Refinancing

Updated on November 01, 2008
S.M. asks from Garland, TX
10 answers

I have a question about refinancing- For those of you that have refinanced have you had better luck using a bank or a mortgage broker? Any advice would be greatly appreciated.

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D.C.

answers from Dallas on

I had my best luck with a credit union they have the best rates. However, most banks are not that competitive in fixed rate loans. I've had better luck with fixed rate loans thru a broker. (I'm in real estate so we've done this a lot). If you need a name I would be happy to pass one along.

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L.M.

answers from Dallas on

I have been a mortgage/title attorney for over 20 years now. I have seen some brokers who have been helpful to borrowers, but for the most part, you are paying them to be a middle man to find a lender for you. Unless you cannot locate a lender yourself (there are many websites, local credit unions, etc), I do not recommend a broker. Having said that, also remember that a loan officer with a lender is trying to sell you something (a loan), so be sure to determine for yourself what you can afford and what you want to do.

For any refinance (whether through lender or broker), there will be fees charged.....processing fee, application fee, appraisal fee, credit report fee, upfront points, etc. (to name a few). Some lenders/brokers will tell you that you do not have to pay any of this upfront....that is, they will just "roll those costs into the loan." While this sounds good (you can refinance without any out of pocket money), it is not a good idea. Think about it this way. If you are refinancing a loan where the payoff is $100,000 and all the refi fees total $3,000.....you have a choice. You can pay those fees at the closing and refi the $100,000 OR you can refi an amount of $103,000. You should take a look at how much you will really be paying when you pay that $3,000 back over 30 years with interest added. It makes a big difference.

Also, consider taking a shorter loan term. For example, if 4 years ago, you obtained your 30-year mortgage loan for $110,000. Today your payoff might be $108,000 with $3,000 in refi fees. Consider paying all (or at least some) of the fees out of your pocket at closing and refi the amount of $108,000 for 25 year mortgage. If the interest rate is lower, then you will have a benefit. If you roll the fees into your loan and again take a 30-year mortgage, you have just increased the amount of money that you are pouring into that property. Not a good idea.....this is how many people get to where there is more owed than their home is worth.

Most important, make sure that you understand what you are doing and don't let the lender/broker make decisions for you. If you have questions, see an attorney or someone you trust who fully understands the mortgage business. Email me if you have any questions.

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M.S.

answers from Dallas on

I'm not in the business but my husband is so I know a little about brokers. Just remember that a broker is a "middle man" that will broker the loan out to a bank or mortgage company. The only way the broker can make their money is to charge you more fees and points. Yes, they do the looking around for you by having access to many bank's loan programs, but you're paying extra for that service. With all the online access these days, it's easy for you to do the "leg work" yourself and compare companies. Please feel free to contact my husband if you'd like a rate quote or have questions- [email protected]____.com Good Luck!

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E.H.

answers from Dallas on

I would strongly suggest using Pat Nagler with CTX MOrtgage. I have used her twice and she is AMAZING -- she knows her stuff and explains it and gets the absolute best rates she can!! Her info is [email protected]____.com ###-###-#### ext. 225 Tell her E. Herman sent you!
E.

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K.C.

answers from Dallas on

Use Lending Tree! I got an amazing deal with their competing and you get the quotes without feeling obligated to anyone.

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C.R.

answers from Dallas on

Using a mortgage broker is VERY risky in this market. First, they get paid based on how much they charge you to do the loan, whether it is in a direct fee or in rate. Second, they don't work for the Bank that owns the money so financing may fall through at the last minute.

You are best to use a bank with a direct contact. Don't use the internet. Contact a bank, preferably one that isn't losing money. A worldwide company would be even better. I would recommend the stability of a company like Chase or another big name.

Good luck!

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T.F.

answers from Dallas on

We have used Guardian Mortgage for several years. We built our current home in 2000 and by 2003 ish we had refinanced 3 times (YES, it was worth it....my hubby is a numbers man). We currently have a rate of 5 3/8 and of course are not interested in refi anymore.

Our rep at the time thought we were nuts. All we did was pay minimal closing costs AND pay down on the mortgage. We do NOT use escrow.....why let the lender get interest on YOUR money. We pay our own taxes and insurance. It takes discipline to do this but the interest earned is YOURS. If you don't have the discipline to put that money into YOUR savings every month then let the lender do it for you.

