Top Ten Mistakes to Avoid when Refinancing - Cont.

6. Signing documents without reading them. Whenever possible, review in advance the documents you'll be signing. (Even though some specifics of your transaction may not be known early in the transaction, the documents you'll sign are standard forms and are available for review.) It's unlikely that you'll have sufficient time to read all the documents during the closing appointment.

7. Not working with the lender in providing documents in a timely manner. This is one of the most important factors in getting the best loan program available. When your mortgage company asks you for additional documents, provide them immediately, because these documents are needed for the program you selected. There are ways around not showing documents, but it will increase your costs and rate. Whenever possible, get everything your mortgage company asks for. Delays in providing documents can result in costly delays.

8. Paying for an appraisal when you think your home value is uncertain or low. You should always ask your mortgage company to prepare a desk review before an appraisal is completed. A desk review will give you a range of what the estimated home property value is. You do not want to pay money for a full appraisal when it is doubtful that you will get the value needed to qualify for a loan.

9. Not asking about points and origination fees. Points and/or origination fees are used to buy down the interest rate. You must look at both the points and rate, not just the rate. Origination fees are something you must watch out for. An origination fee is basically the same fee as points, some lenders separate the two costs in order to make the fees seem smaller, but overall the two is costs that are incurred for the program.

10. Not considering the overall situation for yourself. When refinancing there are many routes and programs to choose from. You want to pick a program that fits your situation and your needs. Each borrower will have a different situation and a different solution.

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