Refinancing Mistakes to Avoid at All Costs

By | April 27, 2011

When it comes to refinancing, there are a couple of things which could cause you some really serious financial troubles unless you are really careful. Therefore, make sure you read the following lines and use the information wisely in order to avoid such a situation.

Finding the Perfect Product

First of all, it is very important for you to shop around before deciding upon the ideal financial product that will help you refinance. If you stick with your current lender and are not aware of the other alternatives made available on the market, you will not be able to get the best out of the situation.

Furthermore, if you assume that the rates applied to your account are the only important aspect that is able to help you save some serious money, then you will also be wrong, since there are a great number of other important aspects as well, such as the annual rates and other fees which will be applied to your account and will influence your saving process.

Knowing the Expenses

As a future customer, you should most definitely lock the rate you want to be applied to your new account in writing in parallel with the development of the process. Furthermore, if you do not make some other aspects clear, such as the establishment fees and every single aspect that could influence your process of saving, you will not be able to get the best out of the situation and your savings will really be affected.

Another very common mistake is to rush and to things on your own instead of getting the help of a mortgage broker. Everybody knows that only with a mortgage broker you will be able to have your credit analysed properly and you will eventually be provided with a complete list of the most compatible product for you and your financial situation.

Avoiding the Temptations

A great number of applicants are tricked by the honeymoon rates that will be applied to their accounts and completely forget about the time they will revert back. In most of the situations, the chance in the rates will lead to a really unwanted situation and will cause you some severe financial harm if you are not constantly careful with every single aspect related to the rates.

Furthermore, if you fail to do your due diligence whenever you want to find the ideal home loan for you, for example, then you are likely to become a victim of predatory logic. This situation should also be avoided by all means and you should be really careful with it.

Switching Between Offers

Avoid by all means applying for a financial product that only pushes your loan with up to 80%. There are a great number of such offers currently distributed on the market, but they will provide you with almost no advantages since your benefits will be very little.

Furthermore, sometimes you might be provided with the opportunity of applying for an almost identical product with some other lender and you will be promised that 10 basis points will be saved with your new application. However, this situation is to be avoided since there will be almost no advantages provided to you, but instead the level of comfort will see a decrease.

Finally, you should also avoid switching your type of rate, from fixed to variable and vice versa, just because of a possible lower value in that specific moment. You will eventually regret this move when the rates chance their value again, so this solution is totally not a wise move and it is totally not recommended.

This article was written by William from Home Loan Finder.

Leave a Reply

Your email address will not be published. Required fields are marked *