Avoid a Wrong Turn: Top Five Things to Watch For When Refinancing

By Gabriel Traverso
Local Lender Columnist
May 14, 2008
For many, the home is the single most important financial investment they'll ever make. When you decide it's time to refinance your MD home you can't afford to take a wrong turn.

Top Five Mistakes You Could Make When You Refinance

Make sure to do your homework before refinancing your MD home. Carefully assess your financial situation, your mortgage options, and watch out for these costly mistakes:

• Choosing the wrong mortgage. When you refinance your MD home you'll quickly find you have a variety of mortgage choices. From adjustable and interest-only loans, to hybrid mortgage products, to the traditional fixed-rate loan there is something for everyone. Make sure you choose the mortgage that fits your financial needs.
• Opening new lines of credit. Whatever you do, whether it's a new car or a new credit card, don't open any new lines of credit before you apply for your mortgage refinance. Conversely, don't close all your lines of credit either.
• Forget to check your credit report. Before you apply go to your MD mortgage lender make sure to check your credit report. You can get a free copy from all three credit bureaus once every year. Just go to www.annualcreditreport.com.
• Borrowing too much money. Many MD homeowners choose to refinance in order to take out some of the equity they've built up in their homes. This can be an excellent way to take a vacation or make the home improvements you've been thinking of -- but check your budget and don't borrow more than you can afford.
• Not shopping around. When you decide it's time to refinance your home, be sure to get at least three quotes from different lenders. Compare offers on the same type of loan and for the same amounts. Not shopping around means you can miss out on a good deal!

About the Author
Gabriel Traverso is a freelance writer, professional musician, and an artist. He resides with his family in Reno, NV.