These days, it seems a lot of homeowners are in a rush to refinance their mortgage loans. The reasons why are obvious. When you refinance your mortgage under a better interest rate, you can save a lot of money over the long run.
But to achieve the biggest savings possible, you'll need to go about your mortgage refinance the right way. Researching mortgage companies and choosing the right one is a big part of this. To help you ask the right questions when screening mortgage companies, we've made a list of three important questions you should ask.
1. Will my interest rate include yield spread premium?
Yield Spread Premium is the amount paid to a mortgage broker based on selling an interest rate above the rate that the borrower qualifies for. In other words, it is a markup on your mortgage interest rate.
Oftentimes, you can avoid this markup by paying an origination fee up front. This is usually the best way to go, because you avoid paying the higher interest rate each month, which sort of defeats the purpose of a mortgage refinance.
2. How soon can I lock in my mortgage interest rate?
A lock-in (sometimes referred to as a rate-lock or rate commitment) is a mortgage lender's promise to give you a certain interest rate, usually for a specified period of time, while your loan application is processed. This is obviously a benefit to you, because it prevents the offered interest rate from increasing due to market conditions (while your paperwork is being processed).
Remember, the whole point of a mortgage refinance is to obtain a better interest rate on your loan, thus paying less of a mortgage each month. Until you lock in the rate that is offered to you, there are no guarantees. So once you're happy with the interest rate being offered, ask to lock it in -- and be absolutely sure to get it in writing.
http://www.mortgage-refinance-advice.com/questions-for-lenders.php
