Prepare Yourself For Refinancing Warfare and Avoid the Pit of Despair- 10 Lessons I Learned

Last month I underwent a Refianance of my home. Not as horrible as having a root canal performed, but a close second.

I quickly discovered that there really is very little information available to you as a consumer to help you know what your rights are when shopping for a good rate. For the most part, I felt like Indiana Jones when he was dropped into the tomb looking for treasure, only to find a bunch of snakes.

When I searched the web for answers to my questions, I was at a loss. So, I will just share in ten steps of what I learned and hopefully, it can be of some help to someone. I am not an expert whatsoever, just a consumer who came out alive after swimming with the sharks.

1. Always get a GOOD FAITH ESTIMATE "GFE"- IN WRITING BEFORE SIGNING ANYTHING.

2 DO NOT ALLOW AN APPRAISAL UNTIL AFTER YOU RECEIVE A GFE.

3 ONCE YOU RECEIVE A GFE, contact another mortgage broker and ask if they can beat that GFE (now it gets fun).

4 ASK Mortgage Broker #2 for a GFE in writing.

5 Contact Mortgage Broker #1 and let them know how dissappointed you are that they gave you such a high rate and/or closing costs. Tell them, you have to go with what's best for your family unless they can give you a reason not to. (Make them come to the table).

6 Be bolder than I was and contact Mortgage Broker #3 and repeat steps 3 & 4.

7 If you need, take a night and sleep on it. They can wait.

8 Once you negotiate your terms with the broker of your choice (by going through every closing cost and insisting on an explanation that makes sense, proceed, and go forward with the appraisal, if necessary. (Ask the broker to pay for your appraisal or to eliminate the so-called "funding my next vacation" fees).

9 Ask for the Truth-In-Lending actual interest rate - it should only be slightly higher than your rate on the loan. If it is significantly higher, closely look at all the closing fees.

10 Ask the title company to send you a copy in advance of the final Settlement Statement. Compare it closely with your GFE. IF ANY fee is added or higher, contact your broker and request an explanation and hold them to their original GFE.

Tomorrow, I will post my Table of Loan Comparisons that I developed to compare each Good Faith Estimate.