Mortgage Refinancing: 4 Costly Mistakes Homeowners Commonly CommitInk Well Mag January 13, 2016 0 COMMENTS
Utahans are a big fan of refinancing for various reasons. Some see it as a great opportunity to snag low rates or shorten their mortgage term while others use the option to repay other high-interest debts. But just because it’s a boon in many ways, it doesn’t mean it guarantees a favorable deal.
Much like other loans, applying for a home refinance in Utah is a major financial decision. You have to be prudent and to touch all the bases to ensure you wouldn’t find yourself on the losing end.
Unlike other homeowners, don’t commit these mistakes and regret your decision for many years:
Disregarding the Time Left on Your Mortgage
First, the remaining period on your current mortgage would most likely say if refinancing is a reasonable thing to do. It wouldn’t make sense to start all over again if you’re just less than 24 months away from completing your term.
Also, getting a new mortgage isn’t the smartest move if you have no plans of keeping your house in the long-term.
Working with the Same Lender without Shopping Around
You don’t know it’s possible or you’re just too lazy, applying for a refinance with your old lender without bothering to look for better deals elsewhere is a bad idea. In most cases, the grass is greener on the other side of the fence, and you could leverage the quotes you receive from other lenders on the negotiation table.
Focusing on Monthly Repayments Alone
The costs involved in any mortgage are more than just the principal and the interest. Replacing your current mortgage might cost you prepayment penalties. In addition, some refinancing options come with certain origination fees, while others don’t charge closing costs.
You have to be particular with everything that can affect the overall cost of your deal. It’s the only way to see if it’s really worth your while to get a new mortgage.
Forgetting to Lock In the Rate
Locking it in means having the rate quoted to you in black and white, or else it doesn’t hold true. Unless it’s in writing, the rate is just an empty promise.
Mortgage refinancing is not for everybody and only useful to those who know what they’re doing. Take your time to think things through before you sign anything.