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Make Your Home's
Equity Work for You
Do you own a home? You
may be sitting on a lot of money that could be put to better
use.
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Before you refinance
read on to avoid common mistakes:
Make sure how much your new interest rate is going to be
If you are
refinancing purely to obtain a better rate, determine whether
the new rate together with the closing costs and new principal
amount will save you enough to justify the whole process of
refinancing; however, there is not a written rule about this,
look to save between 0.75 to 1% in your rate. For example
this will save you about $100 a month if you are refinancing a
$150,000 loan.
Beware of the quality of the service you'll receive
You want your refinance
process to go along with as little hassle as possible and as
smoothly as needed. A professional mortgage consultant
should take you by the hand in the process and offer you the
guidance and assistance you need. Likewise, you want the process
to take as short period of time as possible while maintaining a
record of excellence in the service. At Florida Mortgage
Connection we offer you our highest levels of commitment to have
your loan process go as smooth as possible.
A common mistake many refinance
shoppers do is jumping to another broker that offers them a
lower APR, just to find out at closing that it was not as good
rate as they thought.
If you are
refinancing for rate, make sure you do not get trapped into the
teaser rates that are advertised everywhere, an advertising
boasting 1% APR can cost you dearly. APR stands for Annual
Percentage Rate. Some brokers use teaser rates to get your
attention. This rate is not always to your advantage, so
make sure there are no hidden costs or fees, accelerated payment
plans or balloon payments. Most lenders allow you to carry a
very low rate for a short promotional period of time.
Be sure to fully understand the reason why you are
refinancing
If you are
refinancing because somebody offered you a lower rate, make sure
that the gains from your rate reduction are more than the cost
of the refinancing process itself. There are some
legitimate reasons to refinance like consolidating debt, paying
for your children's college education, or making home
improvements. Always consult an accountant or tax attorney
before you make a decision.
Make sure you know your closing costs up front
The law requires
that the closing costs be disclosed within 3 days of the loan
application, however, there are different approaches to
calculate
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