Home Loan Comparison Dhaka: Top Six Common Mortgage Refinancing Mistakes
Even with mortgage rates hitting their lowest points in Dhaka, it’s still pretty much advisable that you refinance your mortgage. While refinancing is a really good option, not everyone does it in the right way, no! Many people often fall in traps and mistakes that cost them more money than they had anticipated.
Here are some of the top six common mortgage refinancing mistakes according to the experts from home loan comparison Dhaka that you should really avoid.
Not doing enough research. This is the worst of all. Before calling any mortgage financing institution do enough basic research. This will include know your lending history, understand your credit score, determine your income, get a general valuation of your home’s worth and work on the best rate that you will receive and the new payment.
Applying on low credit score. A standard loan requires about 660 for the best credit score. A higher score makes it easy for you to land a loan. Many firms could however consider helping you if you are on 640 plus. However a simple drop to 639 means you’ve become a higher risk. Many mortgage refinancing firms will avoid working with you then.
Creating more debt avenues. When you apply for a refinance you should have as minimal debts as you can. Often lenders will check your credit when you raise them for a refinance and right before settlement. Applying for new credits, making huge purchases on credit, or having a new loan could easily drop your credit score and lead to approval delays.
Using your current lender. Refinancing with your current lender is supper dupe. It’s really easy and pretty fast. But why could it be a mistake. If you do it without shopping for other rates you could pay high when very affordable options were available. Don’t assume that your lender could give you any special preferences. Compare fees and interests rates.
Ignoring some or all costs. You don’t wanna do this. The main reason you are refinancing is to lower your monthly costs. So before you opt for a refinance consider all applicable costs. Make sure you have no existing penalty, factor in refinancing closing costs, look at your total cost with or without any upfront costs too. However choose lenders that offer no closing costs.
Thinking that all is fine. If you have great credit your refinancing process could be pretty easy. That is also true for people with strong equity positions, full assent and income inventory, and relatively long standing employment. But rarely does anyone fit this perfect description. Meaning many things could go wrong. Have such a consideration in mind.
If your documentation isn’t presented on time or your income isn’t clearly stated you could have a bumpy ride during your refinancing period. The same applies to a property appraisal that comes below the expected value of your property. Take your time to have a well prepared documentation.