If your home is in need of some serious TLC, then one of the most financially practical means available to you of meeting that need is through a mortgage refinance. Save the most money possible by following these ten tips for properly refinancing your home to make major repairs:
Work Out your Budget
You need to know for sure that you will be able to afford making payments on the money you take out through a refinance. The only way to do that is to work out your budget.
Get your Credit in Check
Your credit score will largely determine just how low of an interest rate you may qualify for. Order your credit report through each of the three major credit bureaus–Equifax, Transunion, and Experian–to see where you stand and what you need to strengthen before you apply for your refinance.
Save your Money
It is possible that you will have to pay some up front “cash to close” in order to obtain your refinance. Therefore, it is a good idea that you save your money during the months leading up to your application, so that you are ready to close when the lender is.
Shop around for a Lender
Different lenders charge different fees and offer different rates. In order to secure the best rate possible, and at the lowest price, you will need to shop lenders and choose wisely.
Research Loan Options
Learn as much as you can about the options available to you, from home equity lines of credit (HELOCs) to cash-out refinances, so that you are prepared to discuss your preferences with your lender.
Shop Loan Options
Your specific circumstances will determine which program is your best fit, and your loan officer will be able to guide you through different scenarios.
Prepare your Home for the Appraisal
An appraisal is an integral part of your refinance application package. The higher your home appraises for, the better your odds of securing the funds you need, and at the lowest possible rate. Therefore, before the appraisal, make sure your home is in its best possible shape (that is, without having the funds you need for major repairs).
Get Repair Estimates
It would be a mistake to take out too much, or too little, money for your purposes. Therefore, you need to get comprehensive repair estimates before you decide how much cash you want to take out of your refinance.
Set your Priorities
It is likely that you won’t be able to afford all of your major repairs at one time. You need to set priorities in regards to what to focus on first, so that you take out as little money as possible.
Respond Promptly to Loan Conditions
Once you submit your refinance application, it is likely the lender will initially respond with conditions that you must meet before they will issue an approval. It is important that you respond to these conditions promptly, so as to hold on to the rate you have locked in.
A refinance can be the most fiscally shrewd way of giving your home the major repairs it needs. Just be sure to approach the process sensibly by keeping all of these considerations in mind. If you still have questions, consider visiting lendingexpertblog.com for a little more help with your mortgage and refinancing questions.