Comparison Shopping When Re-Financing

When it comes to money nobody wants to pay more than they should for anything. This certainly is true when refinancing an existing mortgage loan. Householders who are re-financing their house for the first or even the second or third time should thoroughly search all of the available alternatives to ensure the best possible rate of interest and terms are secured. Householders are sometimes lazy when it comes to re-financing. There may a large drop in rates of interest or a change in the financial situation which warrants a re-finance. Although the householder perhaps aware that a re-finance is warranted, the householder may not be aware that it sometimes takes a great deal of work to get the best possible rates and terms.

Householders are often inclined to re-finance with the same loaner who granted the original mortgage or with the same loaner who handled prior re-finances. The theory behind this reasoning is along the same lines as, “If it ain’t broke, don’t fix it.” These householders figure their current mortgage is adequate and they’re happy with the current loaner so there’s no need to look into further alternatives. However, this cavalier attitude may be rather costly for the householders.

Try All the Options

Householders who are considering re-financing their house should contact a number of lenders and get rate quotes from each of them. When soliciting quotes the householders should consider all of their available alternatives but should limit these alternatives to established loaner. While a newer loaner perhaps providing fantastic rates and loan conditions it’s considered quite risky to go with this type of loaner as opposed to a more established loaner.

Householders who want to further look into smaller loaners who don’t have an established history should proceed with caution. Unless the loaner has trusted friends or family members who are willing to guarantee for the loaner, the householder should enquire these smaller loaners carefully. Visiting a site address isn’t the best way to ensure credibility. Designing a professional looking site is a fairly simple process. Most site designers could design and upload such a site in less than a day.

Friendly Competition

While comparison shopping for the most favorable rates, householders should make it known that they’re shopping around for rate quotes and are not making a decision immediately. Loaners who know they’ve a few competition may be more likely to provide a lower rate of interest than they’d if they didn’t think the householder was considering other alternatives. Though this may not appear quite fair to the loaner, the business of re-financing is a competitive business. Just like a pipe fitter might propose his most competitive rate if he knows the householder is seeking estimates from a number of different pipe fitter*, loaners are apt to do the same. They make their money from householders and having a householder re-finance their mortgage doesn’t aid them out at all financially.

A few loaners may think the householder is bluffing and may not provide the best rate initially. However, if the householder rejects the offer and states they’ve a better offer with another loaner, the first loaner perhaps enticed to provide an even lower rate of interest just to see if they may sway the householders. While price is certainly important, it’s not the only factor to consider. A few householders might re-finance with a loaner who proposes slightly higher rates if the householder feels as though this loaner is more responsive to his needs.