Getting great terms on your mortgage loan is the key to successfully owning a home. Low-interest rates translate to low monthly payments that don’t strain your finances. Again, low-interest rates ensure that you build equity in the home quickly.
If you are not in great financial shape when first applying for a home loan, you might miss all these benefits. Luckily, you have a second chance, and you can use to make things right with a refinancing option.
For the best results when looking to refinance a mortgage in Utah, finance expert City Creek Mortgage states that you need to address some crucial factors that underlie a successful process.
Spruce up the home
A home appraisal is a core component of the refinancing process as the lenders want to be sure of the home’s current value. Naturally, if the house falls below market value, your application may not go through. While you can do nothing about the location and the neighborhood, you can ensure that your home is in good order.
Typically, you need to ensure all the major systems – plumbing, heating, AC unit, electrical – are in good working condition. Any recent upgrades to make the home more comfortable may also increase the value. Repairing any broken or unsightly feature of the house also helps to bump up the cost.
For the best result, assume that you are putting the home on the market and eliminate as many shortcomings as possible.
Clean up your finances
In addition to giving your home a sprucing up, you need to replicate this with your finances as well. After all, it is a money transaction. First order of business would be to increase your credit score and push it past the 700-point mark. At this level, the lenders are likely to view you as a low-risk borrower.
You also need to stay ahead of your bills and ensure that you only carry good debts in your credit history. Paying all your debt in full or making timely monthly payments as agreed upon, improves your chances. In whatever you do, don’t miss a mortgage payment or send it in late.
The key here is to be the poster child of financial stability.
Refinancing your mortgage puts you a step closer to realizing the dream of owning a home. It helps you build home equity faster while saving you a bundle of cash.