My bank sold my mortgage to a scammy mortgage company and I need to refinance and all the jargon seems scary and confusing.
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My first question would be what is your interest rate now, and why is your new company scammy?
Interest rates today are very likely to be higher than what you are paying now. So even if the new mortgage company sucks, I would probably deal with them until rates drop, otherwise refinancing could possibly cost you hundreds a month.
A conventional mortgage refinance is just like getting the first mortgage. You go to a mortgage broker/bank, they get your financials, credit, and appraise the house. If everything adds up you go to closing. You sign some paperwork, you now owe the new bank a ton of money and they send a ton of money to your old bank to pay off the mortgage. Then the new bank has a lien on your title, not the old bank.
You buy loans essentially.
Refinancing is your chance to buy a better loan to replace your current loan.
Typically if the interest rate is much better you want to buy a new loan to save money in the long run
Do you NEED to? What’s your interest rate vs. what prevailing rates are now? You don’t want to give up a 3% rate for a 7% rate…
Yea my mortgage has been sold like 4 times now, always end up with alot of unwanted calls to refinance to make upgardes, take long vacations yada yada yada, I block them all. pay my bill and continue on with life. Makes no sense in refinanceing an extra 20 to thousand to my bank note because they keep calling me. the bank will sell it again in 12 to 18 months
It’s basically a new mortgage with its own terms, rates, and fees that it’s used to pay off the old mortgage.
Just to reiterate what other people have said:
Don’t.
Your current rate is 4.65%, the rate you will get on a refi will be ~7%. On every 100k of your mortgage that is $2365 more a year, for nothing.
The bank/servicer that bought it may be shit, but they can’t change the terms of your mortgage. So keep paying it, aand save yourself ~$200/month on every 100k you borrowed
from reading your comments in this thread, you need to take a financial literacy course. This thread is a very clear sign that you have no idea what you’re doing. That isn’t an insult, just a fact. Better to know early on so you can get some knowledge, rather than fuck it all up for yourself. You have a 4.6% rate, if you refi now that will cost you a ton of money. Don’t do that. Get some financial education and go from there.
What exactly are your questions?
Why do you say that you “need to refinance,” is that what the company is telling you?
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