IF YOU ARE CONSIDERING REFINANCING YOUR HOME MORTGAGE:

Home ownership is an awesome, exciting achievement. Before you decide to refinance – also known as borrowing against the equity in your home - consider the consequences. If you refinance your mortgage without fully understanding the risk, you could:
• be the victim of aggressive sales tactics that make you feel that you need to make a decision before you are ready and before you understand ALL the terms;
• get a loan with terms that are different from what you asked for and thought you were being offered;
• end up paying property taxes and insurance separately rather than spreading out those payments through the year; or
• you could wind up with a “balloon payment” that you never asked for! (That’s a large payment amount due all at once.)

Don’t risk your most valuable asset. Ask yourself these questions BEFORE YOU SIGN ON THE DOTTED LINE:

• Have I shopped around for other rates and offers?
o Government-backed loan programs: Did you know that the City of Shaker Heights has programs available to help with housing code violations, or that Cuyahoga County partners with local lenders to get you low-interest refinancing?
o A regular community-based bank: did I rely on the advice of others for a quick financial fix, or did I take the time to talk to my local bank, the same bank where I have my checking account, or the credit union that I have trusted for years?
o Be cautious: is this loan offer the best option for me? Click here to download the “refinancing checklist” [coming soon to this page] to find out if you are getting the best deal, and to ensure that you are aware of ALL of the terms of the loan before you close the deal.

• Is this the best deal for me?
o If you have a checking account, talk to someone at your bank first about refinancing options.
o Belong to a credit union? Many credit unions have good refinancing options for members; check with them prior to using an unknown entity to refinance your most valuable asset. If you live, work, or worship in Shaker, you may eligible to join the Shaker Heights Credit Union. Click here [http://www.shakercommunity.com/] for more information.
o If you work with a mortgage broker, review the “refinancing checklist” [coming soon to this page!] with the broker to ensure all of your questions are answered prior to the date of closing.
o You have the right to receive a copy of the “settlement statement” 24 hours before you close. This document is the roadmap for your transaction – it shows where all of the money will go (compensation to the broker, lender, title company, recording fees, other debts paid, etc.).

• Do I understand all the terms of my deal?
o Click here to download the ‘refinancing checklist” [coming soon to this page!] to make sure that you are an educated consumer, and that you understand all of the terms of your refinancing deal. Take the checklist with you to closing and demand that all of your questions are answered before you sign on the dotted line.
o If you want someone to review your loan papers before you sign, call 211, the County’s “Don’t Borrow Trouble” hotline, to get connected to a HUD-certified housing counselor that can review your loan documents and answer your questions BEFORE it’s too late.
o If it sounds too good to be true, it probably is. So ask questions and demand to see terms put in writing. Sometimes brokers try to get you hooked on a “teaser rate” for a loan. You should ask: “What happens if the interest rate increases?” A broker may tell you “don’t worry, we’ll help you refinance in another 6 months for a lower rate.” If promises are made to you, get those in writing, too. Lower rates may not be available in 6 months when your interest rate goes up.

• Is my mortgage broker and/or lender reputable?
o Click here for a list of recent enforcement actions taken against loan officers or mortgage brokers by the Ohio Department of Commerce, http://www.com.state.oh.us/dfi/enforcement.aspx.
o Is your lender: Ameriquest? Click here [http://www.ameriquestmultistatesettlement.com/index.htm] to learn about a class-action lawsuit that may affect your rights if you had a mortgage from Ameriquest between 1999 and 2005.
o Click here [http://www.cleveland.bbb.org/home/] to connect to the Cleveland area Better Business Bureau (BBB) to research whether any complaints have been filed against the company that wants to do business with you (i.e. mortgage broker, home repair contractor, etc.).