There are many people today who are planning on refinancing their mortgage(s). Due to the fact that the interest rates of mortgages have fallen down to record lows time and time again, homeowners would be remiss if they shied away from trying to find a great deal. This explains why there is a massive increase in refinancing applications year in & year out. Nevertheless, filing a refinancing application form does not necessarily guarantee that you will capitalize off of the current economic climate & acquire a mortgage with reduced interest rates. If you desire boosting the possibility of saving a penny or two, take a look at the following tips:
1) Check and ensure that your entire home is in tip-top shape – In the recent past, lenders could issue-out cash to anyone who needed it – without any interrogations. However, things have changed. Nowadays, they do not just lend money to anybody who steps in their door. Some lenders will have to make it a point to instruct one of their inspectors to have a look at the overall condition of your home, or the status of it prior to lending you any amount of cash.
2) Get to know all the whereabouts of LTV and its impacts towards you – LTV stands for “Loan-to-Value Ratio”, and is basically a ratio which compares the amount of the home mortgage, to the appraised value of your home. The ideal LTV ratio is 70% or lower. For example, if you wanted a $60,000 mortgage for a home that’s worth $100,000, the LTV ratio would be 60% (60,000/100,000); so if the lender gave you a $60k loan for a home valued at $100k, you’d still have equity in the property worth $40k ($100,000 – $60,000). Banks & lenders like this, because if you failed to pay the loan (and the lender foreclosed on the home) the property will still have $40k worth of value; so the banks will have an easier time selling it off. If the LTV ratio is above 70%, then that means the property will have less equity when the loan is given to you; in this case, the bank may request a larger down payment from you (20% of the property’s value), as well as request that you pay Private Mortgage Insurance, to protect themselves in the event that you default on the loan.
3) Go through your credit report twice – Your credit score has always been key to getting a certain kind of mortgage. Actually, your credit score can put you on a path to getting the (low) interest rate that you’d love; or put you on a path to getting stuck with the (high) interest rate you’d hate. High interest rates can result in enormous financial problems, especially if they are stacked on top of debts from collection agencies like lvnv funding. It would be in one’s interest to be keenly aware of the activities that transpire on their credit reports; neglecting to do so would only invite financial peril. Check your reports routinely & remove any flimsy mistakes – and it will save you more money at the end of every month.
4) Shop around – Since you’re reading this article, you are a reasonably bright person, and as such, it will not be your best interest to try to purchase something without first doing a little bit of investigating, surveying, sorting and making comparisons. The same method applies when you need to refinance your mortgage. A good number of individuals correctly fill-in a refinancing application hand-out with the most available lender, but they can also be in a position to locate better deals elsewhere – particularly now that the rates of mortgages have been reduced considerably. As people are patting themselves on the back for talking the lender down to lower mortgage rate, they may have overlooked a number of lenders who may have had rates far lower than that! Some lenders require little documentation & no credit background checks, to get a loan – which can be a boon to clients if midland credit management is wreaking havoc on their credit reports.
5) Never allow your lender sweet talk you – There are several lenders who are so desperate that it may not be their desire to lose your investment, at any cost. Some of them may be reluctant to see the huge amounts of interest rates you are paying on your current mortgage. At the end, they will inform you that you already have the best mortgage rate, thus, try to discourage you from refinancing. It does not matter what they tell you, just remember: the numbers never lie. The rates at which mortgages go for, are quite lower nowadays, as compared to the time when you initially appled for the loan.
6) Always remember to check fees – Mortgages come with closing expenses, meaning that even refinancing a home loan will also cost you – whether you like it or not. For some lenders to attract more clients, they normally advertise no charges on their mortgages, implying that they will pay for the expenses on your behalf. However, it should sink into your mind that that does not, at any level, save you one red cent. At some point, you will notice that you paid charges that they were supposedly “paying for you” – through heavy taxes they stacked on the money you borrowed. Regardless of how accommodating banks & lenders may appear, always be mindful that they are still a business, and as such, their goal is to make a profit off of clients.