Are you considering refinancing your home loan? You should not do it until you read the refinancing rules for home loans. This is the only way that you can make sure that you are making the right decision. Way too many people regret refinancing their mortgage because they didn’t know the basic rules. Don’t make the same mistake as them.
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Know your credit score
Before you can apply for a refinance loan, you need to make sure that you know your credit score. Is your credit score higher or lower than when you applied for your home loan?
If your credit score is too low, you will not qualify for a refinance loan, or you are going to pay much higher interest than what you have paid on the mortgage. Increasing your monthly premium, instead of paying less on your mortgage premiums. Most people are refinancing for lower premiums.
You need to be able to pay the refinancing fees
Something that not many people realize is that there are some refinancing fees payable when you are applying for a refinance mortgage. And, just like applying for a mortgage loan, these fees can be high and not everyone can afford these fees.
You need to make sure about what you are going to pay in fees upfront before you can get your refinancing home loan. One of the most important rules to remember. Don’t waste your time in applying for a refinance loan if you don’t have the upfront cash for the fees.
You should be able to live in your home for a long time
The moment that you are getting a refinanced mortgage, your mortgage loan payments start all over again. Meaning that you can’t sell your home in the near future. So, if you are thinking about selling your home or relocating to another city or home, then you should not apply for a refinance loan.
Not only will you not qualify for a mortgage loan after a refinance loan, but you might have access payable between what your home is worth, and the amount you are still owning on your mortgage.
These are the golden rules of refinancing your home loan. Rules that you should consider carefully before you are just thinking about the extra cash that you are going to have. Don’t make the same mistake as other people and apply for a mortgage loan before you have considered everything and remembered these three golden rules.
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