A home mortgage refinance can save you a lot of extra money that you can use to pay bills, home improvements, or whatever you want. Refinancing a home mortgage can also help you save your home if you have missed some payments and are looking at losing your home. The money savings that can be has through a refinance should allow you to start to claw your way out of debt. Remember though that refinancing a home loan is a serious deal and can be a costly mistake if it is done wrong. I have included 3 of the most common and expensive mistakes that are most often made. You should try your hardest to not make these mistakes.

First Mistake: Refinancing into too high of a mortgage rate.
Carefully look over and consider the interest rates when refinancing your home. If the offered interest rate is the same as your current rate it may not be a good tie to refinance as you will not save too much. However, if the rate is 1% or more lower than your current rate, you could be in for good size savings. Never refinance your home at a higher interest rate unless there is no other option.

Second Mistake: Borrowing too much money.
Commonly when people refinance they borrow too much money. Always remember that the more you borrow the more you pay, and everything needs to be paid back. Think about this before you refinance for more money than is actually required to cover the mortgage. Do not put your home at risk because you borrowed a few thousand dollars when you refinanced.

Third Mistake: Do not ever forget about closing costs and fees.
There will always be some kind of closing cost or fee when you refinance your home. The amount of these costs varies from lender to lender but you should expect to pay a few thousand dollars in closing fees. If this is not going to make refinancing a financially sound thing to do you may want to look into a home equity loan. Home equity loans have no closing costs or fees.


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