Timely And Simple Mortgage Refinance Tips
Dec 10, 2009 Mortgages
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When the housing bubble burst, so did the banking industry. And banks and lending institutions are still leery about lending any more money. They don’t want to increase their risk levels again; they can’t afford to. So, anyone who wants to try to refinance their home now is going to have to work much harder to get approved. Stay on top of things with these mortgage refinance tips.
If refinancing is on your list of things to do, make certain you know the market value of your home. When the finance and housing market bubbles burst, home values dropped dramatically. For anyone who purchased their home within the past five years or so, this has had dire consequences. Homeowners are shocked to find there is no equity to borrow against. However, you can put equity back into your home by increasing its value.
Redoing a brand new kitchen is not going to help the problem. Adding new sod, painting the house, and adding crown molding, however, could bring your house back to where it should be in market value while you still realize a profitable return on investment for the cost of improvements.
If you are one of the many who is waiting for a 5 year ARM to come due, don’t do anything hasty. You may not need to do a thing.
As luck would have it, interest rates now are similar to what they were five years ago. For many homeowners, they are rushing around trying to figure out how to go about refinancing and getting a good deal, before their rates reset and surprise them. Because the interest rates are so similar, you may be better off by not doing anything - just wait to see what happens. You’ll be saving closing costs, and all sorts of additional expenses, by apply for a refinance loan when in fact you probably won’t need one.
Keep in mind that if you do decide to try to refinance, your credit history will be once again taken into consideration. If anything has happened during the past five years to hurt your FICO score, you will most likely get penalized in the final settlement offer when you are charged a much higher APR.
Try to figure out which lender you’d like to work with. Each inquiry on your report actually counts again you. It doesn’t matter if the loan is approved or not. To compound the problem, if the loan isn’t approved, and you do need to apply with another lender, future lenders will see this inquiry and assume you were turned down and treat you poorly even before seeing your paperwork.
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