Mortgage Refinancing: 10 Tips
There has been a lot of talk about mortgage refinancing, especially in light of the current economic situation, so before you decide if mortgage refinancing is right for you, here are ten tips you might find helpful.
- Stay on top of everything so that you can make your mortgage refinancing decisions without being in a hurry. You should have been keeping up with your financial situation and seen problems coming if this is why you’re refinancing. If you get in a hurry, you may be more prone to make mistakes or be pushed into something that isn’t right for you.
- Get the Best Rate. Shop around, but watch for tricks, such as hidden fees, “balloon” payments (payments start off small but then you have to make one large payment at the end of the mortgage refinancing period) and other things.
- Use a reputable company. Watch out for scams. Don’t let them push you into making hasty mortgage refinancing decisions. Remember: if it sounds too good to be true, it probably is.
- Do it for the right reason. Mortgage refinancing should be done to take advantage of lower interest rates or lower payments, or because you need to use your home’s accumulated equity for repairs. It should NOT be done for frivolous or unnecessary reasons.
- Know your credit history before you even apply. Get your credit scores from the three credit reporting agencies. Look them over, and make any corrections, if needed.
- Do advance research before you ever sit down with a mortgage refinancing officer. This research should include your credit history, different interest rates and loan terms, and other information that will help you make an informed decision.
- Do what you can to pay down other debt before entering into a mortgage refinancing agreement. Doing so may help you get better terms, or a lower interest rate.
- Remember, every case is different. Your refinancing experience will probably not be like someone else’s, even if the circumstances are similar.
- Look for lock-in time that will give you enough time to get everything done. Sixty or more days is a good period of time from when all mortgage refinancing paperwork and approval has occurred.
- Make sure you are staying in your home long enough to get the benefit of mortgage refinancing. It does no good to refinance if you are going to be moving in a few months or years.
Posted on: Jun. 16, 2010