Mortgage refinancing applications are skyrocketing across the country. Recently mortgage rates have dropped to near record lows all over the country. The huge increase in refinance applications is just the rush of homeowners trying to take advantage and save themselves some money. By locking in a lower interest rate than you currently have and practicing a little patience a home mortgage refinance may be the right thing for you to do.

1)Not getting your mortgage refinance quote on paper.
Make sure to get any quote that is appealing to you on paper in writing signed by the lender. Although there are trustworthy lenders you can not rely only on word of mouth. With a written quote there is no way that last minute changes can effect anything or drive up costs. Ideally you would get the quote printed on letterhead from the lender or bank and signed.

2)Getting a home appraisal if not needed.
Typically the mortgage lender will have appraisers they use who will take all your homes details like square footage, number of bathrooms, bedrooms, etc., and compare them to the details of recently sold homes in the neighborhood. Generally you are not going to be asked to get a second appraisal which is independent of the mortgage lenders appraisal. So unless there is a big difference between the appraised value and what you think the value is getting a second home appraisal may be a waste of money.

3)Running up your credit before refinancing your mortgage.
Extending your credit to its limits before refinancing is a red flag to potential mortgage lenders and banks that your refinance is not to save money but to get cash back and spend it unwisely. They see that as spending money you do not know you will get and that is a sign of a potential problem down the line. A lot of different mortgage lenders have policies against this which will cost you more. If you stretch your credit to its max just prior to refinancing, it will be much harder to do.

4)Using the assumed value of your home as appraised by the tax assessor.
County tax assessors only calculate rough value for properties in given neighborhoods
and these are not exactly a good estimate of your homes actual market value. There usually is a sizable difference between the amount they come up with for tax purposes and the markets going rate for your home. Upon sale of a home though a tax assessor will always redo the quote for the tax assessment from the information obtained from the sale.

5)Refinancing while having a second home mortgage.
Generally lenders will examine both loans you have separately and offer to refinance them individually. Ask any potential mortgage lenders if having a second mortgage will seriously reduce your chances at savings through refinancing.

Always make sure to practice patience when looking for the best refinance deal. Ask plenty of questions of any potential mortgage lenders and get comfortable with the terms and conditions of any loan before signing. Get quotes and compares them to each other. Often lenders will meet or beat their competitions quotes.

-M Petrone

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