5 Costly Mortgage Refinancing Mistakes to Avoid

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					                                                Presented by Daniel Toriola


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                                        5 Costly Mortgage Refinancing Mistakes to Avoid
                                                             By John F Mackay



   Mortgage refinancing has several great benefits if used properly. But if you made just a lapse of
judgement, you might be in for a costly mistake and may place your entire house at risk. Here are 5
costly mortgage refinancing mistakes you must avoid.

Mistake #1: Not locking in your rate

Rates are very erratic. It can change while your loan is being processed. So if you did not lock your
interest rate in, you might be given a different rate from what you've expected. Ask your lender to lock
in the rate you are satisfied with, place it into writing and confirm it when the processing of your loan is
done. Take note: lenders will not lock in your rate without your request.

Mistake #2: Not shopping around

There are hundreds of mortgage companies out there. Each may provide the same service but they
are unique from one another. This is why you have to shop around to get the best rates. It may sound
like comparing apples to apples but the truth is, even apples are different from one another. Spend
some time comparing different companies. Do not hesitate to ask for the best rates. And if you feel you
are not getting what you deserve, then move on and go to another company.

Mistake #3: Refinancing too often

While refinancing is a good way to take advantage of lower rate and thus save money on monthly fees,
it is not good to take it every time the rate falls down a notch. Remember that terminating your existing
loan and buying a new one involve fees. Closing costs will pile up which really defeat the purpose of
refinancing.

Mistake #4: Not computing your break-even point

Again, there is a price to pay to terminate your existing loan and getting a new one, but far too many
occasions where homeowners fail to recognize this.

Computing your break even point is simple. For example, your monthly savings for refinancing your

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mortgage is $200 and your closing cost is $2000. Divide the closing cost by monthly savings and you
will get the break even point ($2000/$200). In this example, it will take you 10 months to recoup the
cost of refinancing. In other words, you have to wait 10 month before realizing the savings. This is also
connected to #3.

Before 're-refinancing' your mortgage, you should know first if you have recoup the cost of your
previous loan. Determining your break-even point will also determine how long you will have to stay in
your home before starting to get savings.

Mistake #5: Refinancing just for the heck of it

Many homeowners believe that when the rate is low, it is time to refinance. This is wrong! There are
other conditions to determine if it is the right time to refinance your home and not just by looking that
the prevailing rate. Never refinance if you don't plan to stay at your home after a year or two or before
you reach the break-even point.

Never refinance if you have been paying for your current loan for several years or if you have only a
few years left to pay for your home. Never refinance if you have a bad credit score or if the current
market value of your home is low. And never refinance if you have already used up all the equity of
your home.


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people with bad credit to Refinace thier Home Mortgage




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                                Consider Refinancing You Indianapolis Real Estate
                                                     By Joseph Feross



If you have a home in the Indianapolis real estate market that you’ve had for over 15 years with a
mortgage, you may want to consider refinancing it. There is a blockage for most mortgage refinancing.
 This is due to lower property values and the fact that lots of homeowner cannot secure a mortgage for
the remaining balance. Due to the fact that the home may not be worth what it is owed on it, that plays
a part in not being able to get another mortgage. With an older mortgage, you probably have paid
enough already in the equity of your home to get a refinanced mortgage loan.

 Do you qualify for refinancing? You can check your numbers to see how you would come out. Get in
touch with your lender that works in Indianapolis real estate markets. You may want to call more than
one. Let them know what you want and see what kind of numbers they give you. Since the lenders are
not getting much business, they will be happy to take what they can get and be willing to work with you
to get your business. This would help them more if you have good credit. In addition to that, they will
be competing with others in order to get you the best interest rate possible.

 When you start contacting lenders regarding your Indianapolis real estate property about refinancing,
they will ask you some questions. If you have this information available, if would help you greatly when
you call them. Some of the things they will want to know is the current balance on your mortgage, how
long have you lived there, the current interest rate, is it an adjustable or fixed rate mortgage and how
long will you stay there until you decide to sell. Having the answers to their questions will save you a
lot of time later on.

 If you want to refinance and save money, don’t refinance for another 30 years. That would be a
mistake. This defeats the purpose of wanting to refinance in the first place. When you do refinance,
you will have a lower monthly payment. However, you will have more of these than you did the first
time. It will cost you more than it would have if you had not refinanced. For however many years you
have to pay on your mortgage, refinance it for that amount. Make sure that the mortgage is for a fixed
rate of interest. Get information prior to signing on the dotted line. This will prevent you from making
costly mistakes during the process. The Indianapolis real estate market is no different when it comes
to refinance.

 As the economic patterns change, having a long standing mortgage may be a good resource to have if
you want to reduce your monthly payments over a short term period. However, over the long run, it
may cost you more. If you are concerned about your finances and wanting to make future payments
on your mortgage, then looking into refinancing may be your best choice. This will help you with your
Indianapolis real estate investment in the long run. What you know can help you and what you don’t
know can hurt you. So it’s important to have as much information as possible when you’re ready to
refinance your property.

 When the Indianapolis real estate market was thriving, there was more potential to have a quick home
sale that provided security. Along with refinancing there are fees. If you new monthly payment is $100
less than before and you paid $2,000 in fees, then you have to stay there for at least another 20
months before you will see any kind of savings.

Whether you are looking to have e a short or long term solution for this, you won’t have to pay


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anything just to discuss refinancing options with some lenders. You are not obligated to take an offer
for refinancing you home in the Indianapolis real estate market. When you have knowledge, you can
use it to your benefit to keep you from making costly mistakes.

Joseph FeRoss is an expert on Indianapolis IN real estate. Additional credit is given to the Indianapolis
relocation team at Indy Metro Homes. For more information visit http://www.indymetrohomes.com




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