Should you refinance your house with the random mortgage company offering you what appears to be too good to be true? Maybe…read on.
One of the things which play in the mortgage industry is lenders popping up at of nowhere when interest rates drop. Quick buck companies that solely rely on refinance activity arrive out of the woodwork luring customers into the commodity trap. A solid mortgage company should be able to support both refinance and purchase loans at a high level, maybe even gear their business towards purchase activity. Closing purchase loans require a strong adherence to communication as purchase loan are date sensitive. It is the same way an established realtor represents both buyers and sellers. You want the same in a lender. By working with a lender that caters to both, you can rest assured they have the operational support from a consumer experience standpoint to offer you world-class service (yes even during COVID) as well as clear communication.
Here are some things you might want to give some consideration to when selecting the right mortgage lender to handle your home loan project…
Most borrowers taking on mortgages in America need some degree of guidance in terms of the structure of their loan, how to select the best interest rate, how to go over the most appropriate recapture frame. Arguably, most people would be better suited from working with a consultant then they would just picking a product from a computer screen to speak.
Presently the mortgage industry is experiencing historically low mortgage rates brought on by COVID 19 pushing interest rates on fixed-rate mortgages under 3% and heading towards under 2.5% percent on 15-year mortgages. The present mortgage rate environment is unprecedented and almost every mortgage company America is presently at capacity with volume. Loans that used to take 30 days for are now taking 45 days.
Now for the anomaly mortgage
123 mortgage company offering a no points no fees loan, sounds too good to be true right? Well, many times the tiny fine print at the bottom of the offer says specific loan size, specific credit score it says the specific scores, rate as of “date.” This ladies and gentleman is your red flag.
Here is why…
If your score is 739, not 740, the rate and terms may end up being different.
If your loan size is smaller say $150,000 for example, the rate and terms may end up being different.
If your income doesn’t support your desired new mortgage payment, the rate and terms may end up being different.
Do you see the inherent problem with ads that offer a specific rate and term? It is a hook or at least it can feel like it is if you especially if the term and rate you are offered is different than what you saw in the advertisement in the first place. A morally ethical lender ought to give you a range of rates and costs, with the specifics coming AFTER you apply, so they know what your financial scenario supports, and what investor will give you the most favorable combination of rate and fees.]
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