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Wednesday, September 11, 2002 NAMB offers refinancing tips
With mortgage rates at a record low, and many consumers taking advantage of this opportunity to refinance their mortgage, the National Association of Mortgage Brokers (NAMB) recommends that consumers consider the following tips prior to moving forward with the refinancing process: Be aware of all fees and closing costs that you will incur -- It is important to understand that refinancing your mortgage is not free. Consumers need to ask their mortgage originator to provide, in writing, all costs that will be incurred in order to complete the refinancing process. Just because the interest rate is reduced, it does not mean you save money -- Consumers should compare the total remaining payments of their existing loan to the total payments on the new loan plus closing costs to determine the actual savings. A reduction in monthly payment alone does not always constitute savings. Shop and compare; it never hurts to call two or three other originators to compare interest rates and the total cost of closing your refinance. Understand the new program that you are getting into -- If your old loan was a "fixed" program and your new loan is "adjustable," make sure you have a clear understanding of how much your new monthly mortgage payment will be, and the exact period of time that the monthly payment is good for, and how the adjustment works. Ask how long the offered rate is good for and if you need to lock it in -- Whatever rate your mortgage originator offers for the refinance, be sure to get the rate in writing. Also, get a written guarantee of how long that rate lock is good for, i.e. 30 days, 45 days, etc. Ask about the credentials of your mortgage originator and if he/she is a member of NAMB -- Mortgage brokers who are members of NAMB adhere to a strict Code of Ethics and Best Lending Practices. To find a mortgage broker in your area, go to NAMB's Find a Broker service on its website at www.namb.org. The National Association of Mortgage Brokers (NAMB) is the voice of the mortgage broker industry with more than 13,000 members and 46 affiliated state associations throughout the country. NAMB provides education, certification, and governmental affairs representation for the mortgage broker industry, which originates more than 65 percent of all residential loans in the United States.
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