Refinancing your home loan may save you money every month, but there are potential problems that may arise when you don't have the right person guiding you. As your Mortgage Planner, I am here to answer your questions and set you up for future financial success. There can be a lot of misunderstanding when it comes to how a refinance may work, so be sure to avoid these common misconceptions, myths and mistakes.
- You don't know your current credit score or you are unsure you can save money - Be certain to obtain your credit score as this will be key in determining the rate you receive. You can use the refinance calculator on my website to estimate your new monthly mortgage payment before we talk, but it is a good idea to have me analyze the numbers for you to obtain a more accurate view of what you can save.
- Opening new credit accounts and running up debt - It is important to know that lenders check your credit when you apply for a refinance and again just before the settlement. Making large purchases on a credit card or applying for new credit could cause delays in the approval process.
- Being unrealistic about your home's value - I am happy to sign you up to receive a monthly view of the sales price of homes in your immediate area so you always have an accurate picture of how much houses are selling for. Some homeowners ignore current home values in their neighborhood and overestimate how much their home is worth.
- Neglecting to consider all costs - While lowering your monthly payment is the main goal of a refinance, it should not be the only factor you consider. I will check your current mortgage documents to be sure your loan doesn't have a penalty if you pay off your mortgage early. Together, we will evaluate the amount of time you have left on your current mortgage and consider the refinance closing costs before moving forward.
- Not locking in rates - Mortgage rates change often. I will explain this process to you; but generally, a lock is somewhere between 30 and 60 days. You can trust me to advise you when the best time to lock is.
- Failing to calculate the "break-even point" - This is the date when the money you saved by refinancing your mortgage equals what it cost you to refinance. This is important because if you sell your home or refinance before the break-even point, it won't be worth your while to refinance - it will cost you money rather than save you money.
Refinancing your home can make your monthly bills more manageable or free up your cash flow. It's too easy to put off a review of your current mortgage because you don't have the facts about how much a refinance could help you. As your Mortgage Planner, I am here to make sure that your refinance process goes as smoothly as possible with no headaches. Call me today to set up a time to discuss how low rates make this a fantastic time to refinance.