Refinancing is when you get a new mortgage to replace your current one, this is something people do to potentially lower their interest rates, change how long the mortgage is for and get some extra cash out of their mortgage. If you are not clued up on refinancing your home it can be quite a daunting prospect so making sure you have researched it and got prepared for it is important.
If you are thinking of refinancing your home and you are unsure how to go about it or what you do to prepare then these few tips should give you an idea of what you can do to get yourself prepared and make sure you know what you are doing.
Make Sure Your Credit Score Is Great
When refinancing your credit score will have a big impact on it, if your credit score is not great then your refinancing options will be poorer and limited which then makes it not worth doing as you may not get a better rate than what you have already. You can check your credit score easily online or with apps available, check for any discrepancies and have them amended as soon as possible so you have no surprises when sorting out your refinancing.
Make Sure You Have Cash to Cover Fees
When refinancing your home there will be fees that occur such as closing costs and other expenses. You can check with your current lender on what the fees could be that relate to closing off and refinancing your mortgage this then gives you a figure so you know what you need to make it a viable option. You also may need to get an appraisal so double check with your mortgage provider if one is needed and if they need anyone specific to do it so you are not wasting your money.
Make Sure You Research Different Rates
Make sure you are looking into different loan providers and getting comparisons, this will help you find the best rate available to you. Sites like mortgagequote.com offer quotes for their loans before pre approval so you can get an idea of rates and costs before you actually commit, this is a great way to research the rates. Another way is to use comparison sites where it can take your information and give you multiple quotes with side by side comparisons of providers so you can get a detailed look at which would best suit you.
To summarise make sure you do not sit on this and not act quickly as you do not want any nasty surprises. Make sure you check your credit score to see that it is good and there are no issues, make sure you check what fees you need to pay so you save up and check your cashflow to make sure it is affordable, and make sure that you do your research when it comes to your mortgage rates so you know exactly what you can get and whether it is actually worth doing it.