1. Don’t look at just the rates, but at all the numbers.

It’s not only the interest rate what makes a loan attractive, but many different numbers: Closing costs & fees can make a cheap loan very expensive. Compare the APR (closing costs and interest rates) to get an idea about a loan’s cost.

2. Compare as many online lenders as you can.

To get the best rate, you need to look at many online lenders and not only the favorite ones. This includes lenders you never heard about. A good start is a mortgage broker site! They bring together many online financing companies with competitive packages, multiple bids, etc. This way you can compare and pick the best online lender. Besides that you should search for recommended lenders as well.

3. Give yourself enough time.

Searching for a refinance lender shouldn’t be done in a quick way, because so much money is involved. Therefore it’s important to give yourself enough time to go through all numbers. The application doesn’t take longer then 15 minutes to fill out. Next you will receive your loan contract within a couple of days. A few weeks later you can enjoy lower rates on your new mortgage.

Mortgage junk fees are all lender charges (not points) paid in advance. They include charges expressed in dollars, like a processing fee, lender attorney fee, endorsement fee, origination fee (one charge expressed as a percentage of the loan), etc.

Info about junk fees is very difficult to obtain early enough to be useful when you look for loans. Therefore, junk fees are very different from points, the other type of lender charge. Points are a direct lender charge expressed as a percent of the loan amount. They are viewed as part of the cost of credit and are showed wherever the interest rate is displayed.  When you are quoted a price on a loan, it includes the interest rate and points. Rarely does it include junk fees!

Origination fees are the worst of the junk fees and are deliberately deceptive. Origination fees are expressed as a percentage of the mortgage, like points, but they are not disclosed as points. Their entire purpose is to allow the mortgage lender to appear to be charging fewer points than is in fact the case!

Itemization confuses borrowers. Junk fees are itemized fees. Financial companies are not required to itemize their charges and only a few don’t. These lenders charge one fee. But most of the rest itemize because lenders believe that they can extract more in total from the borrower this way.

Also junk fees are never locked! When financial companies lock the rate, they commit to a specified rate and points known to the borrower. Lenders do not commit to a specified amount of total junk fees. The Good Faith Estimate (GFE) that lenders are obliged to provide borrowers shortly after receiving a loan application, shows all junk fees but doesn’t bind lenders. They can revise the GFE right up to closing!

Mortgage junk fees are good to know about in order to ignore them. In addition to the points and rate, your focus should be the total of other fees. When you are mortgage shopping, ask the lender for that total in writing, if the lender will lock it at the time he locks the rate and points. Most financing companies will lock it in if you ask for it when you are in a shopping mode.

It probably takes weeks or even months to select your dream home.
Choosing a lender will take much less time, but should be handled carefully as well. There is a difference between mortgage brokers and lending companies: A mortgage broker interacts between the consumer and a lender & may offer services for different lenders. A mortgage lender is a financial company that provides a loan directly to you. A broker many times charges an upfront fee for services provided. Therefore always ask about the fee structure!

If you are buying a home or refinancing, keep following tips in mind when you shop for a mortgage lender:

- Try to learn about the different types of mortgages out there, such as a 30 year or a 15 year fixed rate, adjustable rate mortgage (ARM), balloon, etc. So when you discuss options with the mortgage lender, you will be more likely to pick the best deal!

- Get quotes from several lending institutions or mortgage brokers before choosing one. Get referrals from your friends, family members, realtor who have recently bought (new) homes. Besides that you might want to check the Yellow Pages, newspapers or web search engines.

- Ask for an itemization of closing charges from each mortgage lender before submitting an application form. Inquire about costs on one mortgage lender’s list that are not on others (this may prevent undisclosed costs from surprising you at settlement).

- Choose a mortgage lender who is willing to answer all your questions. Expect the lender to ask questions. Your replies can give important signals about the best mortgage program to suggest.

- Be aware of predatory lending practices like steering customers towards higher interest rates, charging unnecessary fees or adding points without reducing the interest rate of the loan. If you think that you are a target, ask an official at a non-profit agency or legal-aid organization to have a look at the proposed mortgage offer free of charge!

• Household costs are rising;
• Insufficient retirement income. Many retirees depend on Social Security, which often not cover all of their needs;
• Increased awareness about reverse mortgages: TV ads and more mortgage lenders offering reverse mortgages.

