Inspired by Jim’s recent efforts to research a possible refinance, I decided to drop by LendingTree to see what they have to offer. For those that haven’t been following along, we refinanced into a 15-year fixed rate mortgage at 4.875% just under a year ago, so I’m not really expecting to find an offer that’s good enough to warrant refinancing. But that doesn’t stop me from wondering…

The LendingTree executive summary

To be perfectly honest, I was a bit disappointed with what LendingTree had to offer. While the site is very easy to use, the rates that I received weren’t all that great. I requested quotes for both 15- and 30-year fixed rate mortgages and, while the rates looked okay on the surface, they were all predicated on paying a full discount point. I’ve attached a screenshot of the results below (as of 12/22/08).

The best 15-year offer that we got was for 4.875%, whereas the best 30-year offer that we got (which came from the same lender) was for 5.125%. But again, these rates assume that you’re buying a full discount point, which is equal to 1% of the mortgage amount on top of the standard closing costs. By comparison, PenFed has similar rates with no discount points, and no lender-associated closing costs.

Anyway, LendingTree delivered the quotes that you see above in well under an hour, so they’re certainly efficient. Just don’t let the ease of the process lull you into accepting whatever they happen to bring to the table. While you might get a great deal, you might not, so it’s important to look around and consider your options.

Update: The day after applying, we got a call from a LendingTree rep. When I told him I was unimpressed by the rates, he said that those are fairly generic offers that don’t take into account your credit score, etc. He further stated that he could do much better, but when I told him that we were already at 4.875% he said he couldn’t go far enough below that to make it worth re-financing.

Finding the best mortgage rate

The bottom line here is that, if you’re trying to decide if now is a good time to refinance, it can’t hurt to give LendingTree a shot. The signup process isn’t overly invasive, and they respond fairly quickly. Just be forewarned that they’ll try to upsell you on a “free” credit report and credit score (it’s really a free trial) as well as better auto insurance rates.

In the end, I’m still a fan of working directly with a known quantity like a trustworthy mortgage broker (ask around for referrals), or perhaps a local banker. In our case, we’ve had the most success working through an independent mortgage broker that my brother turned us onto a few years back. In fact, we’ve used the same guy for three separate mortgages now (one purchase and two refinances). Even here, we’ve shopped around and used other offers to get him to improve his rates.