Our re-fi experiences have paid off for us. I know of people in my neighborhood (upscale) having trouble right now in a home/lot smaller than ours and my mortage payment is at least 1/2 of the mortgage payment they pay.

Before you go, know your credit score. The higher the better!!

Negotiate well going in and you will do well in the end.

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C.M.

answers from Dallas on

Hi All,
I know this is a "seasoned" post, but I thought I'd throw in my 2 cents for anyone who happens to read it...

I have been in the mortgage industry for 10 years. Seven of those, I was with Wells Fargo. I was the bank's representative. Now, since having my daughter, I am on the Broker side.

I used to think that the Bank was the upstanding, secure, reliable, best choice out there, and that Brokers were all sleazy bottom-dwellers working out of their living room (one rung up from used car salesmen). And, yes, in some cases, these things are true. But it comes down to the person handling your loan. I worked with many bank loan officers who couldn't tell a hat from a hole in the ground and screwed up many people's transactions. Turnover is HIGH in this business and people pop in and pop out to make the big money when it's hot.

You haven't needed a license to work for a bank (in most cases - this is about to be modified - it won't be a license though, but it's a "registration"). So, people with less experience tend to start there (I did). You are required to be licensed to be a Broker or Loan Officer (working for a Broker). The requirements are stringent (check out www.sml.state.tx.us).

I guess, technically, a Broker/Loan officer is a "middleman". But really, so is a bank's representative. A consumer CAN'T deal directly with the underwriter and the securities department. And the bank's rep still gets paid for doing your loan (through a combination of points, fees, and rate - AND in that rate, you pay for the bank rep's office space, processor, etc).

Think of it this way - there is Retail and Wholesale in every industry. You can buy a pair of Nike's from Foot Locker, or the Nike Outlet Store, either of which you will pay something in markup because you aren't buying them at Nike's actual factory location (which you probably would find inconvenient and nearly impossible to get to - and they won't let you in the door to buy just 1 set of shoes because they sell in bulk).

Regarding the loan unraveling at the last minute: this can happen on either side - and does. The good thing about a Broker/Loan Officer is that they can take it to another lender and repair the damage and still close. Whereas a bank rep doesn't have the choice to try another bank!

I suggest that the method of selection may be the true flaw and not the industry itself. If the "bidding" process is what is used to select a professional, rather than a full criteria of valuation, it is likely that deceit can occur. One can get a cheaper bid than the next one on practically anything - the cheapest of which may or may not be deliverable at the bottom line. Cheapness often does not reflect quality.

It comes down to this - there are unscrupulous people in all businesses, this one included. If you have had the unfortunate experience of dealing with someone of lesser moral character, I certainly apologize on behalf of our industry! I have had unfortunate experiences as a consumer too.

If you have additional questions, feel free to contact me:
C. McElroy
###-###-####
[email protected]____.com
TX Loan Officer license #65272

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N.C.

answers from Dallas on

I am a mortgage lender and I'd love the opportunity to assist you. Typically banks do not have the lowest interest rates out there - this is primarily due to the fact that mortgage financing is not their niche. Also - loan approval with a banking institution takes longer - because you are dealing with an "institution" - and usually your loan documents have to be sent to another state for loan approval.

I work For WR Starkey Mortgage - we are headquartered in Plano and I opened up our Dallas branch 4 years ago. If you are in need of mortgage assistance, please contact me at ###-###-#### x223. My name is N. Creuzot. thank you.

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J.G.

answers from Dallas on

It depends a little on you and your credit. If you are a good strong credit file with a stable job history for 2 years and no late pays or collections for the last 5 years, a lot of Banks have good deals for their customers. If you are Self-Employeed or commission paid, and late pays in the last several years a Broker can shop it and get the best deal for you. Talk to both and get a Good Faith from both. Do not use any one you find from Lending tree or any of the other on line. Do not let them tell you it will not cost you anything. An escrow account is good for some people. If you are not a saver and live pay check to paycheck make sure you have an escrow account. More and more lenders are requirering it. Yes you lose a little intrest on the money, but if you pay your taxes 1 month late, you lost more money. I am a Realtor and have a list of serveral Loan Officers I use. Some with Banks, some Brokers. Let me know if you need some names of people who do get the deal done. DO NOT PAY ANY MONEY UP FRONT!!!

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