Mortgage rates are still at historic lows, but they might not stay that way for long. which makes now a great time to refinance. Refinancing is a smart option if you wish to lower your monthly payment, build equity faster or simply pay off your mortgage sooner. Although there are several benefits to refinancing, it is important to remember avoiding common refinance mistakes so you can reap the savings you want.
Fortunately, our trusted team of mortgage advisors at vLoan can help to answer any of your questions about refinancing. Give us a call at 1-844-77-vLoan if you want more answers about refinancing. With this in mind, here are the top five mistakes to avoid when refinancing:
Not Locking in a Low Rate
Mortgage refinance rates change daily, so be sure to lock your rate with vLoan early. Although you may want to see if rates will drop further, you may miss out on the opportunity to lock in with the current low rates.
Over-estimating the value of your home
Even though home values continue to drop, you may tend to over-value your home. It is best to track home prices in your area so you’ll have a better idea of how much your home is worth.
Over-looking shorter term loans
Surprisingly to many people, you have more options than just a conventional 30-year conventional fixed rate mortgage. Switching to a 20-year or 15-year conventional fixed rate mortgage can shorten the life of the loan and significantly reduce the amount of interest paid.
Focusing only on interest rates
Don’t forget to factor in lender fees, loan terms and lender reputations into your decision to refinance. You can also check out our Zillow page to see how we got a 4.9-star rating from past clients. Compare different refinance offers and look at all fees while also running the numbers on different scenarios by changing the loan amount. Get a free rate quote and we’ll share all those nitty-gritty details with you upfront. Factor in the refinance’s closing costs and how much time you have left on your current mortgage. These steps will help you to determine if refinancing makes sense for your current situation.
Not knowing what documents are required to refinance
If you haven’t applied for a mortgage or refinanced recently, you might not be aware you need a lot more documentation to receive a loan. Be prepared to provide two years’ W-2s, pay stubs from the recent month, your credit score and if you’re self-employed, two years of tax returns showing self-sustaining income. Depending on your financial situation, the documents you must provide will vary. Ask your mortgage advisor first so you can get your house in order.
We hope that this list has been helpful to you if you are considering refinancing in the near future. Our dedicated team of mortgage advisors at vLoan is ready to guide you through this process as well as answer any questions you may have along the way. Please contact us with any additional questions or get a free rate quote!