Tips On Refinancing A Mortgage
Before refinancing your home, take a look at these tips on refinancing a mortgage. When a home loan is refinanced, money is borrowed to pay off the current mortgage. Many factors contribute to people refinancing their homes, such as getting a lower interest rate or need extra money for emergencies.
- Research the mortgage lender through the Better Business Bureau. It is important that you choose a reputable lender to avoid disaster after you have secured the loan.
- Be sure to discuss with the lender any fees that are associated with your loan, such as title insurance, pre-paid tax, etc which are normal fees. Beware of any lenders who charge you a fee just to refinance your loan. If you are paying fees that aren't the normal fees associated with a home loan, avoid this lender.
- Check a recent copy of your credit report. It is important to know your score since the mortgage lender will use it to determine if you qualify for refinancing.
- Be sure to pay all bills in a timely manner even while you are in the process of securing the loan. Your interest may be affected if your score decreases due to late payments. The lender will check a copy of your credit before the loan is finalized. In addition, avoid any large purchases, such as a vehicle, while you are in the process of securing the loan. Large purchases can affect your approval rating.
- Review the loan documents thoroughly. If there are any "hidden fees" that you don't understand, ask questions.
- Be sure to choose the loan terms that are more suiting to your needs. Inquire about shortening the term, for example, if you previously financed for 15 years, shortening the term to ten years can save money in interest. Shortening the terms can be beneficial, however, your mortgage payment may be slightly higher. Consider your options to determine which term is best.