Mortgage : Home Loans : Refinance : Home Equity Loans

By J. Hale

Refinancing isn’t right for every situation, but for some homeowners, refinancing can be a smart move to make. If you have been thinking about getting a New Mexico refinance loan, you’ll want to learn the ins and outs of the process and read all of the fine print before agreeing to anything. Here are 3 things in particular to watch out for:

Interest Only Refinance Loans

An interest only refinance allows you to adjust your mortgage so that you are only required to pay on interest, not the principle. More and more lenders are offering this sort of creative financing. While these loans are perfect for getting into the home you want, it is important to keep in mind that you will end up spending a great deal more over time than you would with a traditional refinance loan.

Prepayment Penalties

A common trick in the lending industry involves tempting borrowers into a low introductory rate loan and then adding a prepayment penalty to the loan terms. This discourages the borrower from paying off the loan early or refinancing before rates increase. Before signing any loan documents that come with a prepayment penalty, you should know exactly what you’re getting yourself into.

Deceptive Lending Practices

Most lenders have your best interests at heart, but others aren’t nearly as reputable. There are some lenders out there who perpetrate New Mexico refinance loan scams. To protect borrowers, the state has enacted a Home Loan Protection Act which prohibits abusive, deceptive, and predatory lending practices. Even with this act in place, borrowers should be careful to review all New Mexico refinance loan documents before signing. To further protect themselves, borrowers can also contact the Better Business Bureau or the New Mexico Mortgage Finance Authority to see what type of complaints, if any, have been issued against a particular lender.

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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This entry was posted on Wednesday, November 22nd, 2006 at 6:31 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.