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MORTGAGE refinance requires one to be more careful than purchase mortgage. In purchase mortgage, i.e., the original mortgage loan you took to buy your property in West Virginia has few ‘catches’ than refinance. In this article, we shall look at what these catches are, and how you can avoid them as you go about negotiating mortgage refinance and finally sealing a deal.


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Trust yourself


Mortgage refinance is of course a specialist subject and you cannot do without professional guidance. However, you can leverage the professional help available in West Virginia by taking your own broad decisions – and amending them on professional advice if and only if suggested alternatives are more suitable for your needs. But how will you take your own basic decisions when you don’t know much about the market? Do you have to embark yourself on a market research by zipping around from lender to lender to lender, broker to broker ?


No, it’s not that difficult. The Internet has enabled you to do your own research without getting to the roads. Almost every serious mortgage refinance lender / broker in the United States has set up its website. Many such websites contain online mortgage and mortgage refinance calculators, which are extremely easy to use.


The important thing here is that you should feed correct information about yourself and your property into the calculator to get near-accurate results. Some people have found big gaps between their online calculator findings and real offers made by market operators because the information they provided to the calculators was incorrect.


Online calculator


One area where a mortgage refinance seeker can go wrong is: credit rating. Most people have tendency to believe that they figure in the top credit rating, but they are proved to be wrong by the time the credit report comes in from a rating agency. Credit rating is a delicate calculation: even a reminder from a creditor – such as a credit card company – or a delay in making a payment against a debt erode your credit rating. If you have got your formal credit rating with you, you can’t go wrong with it. But most people obtain a rating later in the process of seeking a refinance loan, and often enter a ‘good credit profile’ to the online calculator when their profile is actually ‘average’ or ‘poor’.


Credit profile is the only area where one can go wrong while using mortgage and mortgage refinance calculators online. The other details required by the online calculators are relatively simple and error-proof: such as, type of house, the amount outstanding against your purchase mortgage loan, the amount of refinance loan you need, the number of years you want to the owner of the property, the ‘points’ you are willing to pay to reduce your effective interest rate, the exact location of your house in West Virginia, and so on.


Since there are several types of refinance loan available (e.g., fixed-rate, adjustable-rate, interest-only, cash-out, jumbo, etc), you can make a calculation of your approximate eligibility under each loan type. Look at what the online calculators’ estimates are. They are rarely accurate but are reasonably reliable if the details you provided were correct. Once you have thus completed your online calculations (which takes a few seconds per calculation) – there you are, your research is complete! You can now provisionally decide which option is best for you – or, whether refinance makes sense to you in your situation at all.


Negotiating with lenders / brokers


Your online findings should serve as the basis of your negotiations with lenders and brokers. Remember to give greater importance to the annual percentage rate (APR) of your refinance loan than the interest rate alone. Compare the broker / lender’s advice with the online findings: there should not be a huge gap if the details you provided the online calculator were correct.



Once you thus get an offer that suits your needs, and you haven’t got a better offer from any other source, go for it. And remember you have to pay only that particular broker through which you finalized your refinance loan. Others don’t have to be paid unless you had agreed to pay them, which you don’t have to. Broker’s commission in New Jersey varies from 1% to 10% depending your credit rating: higher rating means lower commission, and vice versa.