How to Find a Bank to Refinance
Choosing a lender for your refinance should be carefully considered decision. Your home loan is likely the largest debt you will assume, and making sure it is the right loan and right lender is critical. There are an inordinate number of housing lenders in the United States, and it can be confusing and frustrating when trying to sift through the offers and programs. A few strategies can be helpful during this process.
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Instructions
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Pull a current copy of your credit report. See Resources for a free copy. You should also pay for a copy of your FICO score (a three-digit number between 300 and 850). Any score over 720 is excellent; any score below 600 is poor. This number will begin narrowing your search.
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Determine the purpose and type of refinance you are looking for. If you are looking for a high-risk loan (e.g., a loan that will max out the equity in the home), you should be looking only at finance companies. If you are looking for a conventional refinance and you have great credit, narrow your search to local banks and credit unions.
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Ask around. The Internet can be an invaluable resource, but first-hand information is better. Ask colleagues, friends and family members about their loans, loan officers and experiences with companies. This information will give you a good idea of what to expect.
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Narrow your list to five to ten lenders. Look them up online or call a representative to find out general rates based on your credit score. Do not take any applications at this time--you are just getting information. Also, try to find out what origination and discount fees are charged.
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Narrow your list again to two to three lenders based on rates and fees. Look up all companies on the Better Business Bureau website (see Resources) to make sure they have a solid consumer reputation.
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Choose a reputable lender from the list, making sure the lender will offer the best program and the lowest rate and fees. Submit a loan application with a loan officer from that lending institution.
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