If you’re considering refinancing your home to take advantage of the best refinance rates in nearly fifty years, there are a number of common mortgage mistakes that you need to know about. Overpaying the broker or falling for lender junk fees are just one of the reasons your neighbors are paying too much for their mortgage refi. Here are three common mortgage mistakes you need to avoid when refinancing with today’s best refinance rates:
Refinancing your mortgage can save you a lot of money, especially with interest rates as low as they are right now. However, there are also some things to look out for before you rush in. The following are three common, but often overlooked, mistakes that people make when refinancing that can cost them money:
Serial mortgage refinancing is a common mistake because if you don’t take the time to recoup your closing costs and loan origination fee you never benefit from lower mortgage rates. If you keep refinancing every year thinking you’re getting a better deal you’re just giving lenders the cash in your pockets for nothing in return.
Checking your credit and your home’s appraisal are also good advice before completing a mortgage refinance application. (Keeping in mind that your tax assessment is NOT an appraisal) When shopping for the lowest refinance rates remember the quotes you get are based on your credit score and loan-to-value ratio. If the mortgage rate quotes you’re getting aren’t in line with what you’re seeing advertised your credit score is probably the culprit.
Finally, extending your term length just to lower your payments might look good on paper; however, once you consider how much more you’ll be paying for your home in the long run it negates any benefit you’re gaining from lower refinance rates.
You can learn more about avoiding common mortgage mistakes on your when refinancing your home by checking out my free Underground Mortgage Videos.