When refinancing your home mortgage there are many potential mistakes you can make. Many of the pitfalls can be avoided with common sense; however, the stresses of mortgage finance are not always black and white. The best way to avoid mistakes is not to rush; if you move too quickly it is easy to overlook details that could cost you thousands of dollars down the road. It is best to try and remain emotionally detached when dealing with your finances as this will help you remain objective and help to keep your stress level down.
Do Not Exaggerate Your Income or Assets
You might find it tempting to exaggerate your income, what monthly expenses you have, and how much money you have in the bank. This will only slow the process and could cost you favorable loan terms or the interest rate you had hoped for. The mortgage lender could even deny your loan.
Never Sign Incomplete Documents
This may seem like common sense; however, signing a blank form or something you havent fully read could cause you to agree to unfavorable terms or conditions. Loan officers and mortgage brokers do not necessarily have your best interests at heart; carefully reading all documentation could save you frustration and money down the road.
Shop Around for the Best Deal
It pays to shop around. Doing your homework to learn the lingo and shopping from a variety of mortgage brokers and lenders will save you thousands of dollars. When doing this ask for no obligations quotes. You will need to provide the lender with information on the state of your credit and income; this will allow the lender to give you a quote without accessing your credit. You should keep credit inquires to the absolute minimum when shopping for mortgage.
Negotiate for the Best Terms and Conditions
The wonderful thing about taking out a mortgage is that there are thousands of lenders to choose from that are literally falling over themselves for your business. You can negotiate for terms, points, and fees. Be sure one thing you negotiate for is a mortgage with no prepayment penalty. If you need to sell or refinance down the road you do not want to have a lofty fee from your current lender.
Do Not Fall for Pressured Sales Tactics
Mortgage lenders and brokers are in this business to make a buck. They do not have your best interests at heart and will try and sell you a mortgage with the highest interest rate, fees, and worst terms they can. Dont let a pushy salesperson force you into a mortgage. Never settle; shop and negotiate for everything you want. You will find a lender that will accommodate every reasonable request you make, it just takes some legwork on your part.
Louie Latour has twenty years of experience in the mortgage industry as a mortgage broker. He is the owner of Mortgages for Dummies, a mortgage help site devoted to saving homeowners money with a free guidebook Five Things You Need to Know Before Refinancing a Mortgage. Sign up for your free guide today at: http://www.refiadvisor.com
