Home refinancing advice is everywhere – the real issue is whether the advice you find is worth the paper it is printed on – and when you are finding refinancing advice online, that’s very little paper indeed! You need to be very careful who is dishing it out when it comes to home refinancing advice.
Mortgage lenders want you to borrow money from them. If you are not a customer today, but they can persuade you to refinance your home, then they can have you as a customer tomorrow. These financial organizations are big business – they make a good profit from you over the life of your mortgage. In fact, they make so much profit that it is worth their while to pay hundreds of dollars in commissions to mortgage brokers.
It’s even more incredible – these mortgage lenders are so keen to find new borrowers that they will pay up to a hundred dollars just for a lead. A lead is the name, address, and some basic financial details of a mortgage-holder who might possibly be thinking about refinancing.
If you think about it, there is nothing smart about taking advice from someone with a vested interest.
Would you ask a cigarette company whether you should take up smoking?
Mortgage brokers are just as biased. Even with the very best and purest intentions, mortgage lenders and mortgage brokers cannot help exaggerating the benefits and playing down the risks of refinancing your mortgage.
And not all of them have the best and purest intentions – there is a reason the words “loan” and “shark” are often used in the one breath. If you don’t refinance your home, they don’t get paid. Home refinancing advice from someone with a vested interest is never going to be impartial.
You need to consult independent authorities to be sure you are getting independent home refinancing advice. Start with the government web sites, and general educational web sites that don’t belong to a financial institution. Avoid web sites which ask you to fill in long and complicated forms to obtain the information you want.
In some places, you can find consumer guides to refinancing, specifically produced by a consumer advocacy service to help protect you from the exploitative behavior of some mortgage lenders and mortgage brokers, which is at least in part responsible for the mess that is the current US housing finance marketplace. You can keep yourself from being dragged down by it, by doing some simple checking before making any commitment to refinance your home.
It is very important to get home refinancing advice before you commit to a mortgage lender. Refinancing your mortgage could be one of the major financial decisions of your life. Make sure you get the right advice, and it comes from an unbiased source.