Mortgage Calculator Refinance

Want to avoid getting scammed in your mortgage refinance?  Be sure to watch out for these common scamming pitfalls:

Hidden Fees

When shopping around for a new mortgage lender, be sure to check both the lenders and the broker’s fees for any hidden or usual charges.  While not illegal to charge a myriad of specialty charges when refinancing a mortgage, knowing exactly, what’s in your final closing cost bill can save you thousands in unnecessary expenses.

For instance, while one lender may not charge an application fee they may charge an extra half a percent on the loan. In most cases, paying the $350.00 application fee is going to be much cheaper over the life of the loan.

Be sure to when comparing lenders and brokers to list the entire mortgage refinancing fees, costs and rates with one another to see what the bottom line of each loan will ultimately be.

Arbitration Rider

If you notice that your new lender requires you to sign a statement saying you agree to arbitration should a conflict occur between you and the lender, walk away.  More often than not, these arbitration agreements are the lender’s way of ensuring that you have no legal rights should they do anything wrong in regards to your loan or contract.  By sighing such an agreement you are saying that you agree to enter into arbitration and allow that entity to decide the fate of your dispute.  This is especially detrimental to the borrower since the lender is the one who picks the arbitrator – which by the way does not even have to be in the United States or obey U.S. rules and laws.  Plus, who do you think the arbiter is going to side with when the lender is paying their fees?  Arbitration riders are rarely good for the borrower and should be avoided.

Most scammers offer limited ways to contact the company for help, other than through the broker.  Ask your broker for the names of key players in the company; the corporate office address and phone and fax numbers; email addresses and website addresses. If they insist that they’ll do all of the work for you and there is no reasons for you to worry about contacting the corporate office, be leery of continuing on with your refinancing deal.

If there is one thing we should have all learned in recent years it is that even the biggest most respectable housing lender can work fraudulently.  Considering the havoc the big guys caused the housing and financial markets since 2008, what trouble can a little known or new company do?  While it is not necessarily a bad idea to work with a small or even new lender, you do need to be sure that they are legitimate and have the financial rating necessary to ensure that your loan (and your house) are safe.

You have been approached by a mortgage broker about refinancing your current mortgage loan. Everything they say sounds great, but how can you know for sure that you are not being scammed?  Here are a few basic tips:

• Work with written contract only.  Verbal agreements mean nothing in the world of finance.
• Use checks only.  Do not pay any fees in cash or authorize any automatic withdrawals from your checking or savings account when working with an unknown broker or lending institution.
• Check their references. This includes calling the Better Business Bureau for information and checking blogs for disgruntled customers.
• Check their website carefully.  Sure, anyone can put up a good looking website to make themselves look like a legitimate company, but most will fall short when it comes to providing thorough information on it.  Look a company’s website over carefully for appropriate addresses and phone numbers (and try them out); frequently asked questions; detailed reports and information and more.  Just because the main page looks good doesn’t mean much.  Dig deeper looking for anything that seems unusual.
• Always make payments to the company; not the broker.
• Call the customer service line with a few questions. If it is difficult for you to reach a real person or can not get a straight answer on basic questions, the odds are good you will not get the help you need if a problem arises in the future.

Refinancing your current mortgage into a lower interest rate and smaller payment can be a great way to save money or even pay your home off early.  Just be sure when shopping for a new loan that you take the necessary precautions to ensure that your refinancing process goes smoothly and does indeed save you money in the years to come.