Recently I had a client contact me regarding a call they received from an online mortgage lender. My client, who is a disabled veteran, purchased his first home and I had helped him obtain the loan. This online mortgage lender said they could refinance his home at no costs and save my client money. Thankfully, my client made a very smart decision, before he did anything with this online lender. He called me.
Being a local lender and taking pride in my abilities, I like to make sure the people who work with me obtain the best loan for their short-term and long- term plans and goals.
I worked up a comparison of the client’s current loan and what he was being offered from this online lender. Turns out this “No Fee” refinance would ultimately have cost my client more money over time and only reduced his payment by $60.00 per month.
Cost to close new loan $13,000.00 divided by the $60.00 lower payment it would take over 216 months to recoup the savings
Extending the term for an additional 1 year
In 5 years, the client would have a total of negative $4500 in net savings
Plans to increase the family in the next 3 years, the possibility of selling is great
There is no such thing as a Free Refinance!
Please make sure you are working with someone who cares about your short-term and long-term financial goals.
Here are some tips:
o Have your lender do a comparison, break it down monthly and annually.
o Make sure to include future expenses and costs.
o Look out for extended terms compared to what is left on your current loan.
If it’s not going to be a good beneficial loan with savings or helps you with your financial goals, please do not do it.
Mortgage Loan Advisor with CMG Financial
Cell 253 431 8011
Your local mortgage advisor with over 20 years’ lending experience. I am here to educate, guide and make homeownership possible.