5 Expert Tips for Home Refinancing: Make Sure you Don’t Miss Them

5 Expert Tips for Home RefinancingHome refinancing on your mind, but unsure of where to start? You’re in luck. Let us help you by giving you some expert tips so you can get started.  But before you jump into refinancing, make sure it’s something that’s for you – because refinancing isn’t for everyone.

The good news is that mortgage rates have gone down, and so refinancing is a good option for most people these days. Here are some tips you should read before you sign the dotted line.

Check the rating.

It’s a good idea to find out your credit score before going for a refinance. A bad credit rating can disqualify you from getting a home refinancing approval, or it can result in higher mortgage interest rates. It’s a good idea to check your credit reports once a year. There many credit issues, like outstanding balances that can lower the credit score.

Know the worth of your home.

The housing market is a fluctuating one. This can be a good or bad thing for your home value. You can try a trusted website like Home Loan Advisor to check the real value of your house. Its value will give you an accurate idea because it affects the loan rate when you get home refinancing. The general rule is that the higher your home value is, the better rates you’ll get.

If affordable, select a shorter loan.

When you get a home refinance, you can get a shorter term loan. The benefit is that a large part of your monthly payments goes towards the principal amount instead of the interest. Once the principal is paid off, there is no more interest to be paid. So if you get a 30-year old loan, for the initial 15- 17 years, a large part of your monthly payments constitutes of interest. But if you opt for a 15 year loan, after about 5-6 years, you’ll start paying principal with your monthly payments.

Shop for rates.

Shopping for mortgage rates isn’t as fun as shopping for a new phone or a new gadget, but it is necessary. This is because the refinancing rates keep fluctuating from one lender to another. But of course, don’t expect wildly different rates.

Check for any prepayment penalties

Let’s say you took a long term loan and then you started making better money than before. You might want to finish that loan before its stipulated time period. However, if you repay the entire loan too early, there might be some prepayment penalties. There are different types of prepayment penalties and you should discuss with the loan agency before you go for home refinancing.

Make sure that you select the right refinancing option. With that said, keep in mind that the cheapest isn’t always the best. There is a reason why some things are more expensive than the others. Consider the features of each long along with the hidden costs.

That’s it! These are the 5 tips that you need to bear in mind before getting mortgage refinancing. Make the right decision and you’ll have the best mortgage in no time. Home Loan Advisor can assist you in seeing if you qualify for home loan, and they can do it for free!

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