1. It's easy to find a lender online or in newspaper, that appear offering a good rate and borrower go for that without checking what other are offering. This is a very common mistake found by borrowers. Checking out the competition will help to save more.
2. We all know that interest rate is the primary factor, but there are also some other charges that we should check before applying for a loan. Borrowers usually check the interest rate and if low they go it without checking other charges like loan origination fees, points, credit reports etc.
3. Some borrowers also try time interest rates. That is watching daily changes and goes for the lowest. But in that case interest rates might go up again. It's just like stock market that goes up and down with time.
4. Some of refinance our mortgage to take some cash out of their home, perhaps for investments, home repairs or a major purchase. That is basically borrowing against the equity of their home, which is fine. Problem arises when you take too much equity which can boost your mortgage and may fall in financial crisis.
5. Resetting a longer loan period is not a good idea. Refinancing is like taking a new loan that has 20 or 30 yrs to repay. Generally refinance is to save some money, but if you set a long time for loan period, the total amount you pay is same that as for first mortgage loan.There will be no saving.
2. We all know that interest rate is the primary factor, but there are also some other charges that we should check before applying for a loan. Borrowers usually check the interest rate and if low they go it without checking other charges like loan origination fees, points, credit reports etc.
3. Some borrowers also try time interest rates. That is watching daily changes and goes for the lowest. But in that case interest rates might go up again. It's just like stock market that goes up and down with time.
4. Some of refinance our mortgage to take some cash out of their home, perhaps for investments, home repairs or a major purchase. That is basically borrowing against the equity of their home, which is fine. Problem arises when you take too much equity which can boost your mortgage and may fall in financial crisis.5. Resetting a longer loan period is not a good idea. Refinancing is like taking a new loan that has 20 or 30 yrs to repay. Generally refinance is to save some money, but if you set a long time for loan period, the total amount you pay is same that as for first mortgage loan.There will be no saving.
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