5 Mistakes you can avoid while you do Mortgage Refinance

Mortgage refinance is a process which allows you to refinance your mortgage in a way which could maybe save you a lot of money. It provides a way for you to look at your current financial position and then plan and get a mortgage which is relevant.   There are a few mistakes to avoid when you are planning to do a mortgage refinance and they are:

1. Ignoring your credit could be harmful.
   Having a good credit score is as important when you do a mortgage refinance as it was when you first bought the mortgage. Don’t let go and not pay your bills. Maintaining a good credit score is crucial to receiving the best rates and terms on your mortgage refinance deal.
2. Don’t open new credit cards before the process of mortgage refinance.
   You may be getting attractive offers in the mail about how there are a few hundred dollars off on your first purchase and that they are offering you so much in return. You are likely to fall prey to these schemes and buy a few credit cards to avail the benefits. But credit card purchases can affect your credit score by quite a few points and render you under qualified for a mortgage you would have originally qualified for.
3. Don’t accept the first offer you get.
   Mortgage refinance gives you the opportunity to really reduce the burden of mortgage on you. Look at rates and term plans from various lenders and make sure to compare the prices on the same day. This can ensure that you get the best rates and term plans and you can really afford to pay the mortgage on time and easily.
4. Don’t forget the interest rates!
   A lot of people make the mistake of factoring in the monthly payment and not the interest rates while doing mortgage refinance. They increase the term plan so that they can have lower monthly expense. But in such cases, the interest rates are so high that you end up paying a lot more than you would if you’d taken a moderate or short term plan.
5. There could be more costs than you are aware of.
   The first thing to consider before refinance is if there is a penalty involved in early payment of the loan. Consider all the costs and talk to a mortgage broker to avoid being caught off guard.