One of issues of going DIY when refinancing is getting lost in a river of real estate jargonthat takes too much figuring out before you can do actual work. That is why it is always advantageous to hire a professional who knows the ins and outs of the market. Not only do they know what those terms mean, they also know how the industry operates and how its current dynamics may affect you as a refinancer.
Still, it takes more than just making a few phone calls and an appointment over a cup of coffee to get the job done. Not all brokers are created equal. Some of them simply want to get their commission. Finding the one that cares about what he or she can actually do for you more than simply getting the job done may take more patience and effort. But when you do, it’s definitely worth it.
What is the job of a broker?
At its core, the job of the broker is to help you determine whether the decision to refinanceis a good idea or not based on his or her knowledge of current market trends and his or her evaluation of your situation. If you are not in the best position for a refi, your broker should be able to tell you so, or at least offer you some helpful alternatives.
No, they should be more than your paper people. The right broker will take the time and effort to ask you questions about your current finances, what your future goals are regarding your property, etc. They should also be able to simplify the whole refi process so you can have a better understanding of how things work and why decisions should go one way or another.
You should be able to work as a team towards the best end.
Here’s what to ask your broker
When you are on the road to refinancing, the following questions can help you maximize your professional help and gain more insight on the task at hand.
- How can you help me?
- What services do you provide in line with your role as my broker?
- Is it a good time to refinance?
- Are there any other benefits to refinancing?
- How much would refinancing cost me?
- (If the broker recommends another loan program) What are its benefits and restrictions?
You may notice that there is nothing about getting the lowest rate possible. In fact, a lot of borrowers ask this question but experts say it is not always the best choice. Many low-interest rate refi programs usually carry more restrictions for the homeowner, charge more fees on the upfront, and may actually cost you more in the long run. Never concentrate on a loan’s salient features, especially when they sound too good to be true. Most of the time, the lender will place fees on other parts of the loan to compensate for the risk.
Or should you really do the asking?
If your broker is the expert that he or she claims to be, the asking should go the other way around. Still, working together and actively discussing both inputs can go a long way in helping you achieve your goal of successful refinancing.