Tips on Refinancing Your Home


Filed under: Mortgage Refinancing


mortgage tipsMany homeowners are faced with the question on whether or not they should refinance. If your interest rate is currently more than 5%, you may want to seriously consider this option.

According to a recent article by Teresa Mears, author Casey Fleming  says that deciding to refinance comes down to whether refinancing will actually save you money. “The biggest mistake people make,” says Fleming, “is they keep regenerating their loan so it’s never paid off.”

Mears suggests the following steps to help you make the decision to refinance.

1. Have your credit in order

Your credit score is one of the largest factors that will determine what interest rate you will get on your home loan. So, before you apply to refinance, make sure to get a copy of your credit reports and thoroughly check to see that there aren’t any errors.

2. Know your home’s worth

You will need an appraisal on your home so the lender knows its value. This will help determine how much money you can borrow. Once you know this, analyze comparable sale prices in your neighborhood to see if your home is actually worth as much as you think.

3. Gather all of your documentation

You will need to provide proof of employment, income and assets. This may include pay stubs, tax returns, bank statements, and other documents. Having all of this information ready to go will allow the process to go faster.

4. Know the closing costs

You will be charged fees by the bank, but you may also need to pay tax impounds, title, and escrow fees.  These can often be rolled into your loan but just make sure you stay informed and ask questions.

5. Weigh carefully whether to take cash out

There are times when taking cash out makes good sense, but make sure it’s the right thing for you.

6. Carefully analyze all of the documents before closing

Make sure you thoroughly go over the closing documents before you sign. It is a great idea to give yourself 24 hours to scrutinize these so if you have any questions or find any errors, you can correct them.

If you have any questions and want to know if refinancing makes sense for you, please give me a call and I’ll provide a no-obligation mortgage analysis.

Source: http://money.usnews.com/money/personal-finance/articles/2015/06/04/a-complete-guide-to-refinancing-your-home-mortgage


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