At Mortgage 247, we understand that refinancing your home can be an exciting yet nerve-racking time. We also understand that there are many mortgage companies that you can work with. Even if you don't refinance with us, we will teach your the four biggest mistakes that people make when refinancing their home:
1. Not shopping around
There are many sources of mortgage loans. It’s a mistake to just go with your same lender without shopping around and talking to other people for referrals. Do your research!
2. Maxing out your credit
Part of your credit score is calculated by comparing the total credit you have with the credit you’re actively using. Say the credit lines on all your credit cards add up to $50,000. If you’ve maxed out your credit, that’s a red flag for your lender. However, if you’ve only used $10,000 of your credit line, you are in a better situation. Pay down debt, if you can, before you refinance.
3. Using credit to make big purchases right after you apply
Don’t buy a new car, don’t finance new appliances, and don’t take out any new loans between the time you apply for a refinance and the day you get your loan funded. Adding any new debts or monthly bills changes your financial situation, which can change the lenders mind!
4. Having unfinished remodeling projects
If your lender sends an appraiser out to value your house and you’ve ripped the siding off the front of your house, your unfinished project can derail your refinance. A lender will only give you a refinance if they think they would be able to sell your house if you don’t make the mortgage payments. A half-finished project would bring only half-hearted purchase offers at a foreclosure sale.
For more tips and advice, contact us!