Tips to Qualify for a Better Mortgage Loan

If you are in the processing of mortgage refinancing there are a number of steps you can take to ensure you qualify for the best loan. Comparison shopping will help you find competitive lenders offering the best interest rates for your situation. Here are tips to help you through the mortgage refinancing process while avoiding costly homeowner mistakes.

Mortgage Refinancing with a Bank or Mortgage Lender

One of the biggest mistakes you can make when mortgage refinancing is taking out the new loan from your bank. Banks have a loophole in the Real Estate Settlement Procedures Act (RESPA) that allows them to hide information about their fees and profit margins on their mortgage loans. The same is true of broker-banks; these are simply banks pretending to be mortgage brokers. If you take out a mortgage from your bank or a broker bank you will overpay for the loan.

Never Exaggerate On Your Mortgage Refinancing Application

When shopping for mortgage refinancing quotes you should never exaggerate your income or the state of your credit. Once you decide on a loan and submit your application the lender will run your credit and verify your income. If you exaggerated these facts the lender will find out and you could lose the interest rate you qualified for or even have your application denied. Likewise, you should never sign blank or incomplete loan documents. If a lender or broker asks you to misrepresent any information on your application or sign incomplete documents, this lender does not have your best interests at heart and you should find another mortgage lender.

Build Up Your Credit Score Prior to Mortgage Refinancing

Before you start mortgage refinancing it is important to review your credit records for errors. Credit records are maintained by three separate credit agencies and are frequently prone to mistakes. If you find mistakes in your credit history it is important to dispute the errors prior to submitting any mortgage refinancing applications. Having negative information in your credit reports can significantly damage your credit score.

You can improve your credit score by paying all of your bills on time and maintaining low balances on your credit cards. A large portion of your credit score is derived from your history of on time payments; having one late payment could lower your credit score by as much as ten points. Avoid making any large purchases when mortgage refinancing as new credit accounts will lower your credit score.

You can lean more money saving tips when mortgage refinancing, including common mistakes to avoid by registering for a free mortgage refinancing guidebook.