Homeowners who are re-financing their home for the first or even the second or
third time must comprehensively research all of the obtainable options to ensure
the best possible interest rate and terms are secured. Homeowners are sometimes
lazy when it comes to re-financing. There may a large drop in interest rates or
a change in the financial situation which warrants a re-finance. Although the
homeowner may be aware that a re-finance is warranted, the homeowner may not be
aware that it sometimes takes a great deal of work to find the best possible
rates and terms.
Homeowners are often persuaded to re-finance with the same lender who granted
the first mortgage or with the same lender who handled prior re-finances. The
theory behind this reasoning is along the same lines as, �If it ain�t broke,
don�t fix it.� These homeowners figure their current mortgage is adequate and
they are happy with the current lender so there is no need to investigate
further options. However, this cavalier attitude can be quite costly for the
homeowners.
When you look for your real estate appraiser, you should look for someone who
comes highly recommended. You can ask family and friends for their opinions, or
search local papers, even the Internet. If you take your time and search for the
best real estate appraiser that you can find � you�ll normally get an appraisal
that is right on target.
Homeowners who are considering re-financing their home should speak to a number
of lenders and obtain rate quotes from each of them. When soliciting quotes the
homeowners should consider all of their available options but should limit these
options to established lender. While a newer lender may be offering fantastic
rates and loan terms it is considered quite risky to go with this type of lender
as opposed to a more established lender.
Homeowners who wish to further explore smaller lenders who do not have an
well-known history should proceed with caution. Unless the lender has trusted
friends or family members who are willing to vouch for the lender, the homeowner
should investigate these smaller lenders carefully. Visiting a website address
is not the best way to ensure credibility. Designing a professional looking
website is a fairly simple process. Most website designers could design and
upload such a website in less than a day.
Friendly Competition
When comparison shopping for the most propitious rates, homeowners should make
it known that they are shopping around for rate quotes and are not making a
decision immediately. Lenders who know they have some competition may be more
likely to offer a lower interest rate than they would if they did not think the
homeowner was considering other options. Although this may not seem quite fair
to the lender, the business of re-financing is a competitive business. Just like
a plumber might offer his most competitive rate if he knows the homeowner is
seeking estimates from a number of different plumbers, lenders are apt to do the
same. They make their money from homeowners and having a homeowner re-finance
their mortgage does not help them out at all financially.
Some lenders may assume that the homeowner is faking and may not offer the best
rate initially. However, if the homeowner rejects the offer and states they have
a better offer with another lender, the first lender may be enticed to offer an
even lower interest rate just to see if they can sway the homeowners. While cost
is certainly important, it is not the only factor to consider. Some homeowners
might re-finance with a lender who offers slightly higher rates if the homeowner
feels as though this lender is more responsive to his needs.
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