Top 5 Mistakes People Make When Refinancing Their Home

1. Choosing a​ home loan lender for the​ wrong reason (i.e.,​ the​ lowest rate,​ your existing lender.) People choose home loan lenders for all the​ wrong reasons. Getting a​ low rate is​ important,​ but it's not the​ only consideration. Lenders may offer the​ lowest rate but charge extra fees (loan fees,​ origination fees,​ copy fees) so that in​ the​ end you​ will pay more for the​ refinanced home loan even though your rate may be lower. the​ only way to​ protect yourself is​ to​ wait for the​ Good-Faith Estimate (GFE) which should list all the​ closing costs. Compare the​ GFE's from a​ number of​ home loan lenders.
But comparing GFE's is​ not the​ only story when you​ want to​ refinance your home. if​ time is​ important,​ you​ want to​ choose a​ mortgage company that is​ capable of​ acting quickly. Ask each company to​ give you​ their average closing time for loans similar to​ yours.

Ask around among your trusted friends. Find out who refinanced lately and ask them what they thought of​ the​ company. Do not assume that your existing home loan lender is​ any better than a​ new lender. Since most home loans are sold in​ the​ secondary market,​ everyone has to​ meet certain criteria,​ and your existing lender will probably require the​ same documentation as​ a​ new lender. However,​ once you​ have a​ commitment from a​ new lender,​ it​ does not hurt to​ ask your existing lender to​ beat it. Often times they will. We will get you​ the​ best rate available.

2. Not getting everything in​ writing about refinancing your home loan. Get everything in​ writing. No matter what the​ Loan Officer tells you,​ ask him to​ confirm it​ in​ writing. Do not believe someone when they tell you​ that your refinance rate is​ guaranteed. Get it​ in​ writing.

3. Not knowing the​ appraised value of​ your home. Many people go ahead and try to​ refinance their home without knowing the​ true value. There are many places you​ can get an​ estimate of​ the​ true value of​ your home for purposes of​ refinancing. Many realtor sites have home value estimators on​ their site. For the​ price of​ listening to​ a​ mortgage company try to​ sell you​ a​ mortgage,​ you​ can get an​ approximate value for your home.

Check the​ recent sales in​ your neighborhood and try to​ find a​ comparable house in​ a​ comparable location. or​ you​ can ask the​ appraiser to​ do a​ drive by and give you​ a​ verbal estimate of​ the​ value of​ your home. if​ it​ is​ in​ the​ right ballpark,​ you​ can order a​ thorough appraisal. Know the​ value of​ your home before you​ seek to​ refinance your home loan.

4. Not doing the​ math when refinancing your home loan. Do the​ math. Refinancing your home has a​ cost. you​ need to​ see what the​ cost is,​ and then determine how long you​ are going to​ stay in​ your home. For example,​ if​ you​ are going to​ stay in​ your home for 5 more years,​ and the​ cost of​ refinancing your home is​ $5000,​ you​ need to​ save at​ least $1000 a​ year in​ order for the​ deal to​ make sense. if​ you​ only save $50 a​ month as​ a​ result of​ refinancing (that is​ $600 a​ year),​ you​ will be losing money.

5. Not considering a​ 2nd Mortgage. When you​ refinance your home,​ you​ are refinancing the​ total amount. Suppose you​ have a​ home that is​ now worth $400,​000,​ and you​ only owe $250,​000 on​ the​ home and you​ want to​ take out $50,​000. if​ you​ refinance and take out $50,​000 in​ cash your new loan may be for $310,​000,​ ($250,​000 owed + $50,​000 cash out + a​ total refinance cost of​ 3% or​ $10,​000). it​ may be better to​ take out a​ 2nd mortgage for $50,​000 and pay a​ slightly higher interest rate and slightly higher points,​ but only have a​ basis of​ $50,​000 instead of​ the​ $310,​000.

For more information,​ please visit Peak Home Loans-We Get 4 Out of​ 5 Applicants Approved-24 Hour Results-Learn the​ Ins & Outs-Apply Now For Bad Credit Refinance Thank you...
Top 5 Mistakes People Make When Refinancing Their Home Top 5 Mistakes People Make When Refinancing Their Home Reviewed by Henda Yesti on August 24, 2018 Rating: 5

No comments:

Powered by Blogger.