Biggest Refinancing Mistakes

Do not be the person who says,  “I didn’t make a mistake. It was just a learning experience”. Below we have put together a list of common mistakes that we commonly see at America’s Moneyline. If you avoid these as best as possible then your experience should not be a “ learning mistake”.

Mistake ONE: Not locking in your rate 

Do not procrastinate when the time comes to lock in a rate. Each day you wait can cost you quite a bit of money. Believe it or not, even the smallest rise in interest rates can make a large impact on your monthly payments.

Mistake TWO:  Not doing your homework

Unlike your old school work, there are no excuses for forgetting to do your homework. If you want to receive the best refinance, then you have to be prepared to dive deep into your credit score, your refinance options, your loan to value ratio, and your debt to income ratio.

Mistake THREE:  Adding large new debt to your credit before closing

Do not add any debt to your credit while making a decision to refinance. Purchasing new items on credit will raise your DTI (debt to income ratio) thus affecting your chances of getting a better interest rate. Lenders typically are more likely to favor somebody with a lower DTI  because that places them in a better position to make timely payments  . 

Mistake FOUR: Only refinancing for the interest rate 

When the opportunity arises to lock into a lower interest rate, pause and re-evaluate your housing schedule. If you are planning on moving within the next year, refinancing is probably not worth it. Instead, save that money for your move because refinancing is not free. 

If you have any questions about the refinancing process, do not hesitate to reach out to America’s Moneyline at any time!