Mortgage rates are so low that mortgage lenders and banks are being overwhelmed with the amount of refinancing applications that are coming in. With so many people rushing to apply for the same thing, there are often delays involved. These delays can cost homeowners money they don’t have while they wait for an answer and continue to pay a mortgage they are barely able to, or can’t afford. Here are some tips to help avoid these delays and make your application stand out amongst the hundreds of others that are still waiting to be reviewed.

Understand the Options That Mortgage Refinancing Provides.
Not all homeowners are in the same situation or require the same loan type. Many options exist for people wishing to refinance. Sometimes, people want to get into a fixed rate mortgage. Other times homeowners want to get some cash back from their homes equity. Mostly though, people want to save money on their monthly mortgage payments, and get a better, lower, interest rate.

Saving money can happen a few different ways when refinancing. Often though, interest rates are reduced and that can easily save someone thousands of dollars over the course of the home loan. Even a reduction of 2% in interest rate can equal big savings. With rates being as low as they are now, many people will easily save upwards of 5% in interest over the course of the mortgage.

Know what you need or want from a mortgage refinancing. This will help you avoid taking the time and energy to review loan types that are not what you need or are looking for. With so many options available, finding the right one will make the entire process much easier and more focused.

Know How Long You Plan on Living in Your Home.
The majority of people plan on staying in their home for a long time. For them, a fixed rate mortgage with stable, low mortgage interest rates is usually the best loan type. However, people who plan on moving or selling their home in a few years can consider an adjusted rate mortgage.

Adjusted rate mortgages are usually advised against for homeowners who will be in their home for a long time. This is because the interest rates they offer, while initially smaller, are subject to change. A lot of times though, an ARM loan offers an initial fixed rate period that has rates that are marginally lower than a fixed rate. After this period expires though, the interest rate can change. For people who are planning on selling their home sooner rather than later, refinancing into an adjusted rate mortgage might be the best bet due to lower closing costs and fees, and the fact your home will be sold before the rates can change.

Simply eliminating refinancing options that are not right for your situation will save you and enormous amount of time, energy, and possibly money. By being able to focus on the correct loan, you will ensure that you get the best possible mortgage refinancing you can. Take your time and really figure out what your goals are from refinancing a mortgage and then choose the appropriate option to help you.

-M Petrone

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