4 Tips for Refinancing a Mortgage
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1. Work with a Trusted Mortgage Lender – It is imperative that you work with a loan professional that you trust. If you need a VA mortgage, make sure that you work with an experieinced VA lender. If you need a FHA refinance, it’s in your best interest to allign yourself with a loan company that understands the FHA loan programs inside and out.
2. Shop for the Best Refinance Rate Online - Spend some time doing your due dilligence and compare quotes from competitive lenders. Strive for a no cost mortgage refinance loan, because it can save you thousands of dollars.
3. Beware of Mortgage Insurance – When refinancing a mortgage, almost a third of homeowner could pay a portion of their home equity to eliminate mortgage insurance. Borrowers don’t realize that FHA loans charge monthly mortgage insurance. If you have the ability to make some cost-effective home improvements, you may be able to get the value increased enough to wave good-bye to mortgage insurance. Another method homeowners do is to use your credit cards to pay down the balance of your mortgage with credit cards, but we don’t recommend increasing your revolving debt to get rid of mortgage insurance. But, if you are borrowing more than 80% of your home’s value, you will be hit with private mortgage insurance, costing you hundreds a year.
4. Ask About Lending Fees – Fees are a hidden cost of many mortgage loans. By law, lenders must disclose fees within three days of a loan application. Fees can go by many names like – document prep fees, courier fees, administrative fees, and more. When comparing home refinance loans online, request a list of fees from several lenders. Add these loan fees with the mortgage interest incurred. With these calculations, you may be surprised that the most cost-effective refinance did not have the lowest mortgage rate. Read more Mortgage Refinancing Tips
