Mortgage Refinancing - Three Costly Mortgage Mistakes to Avoid

If you are refinancing your mortgage there are several costly mistakes that can cause you to overpay thousands of dollars for your new mortgage loan. Doing your homework and researching mortgage lenders will help you avoid the majority of mistakes homeowners make when mortgage refinancing. Here are several tips to help you avoid three common homeowner mistakes that will result in overpaying thousands of dollars for your new loan.

Mortgage Refinancing is an expensive process, even when done correctly. You will be required to pay fees and closing costs to secure the new mortgage refinancing loan. These costs typically run between 1-3%, not including any discount points you agree to pay in exchange for a lower interest rate or better terms. Many homeowners make the mistake of trying to time the market for a better mortgage refinancing interest rate, or assume by choosing the loan with the lowest interest rate they will save money. Here are tips to help you avoid making the same mortgage refinancing mistakes.

Mortgage Refinancing Mistakes: Trying to Time Interest Rates

Mortgage interest rates are extremely unpredictable. Any one telling you they can time interest rates to find you the best loan is not being completely honest with you. Many people try and time the market as a gimmick to sell their services; however, these people are just guessing based on what they see in the news. Instead of trying your luck at timing the market, you are better off using your time to research mortgage refinancing lenders and their loan offers.

The Internet makes doing your mortgage refinancing homework easy. You can quickly research dozens of mortgage lenders and compare mortgage refinancing offers line-by-line. When you comparison shop for a new mortgage it is important to compare all aspects of the mortgage loans you consider. Homeowners that focus only on mortgage refinancing interest rates make the next costly mortgage refinancing mistake we will discuss.

Mortgage Refinancing Mistakes: Assuming the Lowest Interest Rate is Best

Mortgage refinancing interest rates are important; however, interest rates are only one aspect of the new loan. Many homeowners think choosing the loan offer with an attractive interest rate will save them money. These homeowners often choose risky adjustable rate mortgages with unusually low introductory rates that go up significantly after a period of time, or will overlook mortgage refinancing lender fees and closing costs. Making either mistake will result in significantly overpaying for your home loan. In the case of that risky adjustable rate mortgage, you could even lose your home if you don't fully understand what you're getting into. To learn more about avoiding other costly mortgage refinancing mistakes, register for a free mortgage guidebook.

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