4 Common Refinance Mistakes

Thinking about refinancing your mortgage? If so, you may want to consider these 4 common mortgage refinancing mistakes to avoid.

Failing to Do your Basic Homework

Before you call mortgage lenders, do your own basic research, says Jill Buchanan, senior vice president at MIDFLORIDA Credit Union in Lakeland, Florida.

For starters, know your credit score, which is key to determining the rate you will receive. You can check your credit score for free at WisePiggy.com.

Also, get a general idea of your home’s worth by checking home-valuation sites such as Zillow.com or by talking to a Realtor.

Armed with that information, visit HSH.com to view advertised mortgage rates from various lenders. Then, use a refinance calculator to estimate your new monthly mortgage payment.

“You can get an educated idea of the rate, closing costs and new payment without having anybody pull your credit,” Buchanan says. Source: http://ift.tt/1jN68JT

Opening New Credit Accounts and Running Up Debt

Lenders check your credit when you apply for a refinance, and they check it again just before settlement, says Frank Donnelly, chairman of the Mortgage Bankers Association of Metropolitan Washington, D.C.

Making major purchases on credit or applying for new credit could lead to delays in the approval process, Donnelly says.

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