Monday, January 23, 2012

5 Mistakes to Avoid When Refinancing Your Lexington Home

As we’ve entered a new year, many of you have determined to take a look your Lexington home and consider your options for the future.

While you enjoy living in this historic city; you’ve heard of the currently low mortgage rates and are wondering whether refinancing your home is the right choice for you.

In working in the Lexington Real Estate market for many years as a Lexington Real Estate agent, I have people ask me about refinancing prior to selling their home or simply because they want to lock in lower monthly payments. No matter what your interest in refinancing may be; it’s important to be aware of some of the common refinancing mistakes you’ll want to avoid.

1. Over-estimating the value of the home- Although home prices have fallen over the past few years, homeowners still put high value on their homes. As a result, they receive higher-than-expected loan offers. Your Lexington Real Estate agent will be able to show you what comparable homes in your neighborhood are currently selling for so you can get a better idea of what your Lexington home is worth.

2. Hesitating to lock in low rates- Waiting for rates to drop even lower can be the biggest mistake as there’s no promise that rates will remain low. Take the opportunity now to lock in these historically low rates before it’s too late.

3. Focusing only on interest rates- While interest rates are important, those aren’t the only factors to consider when refinancing your Lexington MA home. Lender fees, loan terms and even lender reputations will play a role in refinancing. Using online tools, such as Mortgage Professor to run all the numbers can be useful to determine if financing is even the right choice for you.

4. Overlooking shorter-term loans- Although the 30-year mortgage loan is the most popular, remember that there are 20 or 15-year mortgages that may be a better option. These shorter loans can save significant amounts of money since you’ll be reducing the amount of paid interest over time.

5. Not knowing what documents are required to refinance- It’s important to know which documents are needed before you begin to refinance. For those of you who haven’t taken out a mortgage or refinanced lately, you may be surprised to find there’s more documentation needed than in the past. Pay stubs, two months of banking and other financial statements, two years of W-2’s are just some of the documents required to refinance.

I hope that by being aware of these refinancing mistakes, you’ll be able to avoid them and better determine if you should move forward with refinancing your Lexington home.

As always, I’m here to help! If you have questions about refinancing or are hoping to sell your Lexington home this year; please let me know! I’ve helped many clients successfully get their Lexington home sold, and know that my proven strategy will create a stress free and efficient home selling experience for you as well.

I look forward to hearing from you!

1 comment:

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