Do you know how to refinance a home loan? If you need to refinance or want to explore your options, there are a variety of mistakes to avoid.
Those who don’t check their credit first, those who don’t understand that a refi loan is treated in a similar manner to the original mortgage, and those who don’t shop around for a lender set themselves up to pay more for a loan that is supposed to benefit them.
Avoid these common mistakes when exploring your refinance loan options:
Refinance Loan Mistakes: Not Checking Your Credit Scores
When you applied for your original mortgage, your credit reports were an important part of the process. They will be again, in much the same way in most cases. Know your credit scores and financial information before you apply.
Refi Loan Mistakes: Not Shopping Around For A Participating FHA Lender
Shopping around for a lender means comparing rates, terms, and expenses on the loan. Don’t assume you have to stay with the original lender to refinance-you do NOT have to do so! Shopping around for a new participating lender could lead you right be to your current loan officer if the rates are terms aren’t competitive enough, but don’t you want to check to see if there’s a better deal waiting for you elsewhere before deciding on your original lender?
Loan Mistakes: Refinancing For The Wrong Reasons
If you have a short-term financial need and are thinking about getting a cash-out refinance loan, consider that a long-term loan to fix short-term problems may not be the best financial decision. Refinance your home, but do it for reasons that make financial sense over the long term, not just the immediate financial need.
FHA Refinance Loan Mistakes: Not Negotiating
Haggling with your loan officer may be uncomfortable for some, but if you simply assume that loan fees and expenses are non-negotiable, you cheat yourself out of potential savings by not trying to negotiate the terms of your loan. Remember, the lender wants the transaction as it is profitable for the bank; they have incentive to work with a financially qualified borrower even if the borower wants to talk the lender into a lower fee.
Talk to a loan officer about your home loan needs today-you will be glad you did, and there is no obligation when discussing loan options. You are not required to commit to a loan just for talking about your options.