Refinancing mortgage is something that comes to the mind of most homeowners, but they don’t really bother to really pull it off. They keep delaying it on one pretext or another, and finally junk the idea altogether. That happens because most homeowners are simply lazy and are afraid of the seemingly complex refinancing process. If that is the case with you, it’s time to get rid of this notion. With little persistence and some bargaining skills, you can actually grab a phenomenal deal.
Here are 7 mortgage tips to make your life easier when you go for mortgage refinancing:
Prepare for Paperwork
Many homeowners are afraid of mortgage refinancing because of the long paperwork that it entails. This is also the hardest part of the whole process. If you’re able to ready the required documents before applying for this process, half the job will be done. So, collect your tax returns, W2s, bank statements, latest paystubs, and other documents that serve as proofs of your income.
Repair Your Credit
Check your credit score and pull a copy of the report before the process of mortgage refinancing starts. If your credit score is above 740, you’re lucky. However, if you have a low credit score, start planning to repair it. You can repair it by making timely payment of your credit card bills and reducing the debt owed to you.
Shop for Different Offers by Different Lenders
Rates are low; still, a gap of one percentage point is possible between the best and the worst deal. Some large lenders have raised their rates for holding the volume down. You can compare the rates offered by different lenders on websites like HSH.com and Zillow.com and ask for estimates from at least 2-3 lenders based on your comparison of different lenders. Call them and ask whether they can refinance your mortgage; this will give you a much better idea of the mortgage refinancing market.
Pay Attention to Origination Fee
Origination fee should be also taken care of because it may vary greatly depending on the lender you choose. Do a thorough search. Once you have a better idea of the market, you’ll have the necessary ammunition for negotiating a better deal.
Give MortgageRefinancing at Fixed Rate a Try
In case you’re concerned about the increasing interest rate on your adjustable-rate mortgage or on your home equity line of credit, opting for a fixed-rate product would be a better choice. Your rates will be locked and you’ll have a more predictable monthly payment to make.
Calculate Your Break-Even Point
The ‘break-even’ point is when the savings made from refinancing start to outweigh the immediate cost of refinancing. Opting for it, however, doesn’t make sense if you’re planning to sell your home in the coming years.
Hire a Mortgage Agent
Going for a mortgage broker would be a good idea if you don’t want to avoid the cumbersome legwork associated with this process. Mortgage agents are people who are well aware of the whole process and can help you get your task done easily.
The above-mentioned tips may look simple; but they can help you from being lost in the mortgage refinance rush and will always keep you ahead in the game after you have submitted your application.
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