Ten common refinance mistakes
April 26, 2008
The window to refinance your existing mortgage for a low fixed rate home loan is still available. There are some simple things every home owner should know to ensure they get the best loan for their refinance scenario. Some of the most common mistakes made by home owners who want to refinance their loan are as follows:
- Not knowing what their credit (Fico) score is
- Avoiding calling their existing loan servicer
- Increasing their house payment by shortening their loan term. ( you can always add extra on a 30 year term)
- Focusing too heavily on the rate and not examining the cost and loan apr
- Shopping with multiple lenders, but not calling them on the same day
- Trying to find a deal that does not exist in the market
- Accepting a loan with a prepayment penalty
- Ignoring the benefit of buying down the mortgage rate through discount points
- Failing to eliminate ineffecient debt (credit cards/revolving debt)
- Not working with a professional who establishes a plan and review your goals in detail
This list could certainly go on and on as home owners have discovered over the years that shopping for a mortgage can certainly be a stressful process. The best advice to anyone who may be considering refinancing their mortgage is to start with a complete review of their finances, closely examing all of their debts and establishing a long term financial plan for their debts as well as growing their assets.
