Obama Says "Refinance Now!"

With mortgage rates near record lows, thousands of home owners are racing to refinance their home loans, with mortgage giants Freddie Mac and its sibling, Fannie Mae, refinancing $77 billion in loans last month. Refinancing now accounts for four out of five home loan applications. And for those who have yet to look into renegotiating their mortgage, President Obama recently had some advice — do it now.

The President estimated that between 7 million and 9 million Americans could be putting more money in their pocket by taking advantage of lower mortgage rates, while noting that refinancers should also be wary of scammers. A company that asks for money up front to help you with refinancing is most likely to be a scam, the President said. Good advice, say many mortgage mavens, who also caution refinancers to take a close look at the fees that they will be expected to pay at closing.

Although many of these closing fees are legitimate, some are so-called junk fees that merely pad the mortgage lender’s profits. The law requires the lender to provide you with a Good Faith Estimate (GFE) of all fees within three days of your loan application. Mortgage experts advise that the time to start negotiating over junk fees, which carry names like processing fee, application fee, or documentation fee, is when you get the GFE. They also note that any fees that aren’t on the GFE but show up at the closing are prime targets for aggressive negotiations aimed at eliminating the charges entirely.