Some lenders will give a mortgage refinance quote that may not be accurate in an attempt to close a deal. A homeowner that is looking to refinance should make sure that they are getting an accurate mortgage quote so that they can guarantee that the quote they received is the deal that they were looking for.
To give an accurately written mortgage refinance quote the lender needs all of the correct information in regards to the homeowner. A mortgage refinance rate has many different elements to it that can change the pricing of the loan. The lender will need a completed mortgage refinancing application in order to view the credit, income and assets of the homeowner and verify the type of loan that a homeowner is able to be approved for. Once all of the information is received the mortgage lender can can then look at the market and see what the rates will be on the specific type of mortgage products that are available for the homeowner and give an accurate mortgage refinance quote. This mortgage refinance quote should come in the form of a good faith estimate. A good faith estimate will break down all the payments and charges that will be included in the loan.
When a mortgage company sets the guidelines for their loans they have to analyze how much risk the borrower will bring on, this risk is what they will price the loan on. obviously the greater the risk the borrower is, the more expensive the loan will be.
Mortgage companies evaluate the risk by analyzing multiple factors. First, they analyze credit, the better the credit score the cheaper the loan. They also look at how much money the homeowner is going to borrow, it is going to be more expensive if the homeowner is borrowing a large amount of money. The next thing they look at is the type of property. They will want to know and verify if the listed home is the primary residence or an investment property and if it is a condo or single family residence. Finally, they will analyze what type of mortgage product and the term that the homeowner is interested in. The shorter the term of the mortgage, the cheaper the mortgage will be and the faster they can get their money back, which means the less they will charge in interest.