How To Pick The Right Lender When Refinancing A Mortgage

You know that refinancing your mortgage will enable you to lower your mortgage payment, reduce your monthly expenses, save you thousands of dollars over the lifetime of your loan and maybe even shorten the amount of time it will take you to pay off your mortgage. All of those developments would put a few more dollars back in your pocket at the end of each month. Now you just need to get a loan. To get a loan, you need to find a lender. While walking into the local bank and asking for a loan may help you reach your goals, putting a little more effort into the process is likely to be time well spent.

Finding the Right Lender

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Banks and credit unions are the entities that most often come to mind when homeowners think about obtaining loans, but they are not the only potential sources. Consumer finance companies, savings and loan institutions and other entities also offer mortgages. Sorting through the large variety of lending institutions and offerings available in the marketplace is well worth the effort. Taking the time to choose the right lender can make a big difference in the amount of money you will spend in fees to obtain a loan as well as in mortgage interest over the lifetime of the loan.

When beginning your search for a lender, keep in mind that loan officers get paid off of the transaction that you make. That doesn't make loan officers bad people, it just means that you should do a little work on your own to make sure you understand the full variety of available options in the marketplace and the pros and cons of each of them.

Mortgage brokers can help you compare the services of many lenders and work to secure you the best rate. They are paid a fee by the borrower (that's you) to provide assistance with finding a mortgage and facilitating the loan origination process. They are also paid a fee by the lender in exchange for bringing business to that lender. Like bank loan officers, making a sale is how they get paid. Here again, a little knowledge and some comparison shopping are likely to serve you well. A small difference in your interest rate can add up to huge savings over the term of your mortgage. And, as with many traditional financial services, there are now several online tools available to help you avoid broker fees.