[Emperor]

Nice Post...

Couple things to add...

1. If you have crappy credit, then you aren't going to get the best rate, and working with a broker might actually be beneficial. If you have GREAT credit, your rate isn't going to be THAT much better. I dealt with plenty of people who thought they should get a 0% rate because of thier 800 score. I gladly quoted them a 0% loan (With all the interest paid up front of course)

2. If you owe less than 70K, then your rate has to drop A TON to cover the closing costs of a refi.

3. If you owe over 200K+, then your rate only has to drop a little to cover the closing costs of a refi. The "2%" rule isn't for you.

4. Refinancing through your existing mtg holder may save you a chunk. Maybe Not.

5. Learn to say, "No". I had a broker who would intimidate 2 customers into a new loan every month to meet his $15K in fees quota. They would get to the closing table, and he would have built in the max legal limit in fees, and then some. Don't let this happen to you.

6. You can prepay your mortgage insurance premium and wrap it into the loan. NOBODY does this, but it is legal and will save you a ton of money on MI.

7. Does a Line of Credit make more sense? A line of credit is a TON cheaper than a mortgage in upfront costs. The rate is usually better if you have a 660+ score. However, it may be variable, so run the numbers and make sure the savings you get the first five years is worth the increased rate you may pay the last 5 years. (Most people who fit the HELOC criteria can payoff thier mortgage in 10 years or less). I sold a number of HELOCs to old people looking to refi with tiny loan amounts. Ya know the lil ol lady who calls with a $20K loan and a 10% rate, and the 10% rate is driving her crazy, so she is looking to spend $3K in closing costs to get it to 6%... I wasn't that unethical, so I just sold her a HELOC for a $100 or something.

8. Some banks require more seasoning on refis where equity has "increased" dramatically. Some don't. Shop around.

9. Some banks will do your loan even if you have no job, no income, no credit, no property, and live in another country. Of course your rate will be really high, but they can be done.

10. "How much house can I afford" - My pet peeve. Buyers asking me how much they can afford. WTF?!?!? I always replied, "I can get you a million dollar mortgage tomorrow. Can you afford that? If not how much can you afford?" They always replied, "Well we could afford a little more than we are paying now for rent/mtg." WALA... They always knew the answer to thier own question, but what they really wanted to know was how much money I could get them. Which is always a bad place to start because I could always get them a bigger mortgage than they could afford to pay back. Again, I wasn't unethical like that...

Which is why I am no longer a broker.