Considering a refinance
When you consider a mortgage refinance you should do your proper research & study all of your options. This article will give you some guidance on what to do & where to go for assistance in this hard process.
As a home owner you can easily find mortgage companies willing to waive routine refinancing charges such as application, appraisal and legal fees. In exchange for low or no up front costs, you’ll have to be willing to accept a rate that’s somewhat higher than the prevailing rock bottom.
Planning to stay in your home for at least three to five years? It may make sense to pay points (a point equals 1 percent of the loan amount) and closing costs to get the lowest available rate.
Avoid laying out cash and still get a low rate by adding the points and closing costs to your new mortgage. If you’ve had your current mortgage for at least three years, you’ve probably reduced your balance by several thousand dollars. So you may be able to tack your closing costs onto your new loan and still end up with a mortgage that’s smaller than your original one, a lower rate and lower monthly payment.
Mortgage Refinancing Tips
Mortgage refinancing will not only get you a lower monthly payment, but you may be able to pay off your entire mortgage quickly once you have secured some better payment terms. So how do you know what types of terms to look for in order to get mortgage refinancing that will give you a lower monthly payment?
•Apply for pre-approval with several mortgage refinancing lenders.
During this process make sure these refinancing lenders are not pulling your credit history. Save your credit pulls for the lender that can provide you with a mortgage refinance with a low monthly payment & interest rate. Authorize only the companies that can give you the best mortgage refinance rates to pull your credit.
•Check to make sure your existing mortgage does not have any pre-pay penalties. While the cost of this penalty may vary, it generally amounts to about six months of your mortgage loan’s interest. If you want to do a mortgage refinancing that has these types of penalties, make sure you have enough funds to cover them.
•Pay attention to interest rates and closing costs.
A lender might be able to provide you with a lower monthly payment through mortgage refinancing with their company but this does not automatically make them the best choice. If interest rates or closing costs are too high, avoid the lender.
Final thoughts
•Get everything in writing. Once you decide on a mortgage refinancing lender
make sure you get all of your mortgage refinancing terms written down on paper. This includes the agreed upon interests rates and closing costs. It is also good to ask questions about pre-pay penalties or any other types of penalties that might be associated with the mortgage refinance. Lenders will avoid this type of information if they feel it will be a deal-breaker that will prevent you from refinancing with their company.
Be very careful & make sure you follow these steps in order to find the right mortgage company to assist you & the correct refinancing options available to you.
