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 Prepare yourself!
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Is it the right time for me ?
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The scores used to evaluate me
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Am I able to organize my paperwork?
Is it the right time for me?
There are advantages and disadvantages for refinancing your existing loan. The rule of thumb used to be that if rates are 2% lower than your current interest rate, then refinance. It’s not always that easy because every situation is different. If you’re paying a lot of high-interest debts and have enough equity in your home, refinancing might make sense. If you’ve built enough equity and want extra cash, your home can often provide it. Taking advantage of your low mortgage interest rate is often a better alternative than using your credit cards. If your ARM is going to to adjust, you could be in for a payment stress. A good way to avoid paying high rates after an ARM adjusts is to refinance to another ARM or a fixed-rate loan.If you know that you are going to move in a few years, it might be good to get from your high-rate fixed mortgage into a low-rate ARM. Another thimg you have to consider if refinancing is how your taxes will be affected. If you refinance to take advantage of a lower rate, you’ll be paying less each month in mortgage, but more in taxes.
The scores used to evaluate me
You must know how lenders see you.
They will determine your credit your credit-worthiness based on your FICO scores (credit scores used by the lenders to determine your credit risk and the interest rate).
The rate you can expect to pay for a loan is dependent on these scores.
Am I able to organize my paperwork?
You must be aware of the fact that coping with the paperwork you`ll need for the application process is a time-consuming duty which needs a good organization.
It is advisable to make use of the following checklist to fullfil this aim before you find an appropriate home:
- W2 earning statements or 1099 DIV income statements for the last two years
- Federal tax returns for the last two years
- Recent paycheck stubs
- Proof of other income, such as tips, Social Security payments, etc.
- Bank statements for the last few months – showing a balance greater than or equal to the amount you’ll need for the down payment.
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