When interest rates are low and the prospect of saving thousands of dollars on your mortgage is presented to you, it can be easy to jump into a deal that looks good, but isn’t really as great as you think. As you consider refinancing your mortgage, it’s important to know what to expect so you don’t get burned in the process.
Expect there to be Costs
Refinancing your mortgage loan is not as simple as signing a new contract and getting a great deal; there are fees associated with refinancing your home mortgage and your existing loan may have a prepayment penalty. Make sure you are aware of how much it will cost you to refinance your loan to ensure you will be able to obtain the financial benefit you’re anticipating.
Expect to Determine your Eligibility
Just because interest rates are lower, you still may not be eligible for the lower rate. Several things will be taken into consideration when determining your eligibility for a refinance loan, including your credit score, your income and assets, your outstanding debts, the value of your property and more. Don’t get your hopes up before you know you are eligible to apply for the loan you desire.
Expect to Shop Around
Since your home is likely your most valuable asset, it is important to choose your mortgage broker carefully. Different brokers will offer different rates and terms—and comparing different options can help ensure you don’t get burned by an unscrupulous broker. Be particularly wary of unsolicited advertisements you receive. Always compare several options from different brokers and make sure you understand exactly what you are getting into before agreeing to new terms when refinancing your mortgage.
Expect to be your own Advocate
Every year, thousands of unsuspecting homeowners are duped by unscrupulous mortgage brokers who are more interested in lining their own pockets than helping you save money on refinancing your mortgage loan. As you seek to get the best deal on a refi loan, make yourself an informed consumer. Learn about the tricks of the trade, like yield spread premiums, that can keep you from getting the best deal possible.
Arm Yourself with the Insider Information you Need to Get the Best Refi Loan
With my free 6-part video series, you can learn everything you need to know to avoid junk fees and get a wholesale rate when refinancing your mortgage. Gain insight from a mortgage broker with over 27 years of experience in the field and learn how to refinance your home mortgage without overpaying.
Sign up now for instant access to my FREE video series that will save you hundreds of dollars on your monthly mortgage payments—guaranteed.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
