If you are in the process of refinancing your mortgage loan there are a number of mortgage mistakes you need to avoid. These mistakes are easy to make and could cost you thousands of dollars; here is what you need to know to avoid costly mortgage mistakes when refinancing your mortgage. Compare Closing Costs An easy thing to do for many homeowners is overpay closing costs. Most people overlook closing costs when comparing loan offers and fail to realize these expenses are negotiable. Make sure you carefully examine the good faith estimate from each mortgage lender you consider and pay close attention to lender fees and closing costs. When you do this you will find that these fees vary widely from one mortgage lender to the next. Dont be afraid to haggle with mortgage lenders over closing costs and fees; the mortgage industry is fiercely competitive and the lenders need your business more than you need theirs. Lock in Your Interest Rate Make sure your lender will guarantee your interest rate and give you enough time with that guarantee to close on your mortgage. If the lender charges you a fee for the interest rate guarantee make sure you understand what the fee is and dont be afraid to haggle over paying this fee. The interest rate lock needs to give you enough time for the lender to process your new mortgage and for you to close on the loan; if you fail to close before the expiration of the lock period you can bet the mortgage lender will raise your interest rate. Make sure the guarantee covers the points you are paying and what exactly you are getting for paying points. Never Accept a Prepayment Penalty Carefully review your loan contract and do not accept a loan offer that includes a prepayment penalty. There is no reason for accepting this penalty, especially if you have good credit. To learn how to shop for the best mortgage and other common mortgage mistakes you need to avoid, register for a free mortgage guidebook using the links below. |
