Online Refinance

September 27, 2005 5:38 AM

Recommendations for refinancing a home online?

About two years ago I refinanced my home to an adjustable rate with options to pay a minimum payment, an interest only payment or a fully amortized payment. In the last 8 months or so the interest rate has really been creeping up (above 6% - it started at about 3%).

I see low interest rates (about 5%) advertized online all the time. They claim quick approvals and easy application processes.

Have you had a good/bad experience with online mortgage refinance? Recommendations for which online companies to use?

posted by aspenbaloo to work & money (6 answers total)

I vote for getting yourself into a more traditional mortgage, like a 15, 20 or 30 year fixed or an ARM maybe. Depends on how long you plan to be where you are.

We used Lending Tree to find the best rates when we refi'd in December. A bazillion companies were beating down our door and we ended up with someone nice and knowledgeable who offered a great rate and good service.

One warning...Eloan is scary. They were practically stalking me to get our business. They called several times a day until I lost it with them. They found me through Lending Tree....

Alternatively, you could just go to a site like bankrate.com, find the place with the best rate and work with them.
posted by suchatreat at 7:31 AM on September 27, 2005

I used Eloan to refinance my house two years ago, but didn't have the 'stalking' problem above.

I filled out the website and they called within minutes, which was a little spooky, but reassuring at the same time. Nice guy, very helpful. Walked me through the whole process, used English rather than AccountantSpeak, called after they finished to thank me.

The entire process was quite easy, got a great rate on 15 yr fixed and couldn't be happier.

A+++ Would do multi-hundred-thousand dollar transaction again.
posted by unixrat at 8:04 AM on September 27, 2005

I think some of the "mortgage refinancing" sites are simply places to gather email addresses for spam. At least, that seems to be the most likely explanation for the spam that continues to clog my earthlink account. So before you fill out a form online, think about whether the site looks reputable (real address, reputation, etc.). I prefer sites that let you find out their rates before they ask you for a lot of information.

Other points:

* You should think about whether you want to pay closing costs (possibly several thousand dollars) and get a lower rate, or look for a no-closing-costs option, with a slightly higher rate. Typically the breakeven-point is about three years, so if you expect (say) to be in your house for the next ten, and can afford the cash upfront, paying closing costs (application fee, appraisal fees, etc., as well as any points) would make sense.

* You might want to stroll into a bank and get a quote, as a baseline - rate, closing costs, whatever. Tell them you're not interested in filling out a lot of paperwork just to get a quote; hopefully you can give them your name and SSN and they can look up your credit score (which typically will affect the offered rate), or you can tell them what to assume (average, good, etc.). Then you'll have something to compare to the online rates.

* I also used eLoan several years ago, and was pleased, but circumstances may have changed.

* Using a mortgage broker is another option. If you have an idea of what the market is (via a brick-and-mortar quote, as well as looking online, per the above), you might want to see what a mortgage broker can offer. (One source of a recommendation for a broker is a real estate agent; they have an incentive to suggest someone who is good, because if you're happy, you might think of them when you sell your house.)
posted by WestCoaster at 9:31 AM on September 27, 2005

None of the online lenders would deal with me because my house is under 800 sq. feet and I didn't need at least US$100,000. I ended up using an offline mortgage broker, which, minimally, would be a fairly easy way to reality-check the online folks.
posted by QIbHom at 1:15 PM on September 27, 2005

My tip is to create an e-mail address to use specifically for deailing with mortgage sites. I made the mistake of not doing so when I went looking a few years ago, and ended up with a huge spam problem.
posted by Good Brain at 1:41 PM on September 27, 2005

At least, that seems to be the most likely explanation for the spam that continues to clog my earthlink account.

Actually, the reason you get that kind of spam is because the referral fee for mortgage spam is rumored to be something on the order of 800.00 per individual referred. So, it's an extremely profitable line for spammers. They only need one response to make a great deal of profit off of a 3billion email run.
posted by thanotopsis at 3:32 PM on September 27, 2005