Things to Avoid When You’re Refinancing Your Home

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Things to Avoid When You’re Refinancing Your Home

Refinancing is a great tool to improve the terms of your mortgage or decrease interest rates. Some homeowners even use refinancing as a way to consolidate debt and gain financial freedom faster. As with any tool, there is a right way and a wrong way to use it. Here are 3 of the most common mistakes we see when homeowners decide to refinance.

Bypassing Research

If you are considering refinancing your home’s mortgage, the most important first step is research. You need to know how much your home is worth and what other offers are out there. It doesn’t make sense to go through all the hassle and expenses of refinancing if you’re not going to get the best possible deal.

Large and Recent Credit

Just because you already have your home, doesn’t mean that your lender won’t be looking at your financial situation in much the same ways they did when you first bought the place. Taking out loans or opening new credit accounts is a huge red flag. This could significantly reduce your chances of getting a great rate. In addition, you’ll want to make sure that your credit score is in a healthy place before attempting to refinance.

Not Considering Hidden Costs

Refinancing doesn’t happen for free. In many cases there are closing costs, application fees, appraisal, document preparation, or title insurance. If these expenses are too high, it might not make sense to refinance. Also be wary of lenders who add the closing costs onto the monthly fees. It’s important to know exactly what you’re paying for, and when!

Refinancing can go a long way in saving money on monthly payments, reducing the overall cost of your mortgage, and improving terms. In an ideal situation this will allow you more financial freedom. If your mortgage term is almost up and you’re considering a refinance, contact your Calgary mortgage specialists today to review your options. We look forward to hearing from you!

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Source was absolutely great to work with - went above and beyond to help us get everything done when buying our new home. Highly recommended!! Chad and Jenelle Richards Jan 09 2013

Chad and Jenelle Richards
Added January 23rd 2013

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