Many homeowners make the decision at some point in time or another to refinance their home and see if they can get better terms. While they might think they have a solid understanding of the process, it can get quite confusing and overwhelming for many. There are a lot of specifics involved in the whole process. You want to make sure you are getting the best deal and not putting yourself into a worse financial situation than what you needed to. If you aren't sure where to start, here are four questions to ask the lender when going through the application and approval process.
How quickly can the loan be processed through?
For those who are facing foreclosure, refinancing the loan might be the only way to overcome the default and regain control of your mortgage. If this is the case with your loan, you want to get the mortgage refinanced as quickly as possible to prevent losing your home to foreclosure. Some loan companies will process your loan through within 24-48 hours while others can take weeks. Since each company is different, you want to ask the lender this right from the beginning.
Are there any pre-payment penalties?
While you might only be able to pay the minimum amount due on your mortgage right now, that doesn't mean your financial situation isn't going to change in another year or so. In the event that you are able to afford to pay a little extra on your mortgage, you don't want to be hit with a penalty for doing so.
What is the new percentage rate going to be?
You need to know how much of a difference this new percentage rate is going to make in your overall payments. Dropping your rates by even a percentage point or two can make a big difference in the life of the loan.
Will this extend the amount of time left on the loan?
Make sure you find out if they are going to extend your loan terms as well. If you only have five years left, you probably don't want to refinance your loan for another 20 years or so. You want to keep the payments down without having to go into debt for longer. Make sure the loan terms are something that you feel comfortable with over the long haul.
By asking the questions above, you won't end up being hit with a bunch of added costs and fees in the end. Take your time to make sure you have a solid understanding of the process before signing anything. For further assistance, contact local professionals, such as those from Best Rates Mortgage, LLC home refinance.Share
18 February 2016
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