Your Mortgage Refinancing How To LessonArticle Posted by Expert Author: Sam Stieler on 09/23/2013
Refinancing your mortgage doesn’t have to be a huge headache. Following this mortgage refinancing how to you’ll be able to negotiate with your bank stress-free and end up with a loan that truly meets your needs.
The first thing to do when considering a refinance is to think about your goals. Do you want to get into a different type of loan? Maybe you want to be able to get a lower rate without affecting your equity. Whatever your reasons, it's important to stick to your goals, even when a lender or broker is trying to convince you to do otherwise.
Doing a 'break-even analysis' is a good way to get an idea of the numbers. Try dividing the cost of your loan by the savings you will realize. That resulting number is the number of years it will take you to pay off your mortgage. If you think it will take you longer than that number to pay it off, then refinancing is a definite option for you. If you think it will take less time, then refinancing is likely not worth it.
Choosing The Right Broker
The next step in the refinancing process is to choose a professional who both knows what they are doing, and are ethical. The proper licensing will indicate that a broker is qualified to provide those services to you. In addition to licensing, any good broker will always put your best interests first.
Getting everything in writing is another thing that any good broker will do. This means being willing and able to record closing costs and fees. This kind of good-faith estimate allows you to know exactly where you will stand financially once your refinance is complete.
Getting Your Home Appraised
The home appraisal is an integral part of the refinancing process, as no refinance can happen without it. Your lender will usually have their own list of approved appraisers, which means you don't have to go through the process of researching appraisers, which can save you lots of time.
The appraiser will look at similar properties to yours that are in your area when coming up with a number. As well, they may visit your home to inspect it and determine its value. In cases where a home's value is appraised at a lower price than expected, the loan-to-value-ratio is usually increased. When this happens, a homeowner is said to be of higher risk, and so will pay more to refinance.
Other Tips For A Successful Refinance
Although you may be tempted to believe advertised rates, don’t. These are not always accurate. Another tip is to know and understand which factors influence the amount of your mortgage. It isn't always enough to just incorporate one or two factors. A good and thorough calculator can help you with this.
The most important mortgage refinancing how to- know what loan you want prior to walking into the negotiation. Use the above-mentioned calculator to get a solid number on your proposed refinance.
The requesting of multiple quotes is strongly urged by many in the refinancing business. Getting quotes from multiple companies gives you great negotiating leverage. Learning the right mortgage terms is also important, because walking into a negotiation and not knowing the lingo can mean much more time is spent than needs to be on the refinancing process.
Following even a single mortgage refinancing how to list can spell the difference between negotiating success and failure.
A home mortgage calculator is a useful tool from start to finish. When you are shopping for a home, refer to the calculator to determine what type of loan your budget will bear. Then, as you are looking into interest rates, you can determine if you wish to purchase points, or adjust the number of months you wish to pay off your loan.
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