Changing the term of your mortgage can help in several ways. First, if you were to refinance your current mortgage from 30 years to 15 years, you will accelerate the rate at which you pay towards principle each month meaning your house will be paid off quicker. Also, you will save an unbelievable amount of money in terms of interest because you would likely be taking 10 to 15 years off the life of your loan. Second, you can also refinance a 15 year mortgage to a 30 year mortgage. It seems like it might not make sense to do this, but if you have an immediate need to free up monthly cash-flow and you don't want to take out a home equity loan, this can work out to your benefit. When you take a 15 year loan and refinance it to 30 years you will have the same balance only the payments can be hundreds of dollars less than the 15 year loan. The only draw back to this is you will pay more in interest over the live of the loan.
You have a legal right to a good faith estimate. Get a copy of this document and go over it with a fine tooth comb, it will reveal where there is a real problem.
Be Ready. After your loan is approved, you'll need to sign your loan documents and provide a check for any out-of-pocket closing costs. Make sure the funds are available in your account, and be ready to make room in your schedule to read and sign your loan documents as soon as possible.
Don't rely on published rates. "No one's going to advertise their worst product," says Keith T. Gumbinger of HSH Associates, a Butler, NJ, firm that tracks mortgage rates. "They advertise the best possible rate, which probably gets offered to only the top 10 percent of applicants."
When evaluating different lender offers, in the mortgage loan pre-approval process, pay closest attention to the interest rates they are offering & the closing costs. These are the two biggest factors that will help you figure out which lender is right for you. If one of these two factors is too high, it could offset the benefit of refinancing for you.
