The mortgage refinance boom is in full swing again, as homeowners take advantage of record low rates by refinancing their home loans. But it’s more complicated than it was a few years ago, say experts at Bankrate.com. Home values are lower and paperwork requirements are higher.
What you should know:
* The most common factor in a refinancing denial is an appraisal that comes in too low.
* Avoid starting a renovation of your home before the appraiser visits. The appraiser delivers an estimate of the home’s value on the day of the inspection. The house will be worth less on that day if the bathroom fixtures have been ripped out. That’s the case, even if the renovations will enhance the home’s value upon completion.
* Don’t disappear or go on vacation without telling the lender.
* Don’t start over with another 30-year term try to shorten the term.
* Once approved, be sure you understand the rate lock. Lock in the rate. Rate locks expire so know the date and build in a cushion.
Send all the paper work to the lender. I know that sounds silly but it is true. If the lender asks for a bank statement and there are 4 pages but the last page is just the reconcile page and you think it is not important, send it any way. The bank sees 3 of 4 and asks where the 4th is and it will stop the process. Give the bank everything.
Communication is important. Work with your lender and remember he is working for you. Keep your eyes on the end product, lower interest and paying off the loan sooner and spending less money.
