Here’s What Not to Do When Refinancing

Are you considering a refinance for your current mortgage? Then you need to be sure that you understand the mistakes that you need to avoid before you refinance your mortgage with any lender.

Here’s what NOT to do when refinancing your mortgage:

Not checking out all of your refinancing options - Before you decide to refinance, you have to shop around and learn what your options are. You don't want to make the mistake of not shopping around and simply staying with your current lender. This can lead to the wrong refinancing option for you in particular. Shopping around will help you ensure that you are definitely getting the best deal possible for your needs.

Signing any loan documents without first carefully reading over them – It’s wise to review every document for refinancing before you close the deal. Otherwise, you will easily find that there was some essential information that was missed.

Not understanding what your break-even point will be for refinancing - Are you aware of how much time you will need to recoup from the upfront transaction costs? You need to know when you will break even and even when you will start getting ahead so you can make sure that you are not going to be in trouble with your mortgage if the break-even point is too far into your future. 

Not providing the mortgage company with the refinance documents on time - If your lending institution is requesting that you provide them with additional documentation like verification of employment or income and expense statements, then you have to be sure that you get them to them right away. Delaying in providing these can lead to costly delays that you could have avoided if you had just gotten them in on time. 

Not having the estimate of your mortgage refinance put down on paper - Lenders and brokers are required by law to give you a written statement for the fees will be for refinancing. You want to get this so you can have it with you at the closing to ensure you get the deal that you agreed to.

Ignoring your credit history-The most common mistake that homeowners make is ignoring their credit history. You should be aware of your exact credit history before refinancing. Many people do not know whether some mistakes were made on their credit reports and ends up taking high interest rates. This high loan and credit fees ends up disqualifying them from mortgages or even missing their chance of buying new homes or refinancing. The best way to avoid this is to always know your credit score as well. Also, check your credit report regularly to make sure there are no mistakes.