Who to Call for a refinance?

by Tom Tousignant

in Blog, Mortgages, Refinancing

For many homeowners, their monthly mortgage statement for their mortgage includes a sales pitch to call in to refinance.  Too many people do this to their own harm.  Right now, if you are paying over 6%, does your current lender really want you to refinance?  Short answer: No, but if you are going to they would rather have you refinance with them than with someone else.

Why would a mortgage servicer to whom you paying 6% interest want to help you refinance to 4.5% or anywhere else?

Since they don’t really want you to refinance, do you think they will really work on your behalf?  Too many times over the last 18 months, I’ve talked with homeowners that were charged $300-$500 to apply for a refinance, only to be delayed and ignored for 60 or even 90 days.  Then, suddenly interest rates have increased, credit scores aren’t high enough, or the appraised value is too low to refinance.  Often, we can help these home owners refinance in a little as 30-45 days with no issues.

An independent mortgage lender has no conflict of interest – if you can benefit from refinancing, they’ll tell you.  With your current mortgage lender, if you can benefit from refinancing, but it hurts them, do you really think they want to help?

“But, they already have all my information”. Guess what, over 95% of all mortgages will be sold to Fannie Mae or Freddie Mac.  Fannie and Freddie need current paperwork – so whether your previous lender has paperwork from last time or not, you will still have to gather up fresh pay stubs, bank statements, W2s and whatnot – regardless of who did your loan last time.

“My current lender doesn’t need an appraisal”.  Neither does any other reputable lender if your mortgage qualifies for a Making Homes Affordable Refinance Program.  This stimulus program allows some home owners who’s mortgage is owned by Fannie Mae to refinance to today’s lower rates without an appraisal.

“They told me it was easy”.  Sure it is, if you make it easy for them.  Realize, when you call, you won’t be talking to a local mortgage professional in Charlotte – you will get a call center employee earning low wages that really doesn’t care if you refinance or not, they are just watching the time clock until they can go home.  Do you really want to trust something as important as this to a call center that will connect you to someone else everytime you call in?  And, if it gets too difficult, you might stick with your current higher interest rate – even better for your lender than a new loan is.  Sounds easy for them, not for you.

Which loan is right for you?  The call center employee you talk with has no idea what loan you should get.  Shouldn’t you work with someone who can show you the various options and the financial impact to you over time of the different loans you have available to you?  A local, independent, mortgage professional should be able to show you the total cost over time of a new loan compared to your current loan.  If your loan representative doesn’t – quite frankly, you need to find someone who can.  Consider talking with a Certified Mortgage Planning Specialist to get the best advice on your next loan.

So, who should you call?

1.  Try the person that helped you with your last loan, if they are still in the business, were trustworthy and reliable last time, and gave you good advice

2.  Find a CMPS in your local area at the CMPS website.

3.  Ask a trusted advisor, like your Financial Planner, Real Estate Agent, or CPA who they would  recommend.

4.  Email me – and I, or someone on my team,  will help you in North and South Carolina, or, we will refer you to a professional elsewhere in the US.

You can always call your current mortgage servicer, but just remember, they really don’t want you to refinance – as they are watching their bottom line, not yours.

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