Mortgage refinancing rates are still low compared to historic standards and many homeowners are choosing to refinance their mortgage loans, saving thousands of dollars in interest over the life of their loans.
If you’re thinking of taking advantage of the current low-interest rates for refinancing, here are a few mistakes to watch out for:
Waiting too long
Don’t fall into the trap of continuing to shop for the best rate indefinitely, thinking that you’re bound to find something lower. Unfortunately, that’s a mistake many people make. Focusing too much on the small details of your loan or waiting too long for the rate to go just a tad bit lower means you could miss out on an incredible opportunity to refinance at the lowest rates we’ve seen in years.
Refinancing too much equity out of your home
One reason many homeowners refinance is so that they can tap into their home equity to consolidate debt, remodel, or to finance a large purchase. These are all excellent reasons, but we recommend making sure that you don’t attempt to refinance too much equity out of your home. Even though interest rates are lower, you still should make sure that your new monthly payments make sense for your budget, and the new monthly payment doesn’t stretch you financially, especially during these uncertain times.
Forgetting about Refinancing Fees
The current low rates can save many homeowners money by refinancing their mortgage; however, refi’s do have fees and closing costs associated, just like a mortgage does when buying a home. That means it is important to take into account how much longer you are planning to stay in your home, what the upfront closing costs involved, and what that means for the short and long term. Knowing these things can help you make an educated decision that is best for your personal situation.
Our team of fantastic mortgage lenders here at First Independent Bank are dedicated to helping you avoid these mistakes. They will walk alongside you to help you choose a loan that works for you and saves you money, and will make the process go as smoothly as possible, so that’s one less thing you have to worry about!
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