Below we will show how a federally insured reverse mortgage works:

• How much you can borrow from a lender depends on your age, current market interest rates and the value and location of your house;
• The government sets interest rates and fees. Unlike other mortgag loans, it’s not a matter of shopping around for the best offer;
• You must undergo mortgage counseling to make sure that this option works for you;
• The re-payment amount can’t be more then the value of your home;
• After the reverse mortgage is re-paid, remaining equity is forwarded to you or your estate;
• The money you borrow from a lender can be used for whatever you want, including prescriptions, home improvement, travel, food, etc.!

Reverse mortgages doesn’t fit everybody. Therefore you must keep following considerations in mind:

• When you take out a reverse mortgage: your debt is increasing and your equity is decreasing. If you leave your home to your children when you pass away, this might be a problem;
• Fees & costs related to your reverse mortgage can be financed;
• A growing number of mortgage lenders are offering their own versions of non-federally reverse mortgages, sometimes with lower fees than federally insured programs.

When you know what every mortgage lender has to offer, get the best deal that you can.  On any given time, mortgage lenders & brokers may offer different prices for the same loan terms to different persons, even that those consumers have the same qualifications. Most likely the reason for this difference in price is that officers and mortgage brokers are many times allowed to keep some or all of this difference as extra compensation. In general, the difference between the lowest available price for a loan and any higher price that the consumer agrees to pay is an overage. When overages exist, they are built into the prices given to borrowers. They can occur in both fixed & variable rate loans and can be in the form of fees, points, or interest rate. Whether quoted to you by a loan officer or a mortgage broker, the price of any loan may contain overages!

Ask the lender or broker to write down all the costs part of the loan. Next ask if the lender or broker can waive or reduce one or more of its loan fees or agree to a lower interest rate or fewer points. You don’t want that the lender or broker is not accepting to lower one fee while increasing another or to lower the interest rate while raising points. Don’t be shy asking lenders or brokers if they can improve terms or can give you better terms than those you have found elsewhere!

Once you are happy with the terms you have negotiated, you may want to obtain a written lock-in from the mortgage broker or lender. The lock-in should include the interest rate that you have agreed upon, the period the lock-in lasts, and the number of points to be paid by you. A fee may apply for locking in the loan rate. This fee may be refundable at closing though. Lock-ins can protect consumers from rate increases while your loan is being processed; if rates drop, for example, you could end up with a less favorable rate. In case that will happen, try to negotiate a compromise with the lender or broker.

You only should consider refinancing when you can lower your interest rate by at least 2%. At the moment interest rates are low, therefore it’s possible that you could save a lot by refinancing your mortgage!

2. To switch to a type of mortgage loan that is better -

If you have right now an adjustable rate mortgage (= ARM), you may want to switch to a fixed rate mortgage (= FRM) in order to lock in a low rate for a longer time. On the other hand, you may be able to decrease your current payments by switching from a FRM to ARM.

3. To avoid a “balloon payment” –

Some mortgages have a large payment due at the end of the loan term (normally after 5-7 years). You may want to refinance your loan in order to forcome having to pay this balloon payment.

4. Stop paying private mortgage insurance –

A private mortgage insurance (= PMI) is certain cases required by lenders if you had to borrow more than 80% of the home’s sale price. If the home’s value has increased after a while, you can use this amount to refinance and stop paying PMI.

5. To cash out home equity –

Home equity is often used to finance a remodeling project, college tuition, car purchase, a vacation, etc. If your home’s value has increased, you can refinance to cash out this extra amount available.

6. To consolidate the debts I have –

If you have many high interest debts, you can save by consolidating these debts into a mortgage loan: Auto loans, credit cards, second mortgage loans & other debts can be included in your refinance!

Last year many Americans took advantage of low interest rates and refinanced their mortgages. This way saving thousands of dollars over the term of the mortgage loan. Many people wondering if they missed the boat on the refinancing boom. Rates are at near-historically low levels! Therefore it’s still a great time to consider locking in today’s rates for a 15/20/30 year term. Especially when consumers facing an increase in rates from an adjustable rate mortgage (= ARM).Whether a refinance is right for you depends on several factors. Asking yourself a few questions can help you decide whether it’s a good time to contact a mortgage lender.

Some questions are:

• How does the interest rate you are paying compare to today’s market rates? Many consumers never think about refinancing, even though they may be able to save a nice amount of money every month or shorten time from the length of their mortgage by refinancing.

