Refinancing your mortgage or home can be a tightrope sometimes. Do it right, under the right circumstances, and you can have lower rates and more leeway with payments. Do it wrong, and you get the exact opposite of that, plus extra costs that come with refinancing. It can be very easy to fall into the latter end of this process, but luckily there are easily definable mistakes that, when identified, can be avoided. With that said, if you are searching for a community bank in Knoxville in search of a refinance, here are the most common mistakes made during this process, so you know what to avoid.
#1. Having a low credit score
This cannot be overstated enough: fix your credit score before seeking out a refinance. Otherwise, you?re not going to get very far. People with a low credit score will have significant trouble finding a mortgage at all, let alone another that they can refinance too. Your credit score needs to at least be between 620 and 720. If you can get it above 720, then you?re guaranteed a great deal. But until then, banks and lenders will be less than cooperative with your need for a refinance.
#2. Not doing your homework
Half the battle of refinancing is the research. Make sure you do a lot of it before going anywhere near a lender or a bank. There is the credit above score, to start with, but there?s also the worth of your home which will also play a huge factor. Finally, visit various financial sites to view the various mortgage rates from the lenders in your area. Armed with this information, calculate the estimate for your new monthly mortgage payment. This should be the first step when settling on getting a refinance.
There are other, smaller mistakes you can make along the way, but the ones listed here are the most commonly made because they?re the easiest to fall into. If you want more information on the subject, visit your local community bank in Knoxville, or visit a community bank near you.