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5 Money Saving Tips for Refinancing

5 Money Saving Tips for Refinancing

If you can refinance your home in an appropriate way, you may be able to save money, and also help keep your property from getting into foreclosure when the payments are in default. The strategies can be employed for refinancing ranges from looking for better interest rate to performing a short sale. Since the slowdown in home sales from the year of 2007, people are keeping looking for ways to save more money and among them, refinancing is possibly the smartest way to keep the properties before the house market revives.

1. Be careful about terms and interest rates.

Do some research and try to understand the interest rates. A lot of brokers try to lock you into a trap of low interest rate instead of paying points up front. Keep yourself out from the zero percent APR only if you think it fits well with your long term plans. Additionally, figure out if the interest rate will change when you are keeping the home longer than the original plan. Another situation is, you may get stuck into a low-interest-rate mortgage payment if the brokers convince you to conduct a variable rate loan and you do it without learning all the details. Such payments can escalate to a level that you can’t handle in just a few years, so be careful about the interest rates and terms.

2. Pay attention to hidden fees.

If a mortgage rate is too low, think about why and check out if hidden fees are applied. Keep in mind things that are too good can never be true. The lenders commonly charge for a finder’s fee, but the fees just represent the compensation of arranging refinancing and you should investigate it and find out the most reasonable and beneficial terms for you.

3. Look for legal advice.

Ask questions to a legal professional and keep the answers. Review all the questions and the documents thoroughly to make sure you totally understand what is happening. It’s no hurt for you to carefully go through all the documents and have good understanding of the terms. It is your legal right to do so and you may eventually find out the terms that either you don’t understand or you can’t agree after going though the details.

4. Get an estimate of you stay length.

Get an estimate about how long you are planning to remain in the home so that you can determine how much can be saved with the refinancing. When you do this, include all the costs and weigh over them. Don’t forget to include the closing costs when make decisions. Write down every cost on a paper and do the calculation so you will not lose money in the end. You might have to settle for the best deal and meet the timeline, but you will absolutely not want to lose money on the offer.

5. Consult the FTC.

The Federal Trade Commission offers home owners who are experiencing problem of mortgage payments with solutions and tips for home refinancing. You may also be qualified for the loan modification through a program called “Making Home Affordable Modification Program”. They welcome you to seek advice from them to keep you in patient and persistent.

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