Home Loan Refinancing Tips

When going through a home loan refinance there are many things you need to know such as; new interest rate, old interest rate, current payment, new payment, points, terms of the new loan, new lender, and much more. I understand that knowing all these things about a home loan refinance could be a little too much to learn so I have included only the top 5 things you need to know about a home loan refinance.

Negotiate your new loan

Something that many people never do is negotiate their new loan. Just because you are getting a new loan doesn't mean you need to throw all the negotiation out the window. Part of the process with a lender is to negotiate the terms, closing costs, monthly payment, and everything in between. If you leave up the entire process to the lender and you never step in then they will make the loan entirely about them.

Imagine what would happen if you left picking the house up to the realtor. What do you think would happen? Here is what would happen, they would first see if they had any homes that were somewhat suitable for you and your family and if they did they would sell you that one because then they would get the entire commission for being the double agent. Just do yourself and your family a favor and negotiate the loan.

Choose an auto payment

When I bought my first home I knew there had to be some way that I could save money, and there was. I had a loan that I was paying $1100 per month on and if I signed up for the auto payment then I would save $50 each month. That is a great deal if you ask me.

I thought the lender was just messing with me when he told me about this payment option that would save me money, but turns out he was serious. The reason lenders set this up is because they want their money on time every month and the best way to do that is to automatically take money out of you back account on the due date every month.

Think about it, if you are going to pay your mortgage anyway then why not save a decent amount by signing up for the auto payment every month.

Pay for points

I am not going to spend a bunch of time on paying for points because all you need to do is ask your lender if you can pay for a few points and what it will cost you.

What is paying for points? Paying for points is where you pay a small amount for each percentage point that the lender knocks off your interest rate. This is a great way to save money during the life of the loan and an excellent way to lower your payments.

If you thought those three tips were good, just wait till you read the second part to this two part article. The second part goes more in depth about how you can save money on your newly refinanced loan.

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