If you’re thinking about refinancing you may be hesitating because you are intimidated by the process. The mortgage industry collapse and unpredictable financial markets have created some new obstacles for borrowers. However, these hurdles can be easily overcome with a little research and preparation. Here are some of the things to be ready for, and some tips on how you can prepare yourself to go through the refinance process with ease:
1) Credit Score Know your credit score and work to improve it before you refinance. If your credit score has dropped since you got your mortgage it could have a drastic impact on your interest rate, or whether you’ll be able to refinance at all.
2) Appraisal Your current home value is a key component of the refinance process. Homeowners looking to refinance are often worried that their home will appraise for a lower value than they expected. It’s important that you do your homework so you aren’t solely relying on the information provided by the appraiser. More appraisers are working in areas they aren’t familiar with and that often means they are going to undervalue the property.
3) Condos Condo owners can be faced with additional challenges when they are looking to refinance. If there are multiple foreclosures or short sales in a building it becomes very difficult to get a good appraisal for a property. However, even with a poor appraisal, a condo owner still could have equity in their home and be able to qualify for a refinance.
It’s important to work with a home loan expert that you trust when you are looking to refinance. The right person can help you navigate through the refinance process and help you find the option that works for you. Now is a great time to refinance to benefit from low interest rates. Refinancing and locking in a lower rate can easily save you thousands in the long run.
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