Refinancing No No's
Are considering refinancing your home this year because you heard about the possibility of getting a lower rate? It IS worth considering for some people, but it's not for everyone. The best thing for you to do is to speak with an experienced mortgage lender at the Lake of the Ozarks and get all the facts. Truly understand what refinancing your home loan means and what your options are and go from there. We can help. MHQ - Mortgage Headquarters can be reached at (573) 302-9990. Visit www.MHQMortgage.com for more information too. In the meantime, keep reading this week's blog for a few refinancing no no's.
Refinancing No No's
DO NOT...
REFRAIN FROM LOOKING AT ALL THE COSTS ASSOCIATED WITH REFINANCING.
Typically, lowering your monthly payment is the ultimate purpose for refinancing. But it should not be the only factor you weigh. Before you even begin the refinance process, check your current mortgage documents to make sure your loan doesn't contain a penalty if you pay off your mortgage early. Weigh the amount of time you have left on your current mortgage, and factor in the refinance closing costs. Look at all fees when comparing refinance offers. Run the numbers on different scenarios by changing the loan amount, and looking at the cost with and without upfront points.
PICK A LOAN TERM THAT ISN'T RIGHT FOR YOUR SITUATION.
For most homeowners, refinancing is all about getting a better rate. But it’s also an opportunity to change the length of your loan. Typically, you’ll be able to choose from a 15, 20 or 30-year loan. With a longer loan term, you’ll pay more in interest but your monthly payments will be lower. On the other hand, going with a shorter loan term will save you money on interest and allow you to pay your loan off faster, but your monthly payments will be higher. You need to know which one makes the most sense for your situation.
AVOID DOING YOUR RESEARCH.
You may just be thinking about going with your current mortgage lender to refinance your home because of the convenience factor. However, if you’re planning to contact your current lender about refinancing without doing some comparison shopping first you could be selling yourself short. With rates still relatively low across the board, it may seem like a waste of time to shop around. But it could mean a huge difference in the amount of money you’ll save.
ADDED UNEXPECTED CREDIT ACTIVITY DURING THIS TIME.
Just like when you obtain your first mortgage, lenders will check your credit when you apply for a refinance, and they check it again just before settlement. Making major purchases on credit or applying for new credit could lead to delays in the approval process. Every time you open a new credit account, your credit score drops. Lower credit scores translate into higher mortgage rates.
Visit With MHQ - Mortgage Headquarters Today To Ask About Refinancing!
If you are interested in refinancing, we urge you to meet with one of our mortgage professionals as soon as you can to talk about your options. Rates have been fairly low since the pandemic started and it may be worth your while to at least discuss this matter. Give us a call today at the phone number listed below. You can also stay up to date on our latest announcements and mortgage-related tips by following on our social media channels listed below too.
Comments
Post a Comment