1. Taking out a Home Equity Credit Line Before Refinancing.

    If you took out your equity line after you purchased your home, the Lender will consider your loan a "cash out" transaction, and your loan will be subjected to additional fees for taking      cashout. Cash-out followed by refinancing may represent a pattern of irresponsible credit use; a red flag for any lender. This can lead to stricter requirements, and a possible rejection of your mortgage loan .

2. Not Doing a Break Even Analysis.

Don't be like so many people who fail to evaluate the money you will spend to refinance when determining whether or not to obtain a new home mortgage loan . It is important to compare your total transaction costs with how much you'll save each month by lowering your monthly mortgage loan payment. Simply divide the transaction costs by your anticipated monthly savings to determine the number of months you'll have to stay in the loan to recoup your refinancing costs. Or contact Platinum Funding for a free Break Even Analysis.

For example, if the costs of refinancing total $2000, and you save $50 per month, your break-even point is 2000/50 = 40 months. In this case, you should only refinance if you plan to stay with the new financing for at least 40 months.

Note: The above example is suited to comparing two similar mortgage loans when the intent is to lower your monthly payment and recoup transaction costs relatively quickly. Other refinancing transactions require different kinds of analyses which are beyond the scope of this document. Fortunately, there are many online tools and resources which can help you weigh various mortgage loan options. These types of refinance transactions include switching from a fixed rate mortgage loan to an adjustable rate mortgage loan (ARM), or shortening the mortgage loan term by exchanging a 30-year mortgage loan  for a 15-year mortgage loan .

3.  Paying For an Appraisal When You Think the Appraised Value May Be Too Low.

Don't pay for a formal appraisal if you think that the home has a low appraised value . Home value is determined by many factors, including location of the home. Lenders use a market analysis based on the value of homes in your area to determine value.  Contact Platinum Funding for a FREE Property Value Check .   It takes into consideration the value of homes like yours in surrounding communities. Avoid the high cost of formal appraisal by utilizing this approach.

Taking this first step will allow us to provide you with a range of possible values. This will allow you to determine if your home is priced within the expected parameters of the financing you are seeking. Especially in todays market, where home values are stabilizing or declining; it makes economic sense to save your hard-earned money if you will not qualify for the  mortgage loan due to the value of the property. Do not waste your money on a complete appraisal if you believe the home is unreasonably priced. Contact Platinum Funding Now For a FREE Property Value Check.

4. Depending On County Assessor Value When Determining the Value of Your Home.

Mortgage loan  companies do not use the county tax assessor 's value to help determine if they'll originate your mortgage loan. They, like real estate agents, usually use the sales comparison approach (Click here for a FREE market data comparison). The tax assessor's value is irrelevant to the actual value of your home.

5. Using Your Current Lender When Refinancing.

Although you may have a good history with your current mortgage loan lender, you won't get the best deal when you refinance.  Your current lender will require the same documentation as other every other mortgage company, but as you know, you can get at least .75% better rate from a Mortgage Broker than going directly with your current lender. Each time you refinance your financial picture needs to be re-verified. Your previous mortgage loan represented a snap shot of the past; any mortgage lender (including your current one) will need to start from scratch to verify your current financial situation. You will still be subject to re-qualification; even if you've developed a good relationship with your existing mortgage lender.

If you are buying a new home, do your research and shop around for the best deal. Generally, mortgage lenders require the same documentation and approval process that you went through when buying your home originally. Click here for a FREE QUOTE!

6. Not Getting a Good Faith Estimate of Closing Costs.

You will want a good faith estimate (GFE) when securing a refinance mortgage loan . . Within 3 working days after receipt of your completed mortgage loan application, your mortgage loan company is required to provide you with a written GFE of closing costs. However, don't make the mistake of shopping for your mortgage loan via a simple comparison of GFEs!

7. Not Getting Your Rate Lock in Writing.

Be sure this is in place before continuing the mortgage loan process. Know the length of time the rate lock is in effect, and insure all particulars, such closing costs, and any other fees are listed. A mortgage loan officer can quote you an interest rate... and within a few hours interest rates change based on always changing economic data impacting Wall Street the primary driver of interest rates.

When you lock your rate, get a written statement detailing the interest rate, the length of time of the rate lock, and other particulars about the program.  Request a copy of the lock for your records.

8. Signing Documents without Reading Them!

Do not sign documents in a hurry. As soon as possible, request a copy of the mortgage loan documents in order to review what you'll be signing at close of escrow . This way, you can review them and get your questions answered well in advance of your signing appointment. Do not expect to read all the documents during at your closing appointment. You will feel pressure to complete them quickly due to the presence of the notary. Make sure you fully understand the mortgage loan documents you are signing. Be on particular look out for items such as the "Note", that gives a very detailed breakdown of the terms of your loan, prepayment penalties, ARM riders and the Estimated Closing Statement. Bring a copy of your original Good Faith Estimate with you to the signing table so you can compare closing costs and ensure that you are receiving the same deal you originally negotiated.

9. Delay in Getting Documentation to Your Lender.

One of the most common complaints that home owners have when refinancing is that the process takes too long. While a typical refinance transaction should take less than 30 days; it is often up to you to determine how fast your new mortgage loan is funded. When your mortgage loan company asks you for additional paperwork or documentation--get cracking! They are working to approve your mortgage loan, and the quicker you get pertinent documents to them, the better off you are! The verifications, backup documentation and additional information they've asked you for has been required by the underwriter after the initial review of your loan. Your mortgage broker is trying to get you approved!

By delaying you simply extend the refinance process. If too much time transpires between your broker 's requests and your delivery of the documents you could end up with a higher interest rate should your rate lock expire.