Mortgage refinancing can be a nerve wracking situation for any homeowner. It doesn’t matter how much equity you have in your home or what your credit is like, whether or not you overpay for the loan depends on how much time you can invest doing your homework and researching mortgage offers. Here are several tips to help you find the most competitive offer while avoiding common mistakes.
Before approving your application, the mortgage company is going to need documentation regarding your income, assets, and credit history. You can save yourself a lot of headache by gathering this documentation before shopping for a lender.
- W2s or tax returns for at least two years
- Bank and investment statements going back two years (on-line statements acceptable)
- Recent statement from your current lender,
- Your homeowner’s insurance policy
- A recent appraisal and survey of your home (when you first closed on the home, you probably received a folder with all of your closing documents, which may be the place where you can find your survey).
Once you have all your ducks in a row regarding documentation, you should request copies of your credit history from each of the credit agencies and carefully review the records for errors. If you find mistakes, you will need to dispute the errors and allow enough time for the correction to be reflected in your credit score.
The interest rate you qualify for when mortgage refinancing is based largely on the state of your credit.
After verifying your credit history, you are ready to begin shopping for mortgage loans. It is best to shop from a variety of mortgage lenders comparing all aspects of the mortgage offers.
Many homeowners assume choosing the loan with the lowest interest rate ensures them the best deal; however, if you focus only on interest rates you could overlook closing costs and other fees. Use the Good Faith Estimate to conduct a line-by-line comparison of the loan offers you are considering.
One way to shop for a mortgage refi is to check out the Zillow Mortgage Market Place, which allows a homeowner to create an anonymous loan request, receive quotes from three or more lenders and encourages you to contact the lender of your choice if you want to get more information from specific lender. Quotes are near instant and allows you to compare rates from thousands of lenders.
We recommend for you to get several GFEs and use the Zillow Refi Calculator to decide if refinancing makes sense for you in the long run. Using the mortgage refiance calculator makes sense when you the fee for the loan are disclosed to you.
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