan officers have to get licensed in the state where they place mortgage loans. But trust me, the licensing procedure is typically nothing more than taking a rudimentary test and getting fingerprinted. There are more inexperienced loan officers in this business than ever before, all trying to get a piece of the "refinance pie."

Because of the ease of mortgage approvals, interest rates don't have to fall very much in order to make a refinance a reasonable proposition. And mortgage companies, in all their glory, can market themselves silly trying to convince you to refinance your loan with them. Heck, there are even classes that loan officers can take to learn how to convince you to refinance your mortgage.

Kids going to college? There's a refinance plan. Need retirement funds? There's a plan. Need to reduce your monthly payments? There's a plan for that, too.

The problem with all that is those "plans" are nothing more than variations on the very same loan program. The only difference: a new sales script has been written to fit the advertisement. And don't get me wrong, these "scripts" can be convincing. Loan officers don't get paid until they close a loan, so you can't blame them for trying to stoke their livelihood. But don't get too excited about those solicitations until you read this book.

Having been in the business so long, I've closed more mortgage loans than most loan officers have. I have also observed how the markets have developed over the years, how loan programs have evolved, and how technology has impacted the mortgage industry.

The mortgage business can be intimidating. Its jargon can be confusing, at best, and deceitful, at worst. Lenders make loans all day long, while you may only get a mortgage a few times in your life.

Refinancing your mortgage takes more planning than when you were searching for a loan to buy your home. When you bought your property, you were focused on the "big picture." You needed to close on time, the property needed to pass inspection, there were property taxes to be paid, and so on. But with a refinance, you're focused on one thing and one thing only: your loan.

Table of Contents




Chapter 1

     What Is a Refinance?


Refinancing Your Home Loan


Types of Refinance Mortgages


Rescission Period


Chapter 2

     Why Refinance?


When to Refinance into a Different Rate


Refinancing the Term


Adjusting the Term to Fit Your Payment


Reasons to Refinance


When Not to Refinance


The Refinance Process in Review


Refinance Loans and Escrow/Impound Accounts


Chapter 3

     Finding the Best Lender


Mortgages: A Commodities Market


Who's Who in the Mortgage Process


Banker, Broker, or Correspondent?


Where Not to Look for a Mortgage Lender


Comparing Loan Choices


The Subprime Nightmare


Chapter 4

     Finding the Best Loan Officer


What Exactly Is a Loan Officer, Anyway?


Seven Questions to Ask Your Loan Officer


Loan Officer Compensation


Qualities of a Good Loan Officer


Changing Loan Officers


Chapter 5

     Finding the Best Interest Rate


Small Changes, Big Changes


Why Inflation Kills Economies


Mortgage Rates and Economic Factors


Rate Shopping


Rate Locks


Chapter 6

     How to Save on Closing Costs


Lender Fees


Nonlender Fees


Negotiating Closing Costs


Origination Charges and Discount Points


The No-Closing-Cost Refinance


Chapter 7

     Predatory Lending, Loan Fraud, and Bad Guys


What Is a Predatory Lender?


Prepayment Penalties


Bad Guys


Loan Fraud






Appendix: Monthly Payment Tables



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