Should you refinance your current mortgage?

People looking to refinance their homes are always looking for a good deal. It goes without saying you’ll want to do the best you can for yourself financially. Get the best combination of rate, price, and customer service. Here are some things that you should give some consideration to when choosing who to work with for refinance of your home.

Let’s say that you purchased your house a few years ago. The lender that you worked with for whatever reason your loan has been transferred a few times and now you’re making your payment to a brand-new servicer. Most mortgage servicing companies typically focus on servicing, that is their bread-and-butter. They don’t typically focus on originating new loans. They might offer it as a service platform but it’s not their primary mode of business.

Do you really want to refinance your house with a company whose focus is servicing loans and not refinancing loans just because they might appear to be a little bit cheaper? That’s for you to decide. But the best rate on the wrong loan might not be in your financial interests. A 15-year mortgage has the lowest possible interest rate right now. That also means that you’re going to pay more monthly because you’re paying down the loan in 1/2 the time of a traditional 30-year loan. Better interest rate but the wrong loan, makes sense? When you’re refinancing your house with your servicer know that their primary focus is servicing loans not creating an originating new loan. As a result, the interest rate that you might lock in while it might appear to be cheaper today, could be expensive in the future if they can’t meet the rate lock. Or, if there’s a rate lock extension such as an appraisal and you have a new loan scenario in the future as a result. The other question then becomes what type of service does this company have? Do you call and get a voice prompt system? Or do you call and get a human? If time is important to you and you need a human.

Does the servicer that you’re refinancing your house with specifically keep that mortgage? More than likely the answer is no. Especially if they bought your loan from another mortgage company. This could be very frustrating for you as a consumer if you keep having to deal with different services. It’s a complete inconvenience for most families having to set up the automatic bill pay every time the mortgage company changes hands. Might not be a bad thing to consider working with the mortgage company who specifically services their loans and doesn’t farm their loans out to another company after the fact. You want a lender that’s working for you and that can pro-actively service your loan. Someone managing your loan and identify opportunities in the future for you to refinance that house again.

At the end of the day, it boils down to customer service, cost, and overall total value. For example, your current servicer is offering 0.1%- 0.5% lower rate. Consider the total package for your financial benefit in determining what makes the most financial sense for you and your family.

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