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mortgage refinancing Tips

Written by: Dan Lewis

As interest rates continue to creep upwards, many home owners
are looking at refinancing options. Here are some mortgage
refinancing tips.

mortgage refinancing Tips

Rates have been increasing steadily for the last six months.
These increases are expected to continue into 2006. Such
increases are putting pressure on homeowners who took out
adjustable rate mortgages or have been borrowing money against a
home equity line of credit. For people in this position,
refinancing into a fixed rate mortgage is starting to look very
attractive if for no other reason than to avoid future bumps in
the rates.

If you are considering refinancing your mortgage, there are a
couple of things to keep in mind. Unlike the rushed process of
trying to get funding for a purchase, you have more time to
evaluate and compare mortgage options. Shop around and find out
what different lenders are offering that fit your potential
needs.

1. What is your goal? - Is your goal to lower the monthly
payment or to simply try to pay less interest? While these
questions may seem like the same thing, a lower interest rate
can be translated into the same month payment amount, but with
more of the payment being applied to the principal of the loan.
This, of course, helps you pay off the note faster. The bigger
point is to simply figure out your goal and find a loan that
meets it.

2. Shop Lenders - One of the best ways to do this is seek a
pre-approval from a variety of lenders. You might be concerned
this will hurt your FICO score, but refinance credit requests
often don’t ding your FICO. If you’re not sure about this,
simply don’t supply the lender with you social security number.
They will give you a less definite loan offer, but you’ll still
have the advantage of reading the fine terms to make sure it
accomplishes your goals.

3. In Writing - Once you choose a lender, you need to nail down
three important things in writing. The first is the interest
rate. The second is the closing costs, if any. The third is any
pre-payment penalty associated with the loan. If the lender
drags there feet on any of these, consider walking away from the
loan.

refinancing a mortgage is a less stressful process when compared
to getting a purchase loan. You are in the catbirds seat, so
don’t let lenders push you around.

About the author:

Dan Lewis is with http://www.gwhomeloans.com - a San Diego
mortgage brokers providing San Diego home loans. Visit
http://www.gwhomeloans.com/services.html to learn more about
options on San Diego mortgages from a San Diego mortgage broker
company.