If you’ve been waiting for an ideal time to get a home refinance, fall/winter is the time year to get into action mode. In spite of being slightly underwater on your loan, if you have a good credit rating, some perseverance coupled with reasonable shopping skills can help you bag the best deals this season.
Here are some useful recommendations to help you make your mortgage plans:
Stop delaying. If you have not refinanced your home in the recent past, you’re probably paying high rates on your mortgage. These record-low rates aren’t going to last forever, so grab them while the going’s good. Rates are expected to gradually increase and you don’t want to be left with only regrets and high interest rates.
Get proactive. Home prices are on the rise and may not fall in the near future. So get up and make a decision while rates are near the bottom. It’s an excellent time to get low mortgage rates. If a home is affordable and you’re eligible for a mortgage, you may never get a chance to own a home for less.
Ensure good credit ratings. Credit standards continue to remain tight and are not expected to get any better in the near future. If you want to apply for a mortgage, your credit is undoubtedly one of your most valuable assets. Most lenders insist on an impeccable credit history of at least one year. Your credit score needs to be at least 720 to be able to get the best rates. At a credit score of 680 plus, you might still manage a good deal, but if it’s lower than that, it might be difficult to get approval.
Carefully study your credit report before applying for a mortgage. Sometimes paying off a part of your credit card balance can result in a quick boost of your credit score. Using more than 30% of available credit generally has an adverse effect on your score. Make sure you check for any credit errors and get them corrected before you submit the loan application.
Try to get debt-free sooner. If you dream about being mortgage free at the earliest, the current low-rate environment can prove to be an ideal opportunity to convert your long term mortgage into a loan with a shorter tenure. Just ensure that you’re in a position to pay the marginally higher payments on the new loan and also have some money saved for unforeseen emergencies.
Perseverance is the key. Get to know your house’s worth using a free online valuation website like Neighborhood IQ. If you’ve failed to refinance in the past because you owe more than your house is worth, now’s the time to give it another shot. Various government regulations have been revamped for the benefit of such owners, no matter how deeply they’re underwater. The obstacles in the refinancing process are gradually being removed and the situation is looking better each day. If one lender rejects your application, don’t accept it as final. Try to find another lender willing to help you.
Work with your lender. If you have problems making your payment, don’t bypass your mortgage provider. There are many new programs to assist such borrowers. Lenders are often more than willing to work out issues regarding delinquent loans by modifications and short sales for homeowners who cannot afford to stay in their homes. Though it might be frustrating, communication with your lender is always your best tool.
Shop for good rates and service. Even when mortgage rates appear to have bottomed out, you should still take time out to shop for the best possible deal. Get quotations from multiple lenders and compare interest rates, closing costs, and services offered. Give preference to lenders with a reputation of closing in good time. Begin with referrals from relatives and friends when looking for a lender and note the online reviews of other borrowers regarding the lenders or brokers you’re looking at.
Expedite as much as possible. After your mortgage application is submitted and a rate is locked, consider it as the beginning of a race. Make sure you submit all documents requested within 24 hours or as soon as you can. Delays in your responses to the lender or allowing the appraiser into your home will waste valuable time. Because lenders are almost always extremely busy, lost paperwork or other requests at the last minute are likely to delay your closing. This may result in losing the locked rate. Keep following up with your lender every week to ensure all is well and the process will go through smoothly.
A little research can mean an easy and pleasant refinancing experience while maximizing your money. Home Loan Advisor can analyze your property, current market conditions, local market comps, and other variables in our proprietary algorithm as well as match you with potential lenders! To assist you in the refinancing process, you can get a free home value report from Neighborhood IQ and find out what your home is really worth.