In order to compare mortgage refinancing companies, you will need to look at a set of qualifications for the loan and the standards that the company uses to determine financial eligibility for a new loan. Your financial picture will also need to be factor into the comparison. Just because you have been denied refinancing from one company does not mean that you are disqualified by all lenders.
The standards and the criteria are set by the lender and are not mandated by any rules and regulations of the government. If you do not meet the standard requirements you may still qualify for a refinanced loan but you will pay more in the interest rate. The instructions are relatively challenging to complete. You need a copy of your recent credit report, your bank statements, and a newspaper or online access to news print.
Look at your options available in the refinance lending market. Rates and services will differ by geographical area. You will find the information you seek in the local newspaper or on the online newspaper. Find out all you can about the local mortgage market. Identify the banks or lenders that are advertising their interest rates. Local newspapers often print a weekly report on financing or have charts that list the daily rates in the market. The United States Federal Reserve Board suggests that you look at figures from mortgage companies, banks, credit unions, and thrift organizations.
Write down the rates that you find for each lender that you are researching. Be sure that you get the appropriate rate for the length of mortgage that you want. There are different rates for 30 years fixed, 15 years fixed, and the adjustable interest rate loans. You can also do a combination of these loans. You can start with a one to five year short term loan with an option to refinance at the end of the short term note. Choose the option that will meet your needs the best.
Find out which lenders have which costs associated with the refinance process. You will be trying to identify loan origination fees or the cost for refinancing. There will be costs to obtain your credit report from the credit bureaus and a cost for obtaining a recent appraisal on your home. Be sure that you know every fee that will be charged to you in the new loan process.
Most of the fees charged will be a standard percentage rate of the amount of the loan. There is little variance among the lenders. You may have to carry mortgage insurance in order to be approved for the loan. If you do not have enough equity in your home that the lender is secure with, you will be asked to secure mortgage insurance. If you have a government backed loan through FHA or VA, you will have a fee called Upfront Mortgage Insurance Premium that you will be obligated to pay at the closing of the loan.
You will have to know how much you will pay for percentage points on the new loan. Percentage points are a fraction of the total loan amount you are requesting. Your lender may ask you to pay down on the loan similar to the down payment that you made on your first mortgage. If you do not make the pay down, you will be charged a higher rate of interest on the new loan. This is a payment you will make only one time at the beginning of the loan period, generally payable as part of the closing costs.
Talk with the loan officer to find out what they require and what your best option will be. The larger companies and most of the other lenders will have printed information they can send you or will have an online website they can direct you to for this information. Some of the smaller banks have a board in the lobby that they list the daily interest rate on. You can get your information over the phone or make an appointment to meet with the lender. Be sure to find out the interest rates and the terms of the refinance before you pick the lender with the options that meet your needs the best.