Refinancing your home mortgage can come with
some great perks. If you do it with no money out of pocket, you can skip one
to three mortgage payments. You can save money on your payment or pay off
your entire mortgage faster when you have better terms. Here are a few
things to pay attention to when you refinance your mortgage loan, to make
sure that you donít overlook anything that you might regret, or that can
cause you problems later:
1. Apply for a pre-approval to many different lenders to make sure you are
getting the lowest rate possible. When you do this, make sure that with the
initial pre-approval application, the lender is not pulling your credit
history. You will want to reserve your credit pull for the lender that you
are most likely to work with. You can decide that after you have gone
through the preliminary pre-approval process with a few lenders. Each time
your credit is pulled, it docks your credit score just a little. If you have
too many inquiries, it could keep you from refinancing your mortgage loan
with the lowest rate possible. When you pre-apply for home mortgage loans
online, most lenders or mortgage service companies will not initially pull
your credit. Check for information about this on their website. They will
usually tell you whether or not they are going to pull your credit. Also, if
on the application you do not give them your social security number, they
cannot pull your credit. If, on the application, they ask you to describe
your credit, they are probably not pulling your credit.
2. Make sure that your original mortgage does not have a pre-payment penalty
or early payoff penalty of any kind. Sometimes people will get into their
mortgage with the mortgage having a pre-payment penalty and they will not
even know about it. Pre-payment penalties usually range from 6 months to 3
years with a penalty for an early payoff. The penalty is usually about the
amount of 6 months worth of your mortgage loan interest, but this varies.
You would have to be able to have some significant payment and interest
savings on your refinance loan to justify refinancing a mortgage loan with a
3. When evaluating different lender offers, in the mortgage loan
pre-approval process, pay closest attention to the interest rates they are
offering & the closing costs. These are the two biggest factors that will
help you figure out which lender is right for you. If one of these two
factors is too high, it could offset the benefit of refinancing for you.
4. Get your interest rate and closing costs in writing as soon as you decide
on a lender to work with. Get your lender to give you a commitment in
advance of all of the costs that will be involved with your loan. Find out
if the refinance loan you are getting has a pre-payment penalty as well.
Sometimes lenders will leave out important information like this, if they
think it might scare you away from refinancing with them.
About the Author: To see a list of recommended mortgage refinance
loan companies online, visit this page:
www.abcloanguide.com/refinance.shtml. Carrie Reeder is the owner of ABC
Loan Guide, an informational website with articles and more about various
types of loans.