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5 Tips for a Home Loan Refinance

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Do you need home refinancing for cash or simply a reduced interest rate for a lower monthly payment? Have you recently been rejected by a lender because they said your credit scores were too low?  Would it help your financial state if you were approved to get a home refinance for bad credit? Nationwide is a lender that offers a wide variety of home loan refinance solutions including, conventional, jumbo, VA and FHA home mortgage opportunities.

1. Make Sure There Are Tangible Benefits to Refinancing: Many people look into home refinancing because they want to reduce their monthly payments. However, you must make sure that you will be trimming off a significant amount to make the time, effort, and cash investment worthwhile. There are costs associated with refinancing to lower interest rate on your loan. If you find you are spending thousands to save pennies, you may want to wait to refinance when interests rates are better.

2. Shop Home Refinance Loans from Reputable Lenders: You want to make sure you are getting your loan from someone you trust. Dishonest lenders will lure you in with too good to be true interest rates but may tack on fees and add language in the contract that can cost you thousands in penalties. Always check the reputation of any financial institution you choose to do business with.

3. Compare the Loan Disclosures and the Good Faith Estimate: It is always a good idea to shop around for the best rate. However, don’t stop there. Make sure you read the fine print of the loan disclosures. A bank that seems to have a great rate may have language in their disclosure that allows them to charge you an exorbitant late fee if you don’t make your payments on time. Not only do you want the best fixed mortgage rates and lowest monthly payments, you want to make sure you won’t end up paying more than you need to.

4. Avoid a Pre-Payment Penalty: Reducing years on your home loan can save you thousands of dollars in interest. Therefore, it is important that the bank you get your loan from does not charge a pre-payment penalty fee. Banks add this fee to discourage you from home refinancing or paying your loan off early so they can get the full amount of the interest payments due to them. If your loan does include a pre-payment penalty see if you can negotiate it out altogether or at least a reduced amount.

5. Avoid Mortgage Insurance: Private mortgage insurance is type of insurance that banks will try to force you to get which basically guarantees the mortgage will get paid if you default on the loan. It may sound like a great idea on the surface. But it can add up to $1,000 per year per $100,000 borrowed to your loan. Do everything you can to avoid having this insurance tacked onto your loan.

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1 Comments

1

Great post on the direction of mortgages. Your refinancing tips make sense. I am looking for advice on a jumbo loan and this article will help me to understand. Thanks bro

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