The biggest fear homeowners have when refinancing their home mortgage is being ripped off. Many homeowners are convinced that the best way to avoid being ripped off in a mortgage refinance is to search for the best mortgage rate quotes they can find. One of the best ways to quickly find a good mortgage rate is to use the services of a mortgage broker. However, here is where I want to caution you about the biggest secret in the mortgage refinancing industry. The secret no broker or bankers want you to know.

So, What is this secret that desperately needs to be exposed that can save you thousands?
On a daily basis, homeowners are being ripped off from mortgage brokers, lenders, and banks without even realizing it. How? By being ripped off by the mortgage lender and paying extremely high closing costs compared to what your costs should be or are compared to other homeowners in the same situation.

So what makes these closing costs so high... and why?
Sometimes mortgage lenders or brokers get together with their lawyers and then charge higher fees based on a lawyers time as well. These lawyer fees end up being passed on to you even though the lawyer was not necessary for most or all of the time. This is more of a red flag if the potential lender or broker offered you their service for “free”. When the word free is used to describe closing costs it just means the lender is making money off you in other ways. A lot of unethical mortgage lenders will grab your attention with these free or low cost refinance options. Sometimes, they will even give you cash when you refinance with them because they know the money will be coming back to them eventually. They will always work it so that you are paying more for this “free” or reduced cost closing than you expected. They will stack the deck in their favor.

Who else will be able to use this kind of scam on me?
You need to be cautious of anyone you are dealing with not only your mortgage lender or bank. Your real estate can just as easily perform the same sort of under handed scheming to you. That is why it is very important to do proper research on any potential mortgage lenders or banks. Know your estimated costs up front. Demand every single fee or related cost is estimated and quoted before the closing is set to take place. This way you can review the fees and ask any questions before signing off on the new loan. Mortgage lenders with long histories are often more stable and financially secure than fly by night mortgage companies. Usually the big lenders do not pull these cheap and greedy scams but be aware none the less. Practice patience and find the perfect lender, terms, rates, and conditions for your home mortgage refinance.

-M Petrone

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