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Contacting a Third Party Vendor Before Refinancing Your Home

Posted on December 26, 2020 by Ray Williams (NMLS #216267).

We’ve been seeing a lot of advertisements for products and services claiming to help folks refinance their home mortgages, so we’re sure you have too. These companies offer promises of improved financial security after retirement and a reduction in high-interest debt through refinancing. If you’re skeptical about calling a company you heard about on TV to discuss refinancing your home, we get it. Ironically, consulting your existing mortgage lender directly about any changes in your contract may not always be best for you. Consulting us before refinancing can be one of the easiest ways to save on your mortgage. Here are three reasons to contact a respected third party, such as Mortgage Maestro Group, if you are considering refinancing your mortgage.

Convenience For Its Own Sake

We all want things to go as smoothly as possible when it comes to large financial commitments like loans, car payments, credit cards, and mortgages. But the promise of convenience often leaves us isolated from other—often better—options. This is particularly true for mortgages. This is why we speak with clients every day who were prepared to refinance with their original mortgage lender before they learned about other options. Your mortgage lender already has a file for your home, and there is an established relationship that makes communication easy. Simply because of this convenience, many homeowners miss out on thousands and thousands of dollars in savings when it comes time to refinance. Take for example the lifespan of your mortgage. It may seem convenient to continue paying off your 30-year mortgage under your mortgage, for you and your lender. But through reducing the term of your mortgage, say from 30 to 20 years, you may be able to save significant sums of money through lower interest rates. You can also look to refinance and not start over, this is done by taking out a new mortgage at the same time to pay off as you have today. 

Bigger Picture

When you discuss different financing options with your current lender, they’re going to look at the situation through their lens and bottom line. Getting a second opinion on refinancing is the easiest way to broaden your perspective financially. Our advisers at Mortgage Maestro Group are interested in more than just refinancing mortgages, we are here to help our clients improve their overall financial health. Many homeowners are in a position where tapping into the equity of their home is the most sensible option. A cash-out refinance is one way of using the value of your home to ease financial burdens from other consumer debt or future spending plans. These refinancing solutions are tied in with big-picture financial health, and speaking to a third party is the easiest way to begin looking at your options. 

Here is a recent true story. A client calls, they are considering refinancing with their servicer. The client has an FHA loan, so are enticed by the servicing lender to do an FHA Streamline, with no appraisal or income documentation. Several hundred dollars a month of savings is what they were sold on. Sounds awesome, right? Except this client has 25% equity in their home. Spending 15 minutes with us, they learned they truly benefit as a family by spending a little extra time to go from FHA to a Conventional mortgage. This is one of many examples we have experienced in the last 60 days, as people surge to refinance with these historically low rates. Servicers also will spin the FOMO theory. With your home, should you be impulsive? That FOMO tactic is high-pressure sales committed to taking you out of the market before you wise up and possibly close your loan outside the servicer. Don’t have FOMO with your mortgage, it could wind up being an expensive borrower mistake you soon regret. 

Bottom Line

Your existing lender has one priority that supersedes everything else—profiting from your mortgage. It is simply not in their best interest to inform you of new outside refinancing options, or any information that does not benefit them financially. Remember they are playing defense to retain servicing on your loan, and who profits when they service your loan? Your doctor is not incentivized to explain mistakes they may have made, or to give you alternative diagnoses. That is why going to get a second opinion is so valuable. And it is not just your lender that is profiting from your mortgage, there are other parties to consider like insurers. Private mortgage insurance can be canceled or significantly reduced during a refinance (a fact that many lenders would prefer to keep hidden). Mortgages can be paid off more quickly or with reduced interest, which often leads to less money in the pockets of banks and lenders. When working with mortgage professionals, you should expect high-level expertise, and service to follow.  

Our only goal at Mortgage Maestro Group is to make sure that our clients have all the information so they can make the best decision available. As a full-service mortgage broker, we have the ability to survey the wholesale lender market to ensure you get the best terms for your specific situation. It’s worth the extra few hours of time to work with a specialist on the largest asset and piece of debt you likely hold. If you’re in the Denver metro area and considering refinancing, contact us today for a no-strings complimentary honest review of your mortgage!

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