Refinancing Articles
Contemplating refinancing your mortgage? We have a few tips you should read first!
We have found that one of the mistakes a homeowner makes is when they want to refinance their mortgage loan they do not spend the appropriate time shopping around for the best rates. It only makes sense to us that if you shop around for everything else why not shop around for the best refinance mortgage rates? You home is your biggest purchase you will make in your life, get the best deal possible!
So you are not sure where to start?
Before applying for a new mortgage or to refinance your current mortgage, we recommend that you first check your credit for any mistakes or outdated information. A recent federal law allows consumers to receive a free copy of their credit bureau report each year. Review your report, and make any change requests directly with the credit reporting agency. You will want to start this process at least one month prior to applying for your new mortgage, most credit reporting agencies will take up to one month to make necessary changes to your file. There are several good Credit Report Agencies available, we like to use SafeCreditReport.com to get a Free Credit Report.
After you are 100% certain your credit file is in order you will want to find and make copies of the following documents, which may be needed to close on your new mortgage loan.
Copy of your latest pay stubs
W-2 forms for the last two years
Proof of assets, including checking and savings account statements, investments, mutual funds, stocks, bonds, properties, etc.
Documentation and account numbers for outstanding loans
In addition to the documentation above, if you are self-employed, you should have a year-to-date profit and loss statement prepared, as well as copies of your 1040 tax returns – include all pages/schedules – for 2 years. If you rely on other income sources, such as alimony, child support, or social security, you will need evidentiary documents for those, as well. If you`re divorced, you`ll want to have a copy of your divorce decree on hand.
After you have all your documents availabel, you can begin to apply for your mortgage refinance loan. You should probably start with your current lender, but don`t stop there! As with any major purchase, it`s wiser to compare at least 3 different offers…possibly more. If you compare several offers you will have a better idea of what rates you qualify for, and this will give you a better negotiating position with the lenders.
After you receive your refinance offers, you will want to pay close attention to the interest rates, points and closing costs offered. Look at all three, this will give you a general view of how your offers compare. Call to the loan officers and ask them if you can negotiate a better interest rate. We have found that the initial rate offered is not always the best a lender can offer.
Usually in late January or early February consumers will find themselves strapped with Christmas holiday debt. If you used your credit cards hard by buying gifts, you should consider paying them off when you refinance your mortgage. We suggest that you are careful not to get yourself in too deep though, taking cash out will cause an slight increase in the mortgage interest rate, as well as a larger monthly payment.
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Contemplating refinancing your mortgage? Contemplating refinancing your mortgage? We have a few tips you should read first! With interest rates rising you better act not to save money!
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