Dos and Don’ts for a Home Mortgage Refinance, Part 2

don'ts home mortgage refinance

In part one of this two-part blog series, we went over some of the top areas to prioritize when considering a mortgage refinance. While there are many reasons for refinancing your home loan, from improved rates or repayment conditions to capitalizing on equity and improving your finances, ensuring you take the right steps to reach this point is vital regardless.

At Wallkill Valley Federal Savings and Loan, we’re happy to offer a wide range of mortgage loan services, including refinances for those considering going this route. We’ll help you determine whether a refinance is the right move based on your financial needs and goals, then point you toward the best mortgage programs to apply for if you determine this is the right path to take. In today’s part two of our series, we’ll switch gears and dig into a few major areas to steer clear of when it comes to a mortgage refinance.

Focusing Only on Mortgage Rate

To be clear, we are not trying to tell you that the interest rate on your refinanced loan is not important – it absolutely is. However, there are some who focus only on this rate while considering a refinance, and this is a mistake.

This is because there are several other major cost areas that come into play with a refinance. These include loan origination fees, credit fees, various closing costs and potentially several other areas, and together these can add up quickly. There are some situations where you may see what appears to be a great interest rate, but one that’s actually cancelled out by unfavorable terms elsewhere.

Send Too Many Applications

While we discussed evaluating your options for different loans in part one, this theme should only extend to research – not actual applications. Every official mortgage application requires a credit report request from the lender, which will hurt your credit score and limit your borrowing power. For this reason, you should only send one mortgage application for the program you plan to proceed with, then consider sending others if you’re denied for some reason.

Fail to Read the Fine Print

Finally, like with any other mortgage loan, be sure to pay attention to the details. While you might be drawn in by some kind of advertising or promotion for a given loan, be sure to actually confirm all these qualities – unfortunately, there are some unscrupulous lenders out there who will attempt to rope you in with a great offer before pulling the wool over your eyes. Ensure your rates are as expected and in the format you’ve chosen (usually fixed, not adjustable).

For more on pitfalls to steer clear of when considering a mortgage refinance, or to learn about any of our home loans, car loans, savings accounts or other customer services, speak to the staff at Wallkill Valley Federal Savings and Loan today.