| Should I refinance my mortgage today or not ? That is | | | | which will hurt your credit score. It would be best to do |
| the big question these days. With the current | | | | all of your applications in the same month. |
| mortgage rates fluctuating the way they have over | | | | That way your credit score will only be affected during |
| the past few months, many homeowners have been | | | | a one month period as opposed to being affected |
| toying with this question. | | | | over several months, which will hurt your score even |
| Just a few months ago we were seeing interest rates | | | | more. |
| as low as 4.25 % however with the given | | | | Another thing to consider, is how long do you plan on |
| unemployment rate rising, the confidence in mortgage | | | | living in your home? Refinancing a mortgage can be |
| backed securities has declined somewhat, resulting in | | | | quite costly. There can be penalties for breaking your |
| pushing up interest rates past the %5.00 mark. | | | | current mortgage agreement, plus other costs and |
| So the question remains " Should I refinance my | | | | fees involved that can seriously eat into your potential |
| mortgage or not ?" | | | | gains. So if you plan on moving out of your home in |
| If your one of those people who feel they have | | | | the next seven years,it may not be in your best |
| waited too long and missed out on the opportunity of a | | | | interest to refinance your mortgage right now. |
| life time, when interest rates were in the 4.5 %-4.75 % | | | | Banks know that statistically, most homeowners live in |
| ranges, you might be wondering to yourself if you | | | | their home for an average of 7 years, that's why they |
| should just go ahead and refinance now before the | | | | charge most of the interest up front in the first few |
| rates rise up again. Or, you may still decide to hold out | | | | years. This way, they can make the most amountof |
| in the hopes that the rates will drop back down. | | | | profit as possible. |
| Since the markets are difficult to predict, this is a tough | | | | One last thing, if after all consideration is done and you |
| decision to make. However the main question is, can | | | | decide to move forward with a home refinance, make |
| you still drop your rates down by at least 2 | | | | sure that you deal with a broker and not a broker |
| percentage points? If the answer is yes, then there is | | | | bank. |
| still a window of opportunity to take advantage of. | | | | Now what's the difference between the two ? |
| There are some important factors that must be | | | | A broker bank is essentially a regular bank disguised |
| seriously considered before making applications to | | | | as a broker firm. All banks in the US are exempt from |
| mortgage broker companies as well. Gone are the | | | | RESPA laws which govern broker firms in regards to |
| days when someone could just walk into a bank or | | | | ethical practices. |
| mortgage broker and secure a loan with a 650 credit | | | | This means that a broker firm is held accountable for |
| rating with hardly any background check done on | | | | its actions and is required to remain transparent in all |
| them. These are different times. Banks have already | | | | financial dealings with its customers. |
| risen the bar as to qualifying applicants for a loan. | | | | Banks on the other hand , are not held accountable by |
| This is not to say that it would be impossible to get a | | | | RESPA laws that protect consumers from unethical |
| mortgage loan with a 625-650 rating, however, with | | | | practices. They can mark up your interest rate without |
| the rates on the rise it may be difficult to secure a loan | | | | having to explain it to you. You are at themercy of |
| as lenders are becoming more stringent with credit | | | | their unfair practices. |
| ratings and other factors that determine a person's | | | | This is why you would rather use a mortgage broker |
| ability to make payments. | | | | firm instead of a bank. But remember to tell your |
| In order to get the best rates of say 5.21 % which is | | | | broker that you are aware of RESPA laws just the |
| currently the lowest rates available at the time of this | | | | same, this can always be useful when dealing |
| writing, an applicant will need to have a 750 credit | | | | withthem. |
| rating or more to secure the best interest rates. | | | | Hopefully this will give a little bit of an insight in regards |
| Remember if you are going to be making applications | | | | to choosing whether to refinance your mortgage or |
| with lenders, they will perform credit checks on you | | | | not at this time. |