• Do I have any equity? As long as you have equity in your home, you might be able to refinance or go from an adjustable rate mortgage (ARM) to a fixed-rate mortgage.

• Is it possible to move to a more attractive ARM? If you have (almost) no equity or you are locked into an ARM that financially doesn’t give you much space, you might be able to get some breathing room through a longer term ARM, such as a 5 year ARM (which locks in a rate for five years and automatically adjusts after that).

• What are the fees I will have to pay? Refinancing can save you money, but if the savings are not that big, the costs in fees for originating a new mortgage loan may eat up all your savings. Make sure you ask in advance what all the charges, costs, and legal fees will be before you start.
• How can I be sure that I am getting the best rates? In order to ensure you’re making the best refinancing decision possible, it’s good to shop around, by using rate comparison sites like Bankrate.com or Motleyfool.com. One of the easiest ways is to ask for a best-rate guarantee. Some mortgage lenders guarantee that their rate is the lowest in the market at closing date & even agree to pay you a certain amount if they are not the lowest on that particular date.
• If I have extra equity, should I take a bigger mortgage loan? If you are comfortable with a little bit larger payment, you can think ahead: do you plan a new kitchen, bath remodel, or extra room in the coming years? You might avoid the cost and hassle of a home equity loan in the coming years, as well as the risk that rates can rise rise, by taking out a little bit larger mortgage loan & using the additional amount to invest in home improvements.

In order to look at the future with confidence, consider financing your loans with lenders that fit your lifestyle and back up their promises. Not all mortgage lenders are the same and the consumer should take a good look at the rate the lender can provide. Also the reputation of that company is very important. There are companies that will provide you with a different attractive perks like a best price guarantee, a fast & easy application process, a speedy loan decision and a guaranteed closing date. But don’t forget that you always should evaluate the refinance offer in relation to your personal circumstances!

Lenders and mortgage businesses pushing low rate mortgages. Ads on the radio, print ads in the Business section of newspapers tell customers: 1 percent mortgages, $500K mortgage loans only $1,500/month, get into your dream house, etc.

Above sounds very attractive to get a mortgage loans, but now with the adjustable rate much higher & value of houses declining, these people are defaulting! The default rates are rising, the financial institutions who made these loans are in trouble, but realtors are to blame. The radio ads don’t mention that the real rate gets added to the back of the
loan every month, for example a $500k mortgage loan can end up being a $700k mortgage loan after a certain time because the interest is added to the end of the term instead of the beginning, that’s the reason why rate loans are low in the first place!

Home owners get into their house they always dreamed of today, but what happens in five years from now, when the adjustable rates starts? Maybe they have to sell their home lower than what they paid for it and owe more than they think! There are lenders who explain this to customers at time of closing, but those things are often not explained in their radio ads, print ads, etc. Lenders try to close the deal from there!

The increased number of mortgage companies in the US has actually made the market competition fears for lenders. In order to survive in the market they often resort to low interest rates, simple re-payment options, bad credit acceptance and more. The current situation has actually turned the market in favor of borrowers. Borrowers taking advantage of declining and increasingly asking mortgage lenders to help them refinance their homes!

It’s a great time to refinance for a couple of reasons:Rates are low right now and a lot of people have seen appreciation of property values. So consumers have equity in their property and if they have a higher rate or an adjustable rate,  it’s the right time to put things into something more standard (for example - consolidating debt).

Also the tax filing season at the moment means a good time to trade up to a lower mortgage rate!

If you requested both: a mortgage loan and a home equity loan, you can refinance both loans and get only one loan together with a single monthly payment but with the same or better terms than the average of both outstanding mortgage loans. This can be done by applying for a refinance mortgage loan!

Home equity loans (also so called 2nd mortgages), are secured with the same asset as the main mortgage loan. With other words: when refinancing the home loan, you can include also your 2nd mortgage or home equity loan. This can have many advantages like:

• Fewer monthly payments;
• Saving lots of money on interests;
• Receiving lower installments;
• Less overall debt exposure.

Refinancing can save you thousands of dollars on interests! Home equity loans normally come with higher interest loan rates than mortgage loans. By obtaining a lower rate refinance home loan, you will be saving money on your mortgage loan but also saving (even more money) on your home equity loan.

In case of refinancing you will unify both loans and therefore get a longer repayment program & lower monthly payments. The loan installments will be definitely lower than the combination of mortgage loan payments and the home equity loan payments when they are seperately. This will improve and ease your financial situation and income!