Thanks to the weak economy, mortgage rates are at all time lows. For this reason, homeowners are interested in mortgage refinance options that save money. But mortgage refinancing is not for everyone. Understanding what makes for a positive refinancing experience is crucial if you want to make an informed decision about refinancing options.
When you apply to refinance, you will be asked to provide details on your current mortgage. The process will go faster if you have your documents handy. You do not want to "guess" answers or provide estimated dollar amounts or time periods.
Additionally, you can save money by having your paperwork in order. You can receive a credit by the title company if they have to do less work. You may be able to use the property survey from your initial mortgage as long as you have not made significant changes to your home.
You need to know the current value of your home if you want to refinance. The recent housing crisis has resulted in a plummeting of home values. Your local government's website will have information on your property value. Understand this may not be current and is intended to be an estimate. It is common for homeowners to overestimate the value of their homes.
Do not forget that factors beyond your control are included in property valuation. Neighborhood property values, crime rates, and school quality are just a few of the factors that are used to determine home values. When applying for a refinance loan, you will be asked to estimate your home's value and an appraiser will be sent by the lender to provide an independent assessment of your home.
Making excessive credit card purchases or getting new cards can work against you if you want to refinance. Lenders often view these actions to mean you are having financial difficulties. And this makes you a high risk borrower from their point of view.
Part of your credit history that lenders pay particular attention to is your payment history to your current mortgage lender. You should continue to make payments when you apply to refinance. It is possible for completion of the refinancing paperwork to be delayed and being late with a mortgage payment significantly impacts your credit. If you overpay your current lender, you will be refunded that amount.
A mortgage refinance can be a positive experience. You have several opportunities to save money throughout the process including looking for less expensive home insurance. The key is to mortgage refinance is to do your homework and prepare in advance.
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