If you do a Google search for refinance companies you’re going to get pages and pages of results. You’re also going to see multiple ads for lots of different companies all claiming to do the refinances. They each offer the best deal, the best interest rate, the lowest fees, and on and on and on. The question is, which one really is the best? Or are they all the best and it really just depends on the person? Maybe they’re all awful and you’d be best to run far away from every one of them. In reality, each refinance company will have its pros and cons when compared to the other companies. What you have to do as a homeowner is to determine which company is going to give you the best deal on your refinance, not everybody else.
Your Finances and Credit Score
Before you start really looking into some refinance companies, you’ll want to know where you stand financially. It’s a good idea to pull your credit and get a copy of your credit score. This way you’ll know what types of offers will be available to you, and what type of lender you should pursue. For example, if you have a score that’s fantastic, in the 720 range, you have far more options available to you than an individual with a score in the six hundred range. Why? Because conventional lenders want homeowners with good credit so they offer them lower interest rates and better mortgages – they are considered lower risk and it shows in the offers. This doesn’t mean that an individual with credit in the six hundred range can’t get a loan through a conventional lender. They can, but it will have a higher interest rate and may not be the best option. For these people, federally approved lenders may be able to offer loans that are a little more financially friendly.
Comparing Refinance Companies
After you’ve pulled your credit you’re going to have a pretty good idea of where you stand financially and what types of lender’s you are more than likely going to get the best deals from. At this point you can start comparing quotes from a variety of lenders. Five is a good number to start with. When you get your quotes try to get each quote in the same day or within a two day period. Also, consider getting quotes from multiple types of lenders. Home mortgages can be acquired through large bank chains, credit unions, local lenders, and even online lenders. Each of these lending types will offer a unique set of benefits which is why we recommend getting quotes from each of them. By getting these quotes you will have a better idea of what you are able to qualify for with a home loan.
While you’re out looking for quotes you may want to consider getting some recommendations from your friends and trusted professionals. You want to know that the lenders you will be approaching are reputable and are not all out for themselves. You need to know that they have some investment in getting you the right loan, so a recommendation from a real estate broker or loan officer can hold quite a bit of weight.
Last but not least, while comparing refinance companies consider the length of the loan you need because this will have an impact on the terms of the loan that you ultimately qualify for. When you intend to be in the home short term, say no more than five years, you may be willing to lock yourself into a longer loan or even get an ARM loan in order to reduce the interest rate or lower the mortgage payment. However, when you’ve lived in the home for ten years already you don’t want to get an ARM loan or extend the life of the loan another thirty years so you may want to refinance to a 15-year term. What you need will change depending on your housing and financial situations.
Finding the right refinance company can be a bit of a time investment, but when you’ve done your homework you have a better chance of getting a refinance that will work to your benefit, saving you money monthly and over the life of the loan. That time investment will be worth it to you if it enables you to save thousands of dollars more over the life of the loan then you otherwise would have. It may be a headache now, but you’ll soon be glad you did.