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For many homeowners, refinancing a mortgage can save them significant money, considerably reducing their monthly payments. It can also give them breathing space to pay off debts or allow them to make other investments, pay for college, or finance home improvements. An Insider’s Guide to Refinancing Your Mortgage is dedicated to an often-misunderstood aspect of mortgage lending: refinancing a mortgage loan. Readers will learn why to refinance, when to finance, as well as how to find the best lender, loan officer, and rate. Mortgage expert David Reed takes readers step bystep through the refinance process and shows them how to evaluate their current loan program and compare it with other options. By following Reed’s invaluable advice, homeowners will learn:
when a refinance is right for them
• how to lock in the absolute lowest rate at the lowest cost
• how the mortgage process works from the inside
• how loan officers get paid
• how to identify and avoid predatory lenders
• how to negotiate closing costs
An Insider’s Guide to Refinancing Your Mortgage will save readers money and heartache when negotiating a loan.
|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
What Is a Refinance?
Refinancing Your Home Loan
Types of Refinance Mortgages
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
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
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
Finding the Best Interest Rate
Small Changes, Big Changes
Why Inflation Kills Economies
Mortgage Rates and Economic Factors
How to Save on Closing Costs
Negotiating Closing Costs
Origination Charges and Discount Points
The No-Closing-Cost Refinance
Predatory Lending, Loan Fraud, and Bad Guys
What Is a Predatory Lender?
Appendix: Monthly Payment Tables