Making a mistake when refinancing your home mortgage can cost you a lot of money. Often these costly mistakes could have been easily avoided had the homeowner had done a minimal amount of research to avoid these money grabbing mistakes. Do not make predictions about where the rates will go and what to do when they hit that point. You must make a refinancing decision based on the best rates available today. Use the internet to research different mortgage rates and fees available from different mortgage lenders. Find the best deals and further research these potential mortgage lenders. Make sure to compare all aspects of each lenders offer, not just the actual mortgage rate. Sometimes a low rate comes with stricter terms and conditions. Here I have a list of 3 common things that you an avoid that will help your refinance go smoothly.

Avoid: Waiting For An Even Lower Interest Rate.
The mortgage industry is very unpredictable and tomorrows lows can be todays highs. There is no person that can tell whether rates will be rising or falling, people claim they know but they are guessing. So instead of waiting for the great rates to drop even further than they have already you should focus on getting the lowest rates that are available now. You can use the internet to quickly compare different lenders, their quotes, and their fees. Note the potential savings that can be had through refinancing and make your decision as to if it would be worth it.

Avoid: Not Checking Each Mortgage Lenders Going Mortgage Rates.
A lot of people will focus on one mortgage price for the sake of news reports or articles. In reality this is just a national average and in your area rates may be different. Plus, lenders themselves offer different rates and have their own check list for determining the interest rate. That is the reason that when you see interest rate numbers they may vary from source to source. Also, a mortgage lender takes into account your credit to give you a mortgage rate. So you should always ask for a loan estimate which includes all closing costs.

Avoid: Thinking That Just a Lower Interest Rate Will Save You Money
Just because you are able to refinance at a marginally lower interest rate than you currently have does not mean a refinance is going to save you money. You need in general to get at least 2% lower interest rates to start to see savings. Even then with closing costs added in you may not break even for up to 4 years. It is best to not refinance if it will take more than 4 years to break in.

Make sure you understand fully the expenses, fees, and costs associated with a mortgage refinance before signing anything. Make sure it is clear exactly how much your mortgage payments will be and when you can expect to break even after refinancing and start to see real savings.

-M Petrone

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