Ready to refinance? It’s time to find the right lender. Here are the 5 most important questions to ask potential lenders before you refinance.
What rates can you offer for a no-cost refinance?
If you’re like most borrowers, you might be interested in a “no-cost” loan so your refinance has no out-of-pocket costs. Lenders often advertise their lowest possible rates, which typically don’t factor in the lender credits needed for a no-cost refinance. So while a lender’s rates might look competitive, they actually might not be for the specific type of loan you want. Make sure lenders are quoting you personalized rates based on your specific refinance goal and situation.
What fees do you charge? Do you charge commission or lender fees?
Just like when you got your original mortgage, refinancing will entail fees. Some are mandatory and will be similar across all lenders ( like third-party appraisal fees, credit checks, flood certification, recording fee, title fees, and prepaids). On the other hand, lender fees (like origination, application, or underwriting fees) are all charged by the lender. These fees can add a considerable amount to your closing costs.
What mortgage discounts am I eligible for?
You may think affordable lending programs and discounts are just for first-time homebuyers. However, discounts are often available to experienced home buyers and refinancers. Many lenders just don’t have the tools or incentive to check your eligibility for these programs and pass the savings on to you.
Do you have a price match program?
Your current lender will likely tell you that they can get you the lowest refinance rate. See if they can put their money where their mouth is by asking if they have a price match program.
Can I get a Loan Estimate?
No matter what a lender says, the only way to compare loans apple-to-apples when you’re rate shopping is to get an official Loan Estimate. Unlike a fee sheet (or any other document they may give you), a Loan Estimate is a standardized document detailing all the costs associated with your mortgage.
