Are You Making A Home Mortgage Mistake?

Preparing your home for a refinance is vital in avoiding bumps in the road when applying for a home loan. From accurately estimating your home’s worth to being readily available during the application process, here are five mistakes homeowners need to avoid to when getting approved for a home loan.
1.The Home Worth Fantasy Many homeowners would love to believe that their home is worth more than it actually is. It’s hard to accept falling home values, but one of the top reasons refinances are denied is because an appraisal has come in too low.

Too many home owners ignore the economic climate and falling home values, and believe that they should make a profit from what they bought the home at.

The most common reason for being turned down for a mortgage is a low home appraisal. Realistically estimating the value of your home is vital before considering refinancing and speaking with a mortgage lender.

2.The Project Starter If you are renovating your house during an appraisal chances are you will be turned down for a mortgage refinance.
If the bathroom is a wreck due to remodeling the appraiser will take that into account. The mortgage lender will not close your home if renovations or remodeling is not finished. It is best to get things down before the appraiser comes or after if time is running short.

3.The Indecisive Delayer Rates are at record lows, so waiting too long to lock-in a low rate is something homeowners should avoid. If you are too indecisive, mortgage rates may rise enough so that it’s no longer worth the time and expense of refinancing. However, rates are projected to stay extremely low for the time-being.

Also, rate locks have an expiration date that extends 30 days from the time of the lock-in. Therefore, it is wise to close the mortgage in a reasonable amount of time so as to keep the low rate agreed upon originally.

4.The Long Haul If you have had your current mortgage for four to six years, it is wise not to start back at square-one with a 30-year fixed rate. Going back to a 30-year term will cost you thousands of dollars of interest that you otherwise could have saved.

There are plenty of viable mortgage options that are available that may better fit your current financial situation and help you reach your financial goals. Reducing the term of the mortgage by just five years can result in big saving.

5.The Disappearing Act Make sure to be readily available during the entire mortgage process. An open line of communication is vital in closing your loan in a reasonable amount of time, as paperwork requirements are extremely stringent since the mortgage meltdown. The lender will ask you for documents between application and closing, such as your latest pay stub.
If you plan on going on vacation, make sure to let your lender know and set-up an open channel of communication or way they can reach you. E-mail is good for this if your vacation plans take you outside of the country.