Mortgage : Home Loans : Refinance : Home Equity Loans

By Ben Afzal

Basics

When you apply for a mortgage refinacne you usually end up wtih several offers.

Each offer usually comes in the form of a written “Good Faith Estimate”.

You can compare your competing offers based on:

• rates
• payments
• prepayment penalty
• closing costs

Rates

This is the most obvious point of comparison. Each good faith estimate lists an interest rate.

When you compare interest rates you need to make sure you are comparing interest rates on the same type of loan.

The interest rate on a 30 year fixed from one lender will be different than a 5 year fixed loan from another lender. This is not a reflection of one lender being more expensive than other. Different loan programs always have different interest rates. Compare apples to apples.

If you are comparing the same loan program (such as two competing offers for for a 30 year fixed loan) you should compare offers from the same day. Interest rates change from day to day, so a loan offer made on Monday from one lender may be different from another offer from a different lender on Wednesday only because rates have changed.

Payments

Your monthly payment is something you will one of your biggest expenses. Make sure it is clear what your monthly mortgage payment is, plus your property taxes, home owner assocation dues, hazard insurance, and any other relevant housing expenses.

Prepayment Penalty

A prepayment penalty can get you a lower interest rate. Decide how much of a prepayment penalty you can live with.

Closing Costs

The good faith estimate will list your estimated loan closing costs. If an offer from one lender seems very low if may be because they left out a lot of expenses on the estimate.

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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This entry was posted on Saturday, October 14th, 2006 at 10:46 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.