Your kids are growing and your house is getting smaller. Thinking big? Go ahead and get that second loan, but you have to know that refinancing mortgage loans should not be taken lightly. Get to know the best refinancing strategies before you take out a loan. You won’t regret it.
Are you good enough?
People turn to refinancing mortgage loans for different reasons. Some people need bigger homes for their growing family. Others resort to refinancing mortgage loans in order to reduce monthly payments. Yet others refinance to shift to other types of loans, while some refinance to build equity faster. Whatever your excuse is, there are a few things you should know about mortgage refinancing.
Before you head off to your lender to refinance your loans, you should be able to assess your personal eligibility to refinance, if only to spare yourself the pain of being rejected just in case you’re not good enough. Ask yourself basic questions like:
1. How big a house do I need?
2. How long do I plan to stay in my home?
3. How many years are left on my current loan?
4. Do I have enough resources to cover the expenses that come with refinancing mortgage loans?
Answer these questions as best as you can. These questions will not only determine your personal qualifications for refinancing mortgage loans, but will also help you decide the type of mortgage to take on. Depending on your needs, you can choose from the different terms and interest rates offered by a lender.
If you pass your own rigid personal assessment, you’re now ready to face the big guys – the lenders. Based on your income, property value, existing mortgage information, and other pertinent data, the lender will confirm your eligibility for refinancing mortgage loans. They have the final word, so cross your fingers and hope you’re all on the same wavelength.
Do you have what it takes?
So you’ve passed your evaluation with flying colors. You can now begin the process of refinancing. Mortgage loans may be refinanced by the original lender. But it will also be a good idea to contact other companies and compare notes. If you find something better, by all means, switch lenders. Nobody’s stopping you.
Be prepared to shoulder new fees aplenty, however, regardless if you’re switching lender or not. After all, they’re all running a business. Expect expenses such as closing fees, application fees, title insurance and title search fees, appraisal costs, discount points, loan origination fee, prepayment penalties, and legal service fees with your refinancing mortgage loans. The cost of refinancing mortgage loans varies from one case to another. In some cases, a new appraisal will not be required, especially if you’re sticking to your old lender. Other fees may be negotiated or waived, so turn on that charm and you might get lucky.
Want to kiss those fees goodbye?
If you feel that additional expenses are unjustified, put your righteous indignation to use and contact lenders that offer no-cost refinancing. Shop around for lenders that do not require up-front payments for closing fees and applications fees. While some lenders stick to their promise of no-cost refinancing, there are some that don’t.
Take the time to visit possible lenders. Play devil’s advocate and show up armed with a list of questions to ask the lender. After all, asking questions is your right. Compare the offers and other important information gathered, and come up with a shortlist. Keep an eye out for hidden charges and other unnecessary fees charged by the lender.
Working with lenders that use automated underwriting will speed up your application process. If you’re in a hurry, automated underwriting decreases the amount of time it takes to produce a loan approval. It also reduces the initial refinancing fees. Lenders that use automated underwriting do not require property appraisal, so that’s one expense down the drain.
Indeed, refinancing mortgage loans can help you, but if you’re not careful, it can give you more headaches than your kids or a hangover. It doesn’t pay to be hasty, so take your time. They’re not going anywhere.
Need those refinancing mortgage loans? Visit whataboutloans.com today. Also check out the information on loan refinance Florida and California home loan mortgage refinancing.
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