- 5 Mistakes To Avoid While Refinancing MortgageJanuary 24, 2018
Home loans have become the most favourable option for financing the dream of owning a home. However, paying off the loan can be a daunting task for many. Paying off the existing loan by taking a new loan is a choice most make for saving themselves from bankruptcy.
Below listed are 5 mistakes to avoid before choosing mortgage refinancing.
1. Not checking credit score
Before applying for a new loan, the credit score must be calculated to determine the interest rate one will receive. The worth of the house should also be decided as property appreciation can change according to the prevailing real estate trends. And if the equity is low, there are high chances for an expensive refinance offer.
2. Waiting for interest rates to fall
Waiting too long for the interest rates to fall is not helpful while trying to pay off the existing loan. It is wise to take advantage of the current low rates, while also open to refinancing again when interest rates drop.
3. Concentrating on interest rates only
Even though interest rates are important while refinancing, it is also vital to check credit points, fees and loan term. Always focus on the overall factors to avoid chances for mistakes.
4. Refinancing with current bank avoiding other options
It is advised always to compare the interest rates offered by other banks and not to depend on the bank of the current loan for special rates. Checking the rates of other banks together on the same day is important as rates vary from day to day.
5. Not reading legal documents
Signing the documents without reading or understanding them is a grave mistake. It is better to take help from an expert to understand the legal jargons to avoid future complications.
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