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Refinancing your home mortgage can come with
some great perks. If you do it with no money out
of pocket, you can skip one to three mortgage
payments. You can save money on your payment or
pay off your entire mortgage faster when you
have better terms. Here are a few things to pay
attention to when you refinance your mortgage
loan, to make sure that you don't overlook
anything that you might regret, or that can
cause you problems later:
1. Apply for a pre-approval to many different
lenders to make sure you are getting the lowest
rate possible. When you do this, make sure that
with the initial pre-approval application, the
lender is not pulling your credit history. You
will want to reserve your credit pull for the
lender that you are most likely to work with.
You can decide that after you have gone through
the preliminary pre-approval process with a few
lenders. Each time your credit is pulled, it
docks your credit score just a little. If you
have too many inquiries, it could keep you from
refinancing your mortgage loan with the lowest
rate possible. When you pre-apply for home
mortgage loans online, most lenders or mortgage
service companies will not initially pull your
credit. Check for information about this on
their website. They will usually tell you
whether or not they are going to pull your
credit. Also, if on the application you do not
give them your social security number, they
cannot pull your credit. If, on the application,
they ask you to describe your credit, they are
probably not pulling your credit.
2. Make sure that your original mortgage does
not have a pre-payment penalty or early payoff
penalty of any kind. Sometimes people will get
into their mortgage with the mortgage having a
pre-payment penalty and they will not even know
about it. Pre-payment penalties usually range
from 6 months to 3 years with a penalty for an
early payoff. The penalty is usually about the
amount of 6 months worth of your mortgage loan
interest, but this varies. You would have to be
able to have some significant payment and
interest savings on your refinance loan to
justify refinancing a mortgage loan with a
pre-payment penalty.
3. When evaluating different lender offers, in
the mortgage loan pre-approval process, pay
closest attention to the interest rates they are
offering & the closing costs. These are the
two biggest factors that will help you figure
out which lender is right for you. If one of
these two factors is too high, it could offset
the benefit of refinancing for you.
4. Get your interest rate and closing costs in
writing as soon as you decide on a lender to
work with. Get your lender to give you a
commitment in advance of all of the costs that
will be involved with your loan. Find out if the
refinance loan you are getting has a pre-payment
penalty as well. Sometimes lenders will leave
out important information like this, if they
think it might scare you away from refinancing
with them.
To view a list of highly recommended refinance
mortgage lenders, most of which will not pull
your credit in the initial application, visit
this page: Recommended
Refinance
Mortgage Loans
About the Author
Carrie Reeder is the owner of
http://www.abcloanguide.com. ABC Loan Guide is
an informational loan website with informative
articles, the latest finance news and lists of
recommended mortgage lenders.
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