For homeowners struggling with their finances or worried they may soon be at risk of foreclosure, the options can be overwhelming. While no one wants to lose their home to foreclosure, not all mortgage debt options are beneficial. For some, refinancing their mortgage loan could lower a payment enough to take the pressure off monthly expenses and avoid the possibility of falling behind on a mortgage payment. While refinancing is one option for preventing a foreclosure, it is important to avoid these common mistakes.
Failing to prepare properly
As with any loan application, your credit score is an important factor in your loan application. It isn’t uncommon for people to jump into an application before taking the time to check their credit score and status. If you go into a refinancing application with poor credit you risk getting stuck with a high interest rate or a flat out denial from the lender. If your credit isn’t in good standing you should consider waiting to apply until you can boost your credit score by paying down other debts or having negative marks removed from your credit profile.
Failing to calculate properly
Many people tend to take online estimators such as Zillow as the source for valuing their home when calculating a refinanced payment. Often, people fail to seek appropriate guidance before jumping into a refinancing application. Not knowing exactly what your home is worth, how much a new loan will borrow, the interest rate on the new loan, and taxes owed could result in you ending up in a worse mortgage payment arrangement than prior to a refinancing. Further, be sure you know how much you will be expected to pay in closing costs to avoid any surprise out of pocket costs you may not be able to afford.
If you are struggling with existing debt problems, are behind on payments, or think you may soon face foreclosure, contact a bankruptcy lawyer in Dayton OH to find out your options for relieving mortgage debt.