You currently have a VA loan and want to refinance it. You heard rates are lower and would love to save money. Your current lender already approved you, should you stay with them? Does it pay to shop around?
We help you answer these questions below.
Lower Rates and Fees
You might wonder why you would want to shop around after you are already established with a lender. There’s one simple answer – money. Your current lender doesn’t have to work to get your business. He already has your loan. You are more likely to offer what they give you at face value than negotiating or shopping around.
When you apply with new lenders, though, they need to determine a way to get your business. One such way is by providing attractive terms. Maybe they quote you an interest rate that is 0.25% lower or they charge you less for closing costs. Even a little saved money can make a big difference in the end.
When you shop around you have the ability to negotiate with different lenders. After you compare the quotes provided, you can use the other quotes to help you get an even more attractive rate or term for the loan.
Better Customer Service
If you are unhappy with your current lender, there is no reason you need to stick around. When you look for a lender for your refinance, ask specific questions about their loan servicing. Now that you have a little experience under your belt, you know what you do and do not want. Asking the right questions can help lead you to the right lender this time around.
Less Knowledge of Your Situation
If you are taking advantage of the VA Interest Rate Reduction Refinance loan, you don’t have to verify your income, assets, credit score, or the value of your home. If you use the same lender you have now, though, they already know specific things about you. If there was anything slightly risky on your application, they may be leery to write another loan for you.
When you use a different lender, it’s like starting from scratch. They don’t know anything about you and they don’t have to ask. The VA only requires that they verify your mortgage payment history and your eligibility for the VA loan.
A new lender may be more willing to refinance your loan with no questions asked than your current lender would. Your current lender may have a better idea of the current value of your property (if it dropped, that isn’t good) or that you occasionally paid your payment a few days late. Neither of these factors would work in your favor, which is why a different lender is a good idea.
In the end, what you want is the lowest rate and the lowest closing costs. If you can combine those two factors, you’d have the ideal situation. You’d save money on your current loan and you wouldn’t have to verify anything.
Of course, make sure you do your research. The grass always seems greener on the other side, but you must make sure it is. Ask the right questions and do your research. The internet provides plenty of information on available VA lenders today. Read the reviews and figure out which one will suit your needs the most. Then get the refinance you need that will help you save money each month!