It can be hard to know the right questions to ask. Before you refinance your mortgage, ask yourself and your Loan Officer these questions to put yourself on the right path and work with the right person.
1. Can this Loan Officer be Your Go-to in the Future?
This is arguably one of the most important questions to ask yourself as you refinance. Instead of viewing your refinance as a one-time event, you should look at it as a partnership with a mortgage team. Focus on finding someone who, when you pick up the phone, you know will be there now and years to come.
We’ve been in this industry a while – we know that a good Loan Officer is hard to find. By taking the time to find the right expert to guide you on your refinance, you can focus on building a relationship rather than starting over with a new person next time.
We say next time because rates change, finances change, life changes. With these changes comes the need for financial guidance. It only makes sense to build a partnership with a mortgage-industry expert you can turn to every time there’s a “next time” who knows your situation, plans, and goals. Someone you can count on.
Relationships matter. Before you refinance, find a Loan Officer you trust with testimonials and industry-experience who can help you save money now and in the future.
2. What’s Today’s Rate?
This is a bit of a trick question. Rates are what motivate people to act on their refinance, but if you have the right Loan Officer, they won’t give you a standard answer to an inquiry about the day’s rate. The truth is, there are dozens of variables and many programs that can ultimately affect the rate available to you.
Your Loan Officer should be aware of these factors and inform you about them. Any Loan Officer that just gives you one rate without significant inquiry or assessment to your unique financial situation is not someone you should work with.
3. What are the Fees?
Every single rate has either a cost or a credit. Any rates you see advertised have some kind of fee, but often people forget to ask for details when calling Loan Officers about rates. A good LO will help you understand the fees and evaluate the timeline of benefits between those costs and credits.
Some low rates may come with strings attached or only be available under certain programs or circumstances.
If your Loan Officer is unable to effectively explain the fees of the loan, or doesn’t know the details and does not follow up with you, you should think twice before working with them.
4. Can You Lock the Terms Today?
We see this question overlooked by many people, but it’s an important one. During heavy refinance volume periods (especially those with FHA and VA loans), rate advertisements are everywhere. But we find many advertised rates are used as bait-and-switches that, upon further investigation, come with strings attached. (Mailers, in particular, are rarely accurate given the delayed timing.)
Some of those strings require loan approval or “cleared to close” before locking terms. With rates changing every day and the future uncertain, that means a great deal of risk for you. In other words, the low advertised rate is only available because the lender is asking you to hold all of the risk. We don’t believe that’s fair.
A good Loan Officer will see this right away and inform you of the details and risks of low rates that require approval before terms are locked. Always ask.
5. How Long Until You Close?
No borrower wants a lengthy closing process. It’s not just the inconvenience either – the longer the closing process, the greater chance the loan terms expire or the loan cannot close.
The sooner you close, the sooner you can start saving money paying a lower mortgage rate. Also, the sooner you close, the better position you are in to refinance again if rates drop further. Ask your Loan Officer how long the closing process will take. If they can’t give you a straight-forward answer or the timeline sounds long, ask why and push for a faster closing.
A good Loan Officer will work with you on getting locked and closed as fast as possible. They’ll keep you informed on the progress and care just as much as you do about expediting closing.
The Bottom Line: Work with a Loan Officer You Can Trust
At Solidify, many of our new clients come to us through referrals. We take a lot of pride in our ability to serve our clients with trusted guidance and industry expertise. They know we care about them not through just one transaction, but for all their “next time” home financing needs and the questions that pop up in-between.