Smart Way to Get a No Cost/Low Cost Refi?

"Why Your Current Lender Could Be the Best Source for a No Cost or Low Cost Refinanced Loan?"





When it comes to refinancing, currently while mortgage rates continue to fall, real estate investors who borrow now can possibly save thousands of dollars on their monthly payments and interest!





Due to the avalanche of new borrowers seeking to cash in on our present Refi-Boom; to avoid problems, RE Investors should first turn to their current mortgage lender for what is called a Rate & Term Refinancing.





Have the lenders to focus on your history, present business, and inquire as to the speed and convenience of the process.





In order to keep hassles to a minimum You've got to ask your lender...the Right Questions!





Ask:





Can you reduce or Eliminate the closing costs?






(This should be possible as your home's appraisal, your credit and income information are already on file?)





Do you use the automated underwriting systems like LP or DU by Fannie Mae and Freddie Mac?





Are there any other special offers you can give me because I'm already a loan customer?





Why asking makes a Profitable Difference to both you & the Lender?





First it is important for you to know you are satisfied with your mortgage lender or servicer.





Often, the two aren't the same because lenders routinely use a second company to collect payments and in other ways maintain the loan.





Between the two, a large part of the borrower's information, normally required in a refinance, is already on file.





And that means the companies don't need to hire third-party providers to find out more about a borrower's income, property value and credit history.





Consider closing costs and shop around!





Borrowers should consider whether paying slightly more in closing costs in exchange for a better rate elsewhere would save more money, however. A Loan Calculator can help you understand just how long it will take to recover the cost of refinancing.





Or borrowers can ask their lenders for amortization tables on both loans. The tables allow people to check their costs and remaining balance at any point in the loan.





The point at which the new loan's savings in interest and monthly payments eclipse the closing costs is the point at which the borrower breaks even.





Ask them how they do it?





Know whether the lender uses either Freddie Mac's LP "Loan Prospector" system, or the Fannie Mae's DU "Desktop Underwriter," because that can speed the refinance process.





It gives a credit decision within two minutes after all the data are entered.---Saving you TIME and MONEY!





Whether you're an old customer or new, if you've had a mortgage and also been paying on it as agreed you are a good credit risk, these loans can be approved very rapidly!





Of course, borrowers who go back to their first lender may get better Terms and/or Lower Rates/reduced or eliminated fees, thus reducing the costs of their loan.





Ask if they portfolio or sell-off your loan?





Some will modify the interest rate on a small portion of the loans they originate and don't sell-off into the secondary market to another lender.





EXAMPLE:





Customer has a 7 year excellent pay history on a 15-year fixed-rate mortgage loan could get their loan rate dropped by .75 percent without closing costs, appraisal or any of the other hassles associated with a regular refinance.





So as you can see, from the above, it definitely does pay to ask your current lender!





Derrick Ali

Comments(2)

  • Pat13th January, 2003

    I can't wait to try this technique THIS week!!! I have lots of lenders to call smile Thanks for the great advice!

  • drifter7th January, 2003

    Ask your lender about Streamline refinances. These are often quicker and cheaper. They are offered with most lenders for no cash out transactions and you do not need some items such as income qualification or appraisals. These refinances opperate on the idea that if you have been paying $1000 a month, we assume you could pay $900 for the same loan. Banks are happy to do this for you rather then to have you go to a competitor.

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