If you want to refinance your home, there are some steps you can take to help ensure you will be approved for the refinancing situation you are looking for. Refinancing can allow you to lower your monthly mortgage payments, and if done correctly, can even help to reduce the overall amount you own on your home.
Thing #1: Know Your Credit Score
When it comes to refinancing, your credit score matters, you are going to want to get your credit score from all three major credit reporting agencies. Your score will not be the same with each agency, and different information may show up on each report. Getting your credit score from all three major credit reporting agencies will allow you to fix any mistakes on each report and will let you analyze your score and see what you can do to improve your score.
You want your credit score and report to be in good shape before you apply to refinance your home. A higher credit score will help you get more favorable terms on your loan.
Thing #2: Be Prepared for the Costs
When you refinance, you will have to pay fees just like you did when you initially took out your mortgage. You need to make sure that you have money saved for these fees and costs.
It is common to pay an application fee when you submit your application. This is a fee you have to pay regardless of whether or not you are approved for the loan.
Many lenders require you to get an appraisal, so you will have to pay for a property appraisal. Some lenders and state require you to get certain inspections, which is another out-of-pocket cost you may have to pay.
If you are refinancing with a different lender than the original, you will have to pay for a new title search, and you may have to pay for title insurance again.
Generally, regardless of where you live, you will have to pay attorney review and closing fees.
The exact fees will depend on where you live and state and local regulations that the banks have to follow.
Thing #3: Get Your Home Ready for the Appraisal
Finally, before you apply to refinance your home, you will want to get your home ready for the appraisal process.
Clean up your home's exterior to increase the curb appeal of your home. Mow your yard, clean up the vegetation, and put away toys and tools that don't need to be outside.
Do necessary cleaning inside. Dust, vacuum, wash your windows, and clean those areas that you usually use for spring cleaning. Switch out light bulbs for new ones and allow as much natural light into your home as possible. Get your pets out of the way on inspection day.
When it comes to getting the best terms for refinancing your home, research your credit score, make sure the information is accurate, and analyze what you can do to improve your score. Find out what fees you will have to pay, and make sure you have enough money saved up to pay those fees. Get the interior and exterior of your home looking their best for the home inspection.
For more information about refinances, contact a local lender.
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