5 Mortgage Refinancing Tips

5 Mortgage Refinancing Tips

Homeowners everywhere need to save money. Their has been a lot of talk recently about mortgage refinancing and its potential to save a homeowner a lot of money on their home loan. Mortgage refinancing, depending on your personal finances, can be a good or bad decision. Here, I have included some tips which will help, and could save you a lot of money, should you decide to refinance your home loan:

1) Mortgage Refinancing with Points or without Points

Lowering interest rates should be the ultimate goal of a homeowner who is looking to save money. Homeowners will need to figure out the benefits of paying points up front, versus having a lower interest rate. Depending on what you choose, and how long you plan on living in your home, you need to figure out the benefits taking these factors into consideration.

2) Mortgage Interest Rate Games

Do not be a victim for mortgage lenders who advertise 0% interest rate home loan refinancing. Typically, these mortgage lenders will try to get you into a low interest arm (adjustable rate mortgage) loan, which will inevitably skyrocket in the future, and leave you in a bad financial spot, again.

3) Watch out for hidden fees and costs associated to refinancing your home loan.

If it seems like the new mortgage rate you are able to get is much lower than you thought it would be, there is probably a catch. Make sure to find out how much all associated closing costs and fees are prior to signing and mortgage refinancing deal.

4) Get a “Good Faith Estimate”

A good faith estimate is a document which is a valid quote for a mortgage which is valid for 3 business days. Take this time to carefully review and compare your potential mortgage to other lenders options.

5) Know how long you plan on living in your home.

Sometimes the costs of refinancing a home loan can be outweighed by the savings if a homeowner is not planning on living in the home for an extended length of time.

Typically 6 years is when homeowner breaks even and will start to see savings from refinancing a home loan.

Advice On Mortgage Refinancing

Homeowners everywhere need to save money. Their has been a lot of talk recently about mortgage refinancing and its potential to save a homeowner a lot of money on their home loan. Mortgage refinancing, depending on your personal finances, can be a good or bad decision. Here, I have included some tips which will help, and could save you a lot of money, should you decide to refinance your home loan:

1) Mortgage Refinancing with Points or without Points

Lowering interest rates should be the ultimate goal of a homeowner who is looking to save money. Homeowners will need to figure out the benefits of paying points up front, versus having a lower interest rate. Depending on what you choose, and how long you plan on living in your home, you need to figure out the benefits taking these factors into consideration.

2) Mortgage Interest Rate Games

Do not be a victim for mortgage lenders who advertise 0% interest rate home loan refinancing. Typically, these mortgage lenders will try to get you into a low interest arm (adjustable rate mortgage) loan, which will inevitably skyrocket in the future, and leave you in a bad financial spot, again.

3) Watch out for hidden fees and costs associated to refinancing your home loan.

If it seems like the new mortgage rate you are able to get is much lower than you thought it would be, there is probably a catch. Make sure to find out how much all associated closing costs and fees are prior to signing and mortgage refinancing deal.

4) Get a “Good Faith Estimate”

A good faith estimate is a document which is a valid quote for a mortgage which is valid for 3 business days. Take this time to carefully review and compare your potential mortgage to other lenders options.

5) Know how long you plan on living in your home.

Sometimes the costs of refinancing a home loan can be outweighed by the savings if a homeowner is not planning on living in the home for an extended length of time.

Typically 6 years is when homeowner breaks even and will start to see savings from refinancing a home loan.

Refinancing your mortgage might need a little bit of your attention at any given time. After all it is not really a small decision to make as it definitely affects your life and possibly your future as well. When it comes to mortgage refinancing it is always wise to get all the tips and advice you can get in order to avoid making mistakes and enjoy the benefits of refinancing even more. For some people, refinancing their home loans might be the only option they have to be able to stay on in their homes. Different people take on mortgage refinancing for different reasons. Regardless of the reasons, once you have decided to refinance your mortgage the question you might want to give some serious thought to is what is the best possible way to be able to get the best interest rates?
Getting pre-approvals for your loans may be a smart way to start things off. With so many mortgage refinancing options available, it would not hurt to shop around for good prices so that you will get the best rate available by applying for pre-approval with different home loan refinancing lenders. It may be a good idea to ensure that the lenders are not doing any credit checking behind your back. After all your credit history is considered as private and confidential and no one including potential creditors may access your credit report without your authorization. During the process of pre-approval, it would probably be wise of you to compare mortgage rates among the different lenders. Once you are qualified, you may authorize the company that can give you the best mortgage rates to pull your credit history.
Pre-payment penalties are definitely a pain in the neck. The penalties might seem trivial to you because the amount you have to pay monthly is probably just a tad more than usual but if you add it all up you could probably have saved thousands of dollars if you had opted for a mortgage refinancing that does not have any pre-payment penalty clauses in it. As pre-payment penalties may be considered as additional or extra expenses when it comes to your mortgage payments, it is advisable that you make sure you have more than enough funds to cover them.
Interest rates can normally be one of the major deciding factors when it comes to selecting the best home refinancing deal ever. You may want to find out the current refinancing mortgage rate and compare the figures given to you by several different mortgage refinancing companies. Bear in mind that lower interest rates might not actually give you the best deal. This is because although the interest rate alone is significantly lower, you might also have to pay for other fees or charges such as purchasing points, closing costs and even taxes. These extra charges might even cause you to have to pay more than originally intended. So it may always be a good idea for you to come up with a maximum figure that you can spare every month to make due payments.
As with almost everything else in the world, it may be recommended that you get everything in writing. It is advisable to get your creditors to include the entire mortgage refinancing terms including all the hidden charges such as closing costs, purchasing points or taxes written or typed down on paper. This is to avoid any future disputes. You may do well to remember not to sign anything unless you are totally confident with the deal yourself. But prior to that, it is advisable for you to ask all the questions you feel that need to be asked.
Mortgage refinancing is not necessarily a bad thing but it may always be good for you or anyone else for that matter to gain all the knowledge you can about the matter.

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