Refinancing a mortgage for a Knoxville home can sometimes end up costing more than what it should if you haven’t properly researched a few things. There are many costs involved with refinancing, and by doing a bit of homework first you can cut these costs considerably. Here are a few things to keep in mind when you want to refinance your mortgage in Knoxville.
#1 – Consider getting a short-term mortgage
Usually the costs involved are much less when you opt for a short-term mortgage for a Knoxville home versus a long-term one. A short-term mortgage is generally fifteen years in length, while a long-term one is about thirty. A short-term loan is often less costly because the lender is carrying less risk on the home in Knoxville. Even though you will be paying a much higher monthly rate, your initial costs will be less and you will be paying less interest overall.
#2 – Private mortgage insurance
PMI, (private mortgage insurance), is usually required if you are borrowing more than 80% of the value of your Knoxville home. It is very costly and is only useful for the lender. For the homeowner it does no good at all, so avoiding this costly expense will reduce the overall cost of refinancing. You can ask your lender if he requires PMI if you are borrowing over 80% of the Knoxville house value. If it is required, you may want to try to find another lender that will not demand it.
#3 – Get more than one quote
Every Knoxville lending institution has its own rules and guidelines it follows when refinancing a mortgage. There are many different financial institutions in Knoxville that you can approach, and once you get your quote be sure to read through all the fine print and be certain you understand it fully. One difference between two quotes can add up to thousands of dollars in the long run.
Many people are choosing to refinance their Knoxville house mortgage during this economic crisis. By following these few simple tips you can end up saving a lot of money on costs.
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