People who are refinancing their homes should clearly identify their objectives, update old paperwork and consider all the costs of refinancing, notes Forbes. They should also shop around for mortgages, gather paperwork for prequalification, choose loans carefully and get their homes appraised.
Homeowners who are refinancing should have specific goals such as reducing monthly payments, changing interest rate structures, or producing other benefits such as removing the equity from their homes, advises Forbes. They should also update the information used in the original financing of their homes, obtain new copies of their credit reports and correct any errors in their credit reports before submitting them to lenders. Homeowners should shop around for mortgage refinancing loans by submitting applications to multiple lenders and examining closely any associated costs or fees.
People wishing to refinance their mortgage loans should get prequalified, and can expedite the prequalification process by having all of their paperwork ready for potential lenders, including tax returns, pay stubs and bank statements, notes Forbes. They should then pick a loan that meets their original objectives without producing unfavorable outcomes, such as years of additional payments, that would outweigh the benefits of refinancing. Homeowners should also get their home appraised prior to refinancing and if necessary, take steps to fight low appraisals.