Mortgage rates are at record lows and should stay that way as long as economic reports continue to be disappointing, according to Bankrate.com, which tracks mortgage rates weekly. However, if you've been thinking about refinancing, you should act quickly. If mortgage rates rebound, they could do so quickly, according to Bankrate.com.
But don't make mistakes in your rush to refinance. Here are five of the biggest ones, according to a survey of LendingTree network lenders. LendingTree is an online marketplace of mortgage lenders.
1. Over-estimating the value of the home. Despite the fact that home values continue to drop, homeowners still tend to over-value their home. As a result, they receive higher-than-expected loan offers. Use our tool to track home prices in your area so you'll have a better idea how much your house is worth.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
2. Hesitating to lock in low rates. Lenders are seeing borrowers waiting for rates to drop further, missing out on the opportunity to lock-in with the current low rates.
3. Focusing only on interest rates. Borrowers often forget to factor in lender fees, loan terms and lender reputations into their decision to refinance. Compare several offers and run all the numbers (including fees) using calculators at Mortgage Professor to see which offer is the best and to determine whether refinancing even makes sense for you.
4. Overlooking shorter-term loans. Remember, the 30-year mortgage isn't your only option. A 20-year or 15-year mortgage can shorten the life of the loan and significantly reduce the amount of interest paid.
5. Not knowing what documents are required to refinance. If you haven't taken out a mortgage or refinanced recently, you might not be aware that you need a lot more documentation these days to get a loan. Be ready to provide pay stubs from a recent month, two months of bank and other financial statements, two years of W-2s and, if you're self-employed, two years of tax returns showing self-sustaining income.
-
Five Ways to Save on Vacation Rental PropertiesTravel Use these strategies to pay less for an apartment, condo or house when you travel.
-
How to Avoid Annoying Hotel Fees: Per Person, Parking and MoreTravel Here's how to avoid extra charges and make sure you don't get stuck paying for amenities that you don't use.
-
How to Appeal an Unexpected Medical Billhealth insurance You may receive a bill because your insurance company denied a claim—but that doesn’t mean you have to pay it.
-
Amazon Prime Fees Are Rising. Here’s How to Cancel Your Amazon Prime MembershipAmazon Prime Amazon Prime will soon cost $139 a year, $180 for those who pay monthly. If you’re a subscriber, maybe it’s time to rethink your relationship. Here’s a step-by-step guide to canceling Prime.
-
How to Haggle for Almost AnythingSmart Buying Learning how to haggle is an invaluable skill. These strategies will help you negotiate a better price for just about any product or service.
-
Disability Insurance Can Provide COVID CoverageCoronavirus and Your Money If you are concerned about long-term complications from COVID-19, consider disability insurance coverage.
-
21 Things You Can't Return to Amazon — Either Online or In-StoreDid you know there are things you can't return to Amazon? Before tossing these items into your shopping cart, be sure to read Amazon's return policy first.
-
How to Avoid a Charity Scampersonal finance Scammers never quit, even when you're trying to be altruistic. But you can avoid getting duped if you do your homework.
