There are many choices available for a new loan when you are considering refinancing your current mortgage. Maybe you had credit problems before or the market rates were high at the time you got your original mortgage which forced you into a loan with high in interest that you are interested in refinancing. Or you may have had an ARM mortgage that has a low interest rate that is about to increase or a balloon mortgage that is almost due and you need to refinance now.
For whatever reason you are interested in refinancing your home, there are some important facts you should know including:
- Refinancing an existing mortgage loan is basically taking out a new first mortgage loan in order to pay off your existing loan and have better terms and a lower interest rate.
- When you refinance a loan don’t just go to your same lender. They may be the best choice, but they may not. Put together all of the information you need for a loan like your income information, employment information, credit, and more, and then take this package to various lenders to see who will offer you the best mortgage loan and terms with the lowest fees, closing costs, and interest rate. You may find a significant difference in costs that can save you a lot of money.
- There are many different types of refinancing loan options depending on your situation. Become familiar with the different types of loans so that you know which one is right for you. For instance, if you are planning to stay in the home you have for your life then you will want a fixed rate mortgage loan. However, if you know that you will have to move for work in two or three years you should refinance into an adjustable rate mortgage or an interest only loan in order to get a lower introductory interest rate and save money. Become an expert on types of mortgage loans and pick the right one for you.
- If you find a lender with great rates be careful of the bait and switch. They may get you lured in with the promise of great rates and then all of a sudden have to raise the rate because of less than perfect credit or some other excuse. Don’t fall for it. Have your loan package ready with your credit score in there so they know right away and can not surprise you with any tactics to get more money from you.
Just like buying any other item at a store, when you purchase or refinance a home you are buying a mortgage. Depending on where you go the prices will be different, so it pays to shop around and find the best refinancing options for your family. Just think of what you can do with all the money you save!
For more helpful information on VA Loans visit the VA Loan experts at the VA Home Loan San Diego Center!