| | 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 dont
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.
About the Author:
To see a list of
recommended refinance loan companies online, visit this page: http://www.abcloanguide.com/refinance.shtml - Carrie Reeder is
the owner of ABC Loan Guide, an informational website with articles and more
about various types of loans.
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| | Posted 9/26/2006 5:18 AM - 1 View - 0 eProps - 0 comments
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