Better Mortgage Is Offering Refi Perks. Your Lender May Be Doing It, Too.

Earlier this year online lender Better Mortgage introduced its Better Forever undertaking an incentive for existing and new customers that waives origination fees on future mortgage loans and refinances Up-front mortgage and refinance costs can add up so waiving origination fees may be an enticing offer But is it the best deal for you Let s take a look at how incentives like this can sweeten the deal or not when you re looking for a loan Read Best Mortgage Refinance Lenders The Better Forever Plan Better aims to simplify homeownership with a quick streamlined application and closing process The Better Forever undertaking is positioned as a loyalty perk that rewards repeat customers by waiving the origination fee on future loans and refinances Better founder and CEO Vishal Garg stated homeowners deserve to feel confident in the interest rate tied to their mortgage for the life of their loan and benefit from refinancing without the fear of missing out on a better rate in the next 24 hours The incentive is available to all new customers and existing customers whose loans were funded after January This may be an enticing offer for anyone looking to refinance their mortgage as interest rates decline but experts say it should not be the driving factor in determining when and where you seek a refinance loan While waived origination fees on a future refinance might sound appealing they shouldn t distract borrowers from the fundamentals interest rate loan terms total closing costs and lender flexibility says Alex Caswell founder of San Francisco-based wealth management firm Wealth Script Advisors Should You Take Advantage of Waived Origination Fees Closing costs can be a considerable barrier to refinancing a home loan For a large number of homeowners waiving origination fees could mean hundreds or even thousands of dollars in savings But it may not be the best option for everyone and Better isn t the only lender that offers perks for borrowers in a competitive refinancing sector Other lenders may offer similar incentives and discounts or more favorable rates and terms so it s worth shopping around When refinancing or choosing a mortgage lender it s vital to look beyond temporary promotions like waived origination fees says Adam Spigelman senior vice president of portfolio retention at Planet Home Lending While those savings can help borrowers should focus on the overall cost of the loan interest rate and how well the mortgage fits their financial goals Interest rates have the the greater part crucial impact on what you pay over the life of the loan Caswell says While avoiding origination fees could save you money securing a lower rate may save you far more on your overall borrowing costs Caswell says even a slight difference in rate such as percentage point can translate to thousands of dollars over the program of a - or -year loan That reported promotions like waived refinance fees can be beneficial if you re confident you ll refinance again with the same lender Caswell stated But the majority borrowers refinance based on where they can get the best terms at the time and there s no guarantee that the same lender will be competitive in the future Also refinancing isn t unfailingly a given rates might go up or life circumstances might change Incentives like waived origination fees can be a tie breaker Caswell says but they shouldn t be the deciding factor in choosing a lender Instead customers should focus on a low annual percentage rate which includes fees flexible underwriting customer function and loan features that fit their goals SEE Current Mortgage Refinance Rates What to Do When You re Looking to Refinance If you re considering refinancing the first step is to shop around With the mortgage field still operating in a high-rate circumstances lenders are turning to incentives to attract and retain customers It s worth checking with your current lender to see what s available However don t assume your current lender will give you the best deal just because you already have a mortgage with them Here are a meager tips to help you address the process and get the best deal Speak with your current lender first Tell them you re considering a refinance and ask what incentives they might offer For example a few banks or credit unions offer relationship discounts for existing customers Or they might reduce closing costs waive certain fees or provide preferential rates to existing clients Compare multiple offers Obtain quotes from several lenders and compare interest rates fees and terms You can also use online comparison tools speak with lenders directly or contact mortgage brokers Experts recommend getting multiple quotes to see which company offers the most of competitive package Calculate your breakeven point Determine how long it will take to recoup the up-front costs of refinancing to ensure it aligns with your long-term plans If Better or another lender waives up-front fees your breakeven point may be sooner making it a more attractive deal Look beyond rates and evaluate the entire package Interest rates and fees are critical but make sure you re considering all costs when making a decision Also make sure you understand if any incentives are tied to other requirements such as setting up auto pay or opening a bank account with the lender Smart refinancing is about doing the math Spigelman says For example a borrower paying on a loan could save a month by refinancing into a rate even if it costs to refinance In that event it would only take about months to break even and every month after that is pure savings READ Compare Current Mortgage Rates Is Better Forever a Good Option For You Maybe But not necessarily Waiving fees is a strong incentive However eliminating origination fees does not guarantee the lowest overall cost or best long-term value and several lenders may offer similar perks and discounts Better and other digital-first lenders may be a good fit for tech-savvy borrowers who value speed and simplicity For those who value a physical location nearby or strong personal relationships with lenders it may be best to stay local or stick with your current bank or credit union Bottom line Fee waivers can offer essential savings on a refinance or new mortgage loan However it s crucial to compare the total costs of the loan and assess the complete loan package A slightly higher interest rate could negate the savings from waived fees while higher fees could negate a lower interest rate More from U S News Current -Year Mortgage Refinance Rates Current -Year Mortgage Refinance Rates Wary of a Mortgage Refi You Should Be Better Mortgage Is Offering Refi Perks Your Lender May Be Doing It Too originally appeared on usnews com Source