Have you gotten a call or 2 recently from a mortgage company with the GOOD NEWS that Mortgage Interest are at an ALL TIME LOW and that you really should refinance your mortgage NOW to take advantage of these LOW RATES?
There’s a reason they are calling.
Mortgage rates ARE at all time LOWS . . .
AND
If your current rate is higher than 5%, it may make sense for you to refinance your mortgage . . . It could literally save you HUNDREDS of dollars EVERY month.
BUT BEWARE!
Before you start the process with just any ole lender who happens to cold call ya as you’re about to sit down with the family for dinner, consider the following:
- Not all of these callers are calling you solely in YOUR best interest – Some are “opportunistic” and perhaps a wee bit loose with the numbers
- TRUST but VERIFY – If you like the person who calls, engage in the conversation, but VERIFY what you hear – Ask questions like:
- What’s your rate for 30 year fixed rate mortgage?
- What’s your rate for 15 year fixed rate mortgage?
- Will you charge Discount points or Origination Fees? How much?
- Will you send me a Good Faith Estimate so I can see the numbers?
- Why did you call me? Where’d you get my number?
- Seek advice from a LOCAL Professional REALTOR or Mortgage Lender before doing ANYTHING. If you don’t know a local REALTOR or lender, ask friends, family, work associates, or your local banker (Or contact me & I’ll find one in your community).
What’s the Problem?
Why Beware?
Here’s the skinny!
- Lenders can buy lists of people who hold mortgages over a certain % in their market so they can solicit their business. There’s nothing wrong with this practice whatsoever because they have a REAL opportunity to HELP these folks by reducing their mortgage rates.
- The caveat is that some of these lenders may quote higher rates than are actually possible in the market. I had 3 calls from clients yesterday who had all been called and offered a 4.5% rate to refinance their 6.5% rate . . . that is a great savings and sounds like a great thing . . . EXCEPT . . . The rate available from 3 lenders I know was @ 3.875% for the same mortgage . . . .625 % LESS . . . That cold calling Lender is banking on the average person not knowing the difference.
- Some of these lenders may also charge exorbitantly high FEES in the form of origination fees, discount points, and/or what we in the industry affectionately call “junk fees”
- It’s not always advantageous to refinance a mortgage. Before deciding to do so, seek the advice of a financial adviser (Personal Banker) who can look at your overall financial picture.
- What PRODUCT will you refinance with? Do you know which loan product is the best fit for your financial goals? 30 Year fixed? 15 year fixed? an adjustable rate? a 1st and a 2nd? How will you decide? or . . . will you take whatever mortgage the caller you don’t know personally SELLS you?
Now! I’ve got no dog in this hunt other than a personal dislike for what I believe to be self-serving, predatory, opportunistic, capitalizing on naivity and ignorance of the general public practices of some people out there.
If you’re going to fiddle with your mortgage loan, PLEASE consider all of the above and KNOW what you’re getting getting yourself into BEFORE you get yourself into it.
The best way to do this is to seek the advice of a Real Estate or Mortgage Professional who you KNOW and TRUST before you take action.
I would venture to say that this is one project you do NOT want to DIY (Do it Yourself) . . . the learning curve is simply too steep and the environment shifting far too quickly for the average person to keep informed.
Having said all of the above:
- If you plan to stay in your current home for 3 or more years, NOW may be the OPTIMAL time to consider refinancing your current loan
- (For Middle Tennesseans) If you have EVER thought about moving but have been waiting for the market to improve, NOW is the PERFECT time to get this process started. We believe Nashville’s MSA Real Estate Market has “Bottomed out” meaning that house values will soon begin (and have already begun in some areas) to creep UP. Every day you delay, you will potentially be able to buy less house for your money.
- On the flip side (Selling a house), our inventory of available homes in most areas is decreasing and many of the houses currently on the market are now “stale” . . . This market is CRAVING new Listings. NOW is a GREAT time to put a house on the market because the buyers are hungry for something new and fresh to view . . . and rates are great 🙂
Last word: Would you like to do YOUR part in Stimulating the Economy and helping your community climb out of the local recession?
Your best action would be to Sell and Buy a house!
Just sayin’
Best,
b