There are lots of people who are looking to take advantage of low interest rates to refinance their homes. This provides homeowners with an opportunity to save tens of thousands of dollars over the life of the loan. It could also allow homeowners to access equity to finance a home renovation or shave years off their mortgage. On the other hand, there are also a lot of people who make mistakes during the refinancing process. What are some of the mistakes that everyone should make sure they avoid?
Avoid Saying Yes To Loan Forbearance On A Mortgage
First, try to avoid mortgage forbearance if you can. If homeowners decide to pursue mortgage forbearance, they might have a bit of extra cash on hand because they will be able to skip a few payments. On the other hand, this could signal that the homeowner has issues related to his or her cash flow. As a result, homeowners might not get the best offer possible when they apply to refinance their mortgage down the road.
Always Check The Credit Score Before Applying
Next, homeowners should always check their credit scores before they decide to apply for a refinancing opportunity. It is not unusual for people to have mistakes in their credit scores. Nobody should have to pay for someone else’s financial mistakes. Homeowners have to remove these inaccuracies from the credit report before they apply for a refinancing opportunity. That way, homeowners have access to the best terms possible.
Check The Estimate Before Agreeing To A Refinance
Finally, homeowners also have to check the estimate before they agree to a refinance. Even though there are opportunities to save a lot of money, there are other fees involved. These could include points, origination fees, and other fees that could be included in closing costs. Homeowners have to be ready to pay these costs if they are going to refinance their loans.
Avoid These Mistakes When Refinancing
These are a few of the most common mistakes people make when they go through the refinancing process. By avoiding these mistakes, homeowners can place themselves in the best position possible to save money by refinancing their loan to more favorable terms.Share
About the Author:Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.