Things You'll Need:
- Credit report
- Banks
- Credit Unions
- Mortgage Company
- Mortgage Broker
- Spreadsheet or notebook
- Internet
- Newspaper
- Telephone
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Step 1
Obtain a copy of your credit report from the 3 credit reporting agencies (Equifax, Experian and TransUnion). First make sure the reports are accurate. If there are discrepancies get these corrected. Don't panic if there are negative items in your report. If there is a good reason behind late payments, like health issues or emergencies, this can be explained to the lender and if you can prove that you are a good risk, you can still get a good interest rate.
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Step 2
You will be shopping around with many different lenders to compare costs and terms and negotiate the best mortgage deal. Get a notebook or create a spreadsheet on the computer to record all the information you obtain in your comparison of lenders for your home refinancing.
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Step 3
Mortgage loans can be obtained through several different sources including banks, credit unions, and mortgage companies. A mortgage broker can also get you a home loan, by negotiating with the banks, credit unions and mortgage companies for you. Mortgage brokers do not lend money directly but they do have contacts with multiple sources and may be able to negotiate the best deal for you. Make sure you know whether or not you are dealing with a mortgage broker, because they charge an additional fee for their services. Some banks and credit unions have mortgage brokers in-house and you may not even be aware that they are using one.
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Step 4
Contact each potential mortgage lender and obtain the following information for your comparison spreadsheet: Current mortgage interest rates and whether it is a fixed rate or adjustable, annual percentage rate (APR), points quoted in a dollar amount that you will actually pay, loan origination fees, mortgage broker fees, transaction fees, closing costs, down payment, PMI.
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Step 5
Now that you have filled out your spreadsheet with all of the data you have gathered from banks, credit unions and mortgage companies/brokers on your list, it is time to negotiate. Contact each lender and negotiate the best deal, comparing each lender on your spreadsheet. Ask each lender to reduce or eliminate some of the costs. Ask if they can give you better terms.
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Step 6
Once you are happy with your negotiated mortgage, ask to lock in the deal. Sometimes you will be charged a fee for this which can be refunded at closing.
Comments
Limowreck said
on 7/10/2008 This is excellent information. Very well written article. Thank you.
writetruth said
on 7/10/2008 Wonderful information and so important. 5 Stars!