Refinance Home Loan

If you are in the market for a home mortgage refinance loan, there are several things you need to know to avoid overpaying. Careful comparison shopping will help you avoid 90% of the mistakes homeowners make when refinancing their mortgage loans. Here are several tips to help get you started with a home mortgage refinance loan.

Mortgage refinancing can save you thousands of dollars when done correctly. When comparison shopping for a home mortgage refinance loan, it is important to compare lender fees, closing costs, and interest rates using the Good Faith Estimate. Many financial advisors tell you to pick a mortgage based on the Annual Percentage Rate; however, the APR does not give you enough information to make an informed decision.

Origination fees are paid to the Mortgage Company or broker that completes your home mortgage refinance loan. Your home mortgage refinance loan origination fees should not be higher than 1-1.5% for a home you live in. If you are refinancing an investment property you can expect your origination fees to run 2-2.5%.

The 2007 limit for traditional mortgage loans, also called the “conforming loan limit” is $417,000. If your home mortgage refinance loan needs to be greater than this you will need a jumbo mortgage loan. Because these loans come from non-traditional mortgage lenders you can expect to pay a higher interest rate for the financing. If you currently have a jumbo loan and owe less than $417,000, you should refinance as soon as possible as you will qualify for traditional financing.

The best reason for mortgage refinancing is to pay less in finance charges by qualifying for a lower mortgage interest rate. If your financial situation has improved since you purchased your home, you may qualify for a better mortgage interest rate. Because Mortgage lenders all have different ways of evaluating your credit, requesting quotes from five different lenders will give you five different interest rates. This is why comparison shopping for the most competitive home mortgage refinance loan is so important.