Many home buyers find themselves in a disagreeable situation after refinancing their home loans.  Listed below are come home refinancing mistakes that consumers commit and must be avoided:

  • Refinancing your home with your present lender without considering other home loan lenders. Sometimes, refinancing your home loan with the same lending company can win you a better deal.  Nevertheless, it is always worth the effort to check what other lending companies has to offer as you may find an even better deal somewhere else.

  • Not asking for the written good-faith estimate of your loan costs from your lender. The written good-faith estimate is a list of all costs associated with your home loan and should be handed to the borrower at least a week before the actual day of closing.  This way, you can be sure that there will be no unexpected charges or sudden changes to the costs when you sign up for the deal.

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  • Hiring a home appraiser even if the value of your home is too low. Your loan officer can give you an estimate if your home will be worth a full appraisal.

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  • Thinking that the market value of your home will be based on your county tax-assessor’s assessment. Your county tax-assessor’s assessment can vary from that of the actual market value of your home so it’s not a good idea to presume that both prices will be the same.

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  • Not reviewing your home loan contract. When refinancing your home loan, make sure that you read and understand each statement in your contract.  This way, unpleasant surprises can be avoided later on.

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  • Not submitting your loan documents on time. To get a fast approval and avoid unnecessary delays, prepare all the required loan documents and submit them on time.

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  • Not making sure that your loan has rate lock. Locking your loan’s interest rate is a very crucial step as it protects you from unexpected increases while you are in the middle of your loan repayment.

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  • Relying on verbal agreements. Never trust any verbal agreement you may have had with your home loan lender.  Make sure that everything that you have agreed upon are written in a contract.  If your lender agrees to give you a lower interest rate when you refinance your home, make sure that you are handed a new contract where the new terms and conditions and stipulated.

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  • Signing up for a lender just because of cheap rates. Always remember that aside from the interest rate, there are other fees involved with a home loan. To be sure that you will get reasonable terms, check the APR or the Annual Percentage Rate as this will include other costs such as loan fees, discount, origination points, etc.

About the Author

Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. NHBS also has a list of recommended bad credit home loans
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About Melanie Mathis

Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of NHBS, Inc such as their continuous effort in giving out Free Credit Repair and Building Ebook. Connect with Melanie Mathis on Google+

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