Chicago’s North Shore is a wonderful place to call home, and many have found the beautiful homes, excellent schools, wide variety of things to do and close proximity to the metropolis of Chicago to be more than enough reason to permanently settle in this vibrant area.
However, the economic downturn of the past few years has caused some North Shore homeowners to turn to selling their home or to think through their finance options. Some home owners simply want to be able to cash in on the currently low mortgage rates and have turned to refinancing their North Shore home.
If you’re one who is considering the refinancing option, you’ll want to be aware of five mistakes that are common with those taking this route. As a North Shore Real Estate agent, I want to make sure you’re on the right track and fully prepared to venture through the refinancing process. Take a few minutes to review these avoidable mistakes.
1. Over-estimating the value of the home- Although home prices have fallen over the past few years, homeowners still put high value on their homes. As a result, they receive higher-than-expected loan offers. Your North Shore Real Estate agent will be able to show you what comparable homes in your neighborhood are currently selling for so you can get a better idea of what your home is worth.
2. Hesitating to lock in low rates- Waiting for rates to drop even lower can be the biggest mistake as there’s no promise that rates will remain low. Take the opportunity now to lock in these historically low rates before it’s too late.
3. Focusing only on interest rates- While interest rates are important, those aren’t the only factors to consider when refinancing your North Shore home. Lender fees, loan terms and even lender reputations will play a role in refinancing. Using online tools, such as Mortgage Professor to run all the numbers can be useful to determine if financing is even the right choice for you.
4. Overlooking shorter-term loans- Although the 30-year mortgage loan is the most popular, remember that there are 20 or 15-year mortgages that may be a better option. These shorter loans can save significant amounts of money since you’ll be reducing the amount of paid interest over time.
5. Not knowing what documents are required to refinance- It’s important to know which documents are needed before you begin to refinance. For those of you who haven’t taken out a mortgage or refinanced lately, you may be surprised to find there’s more documentation needed than in the past. Pay stubs, two months of banking and other financial statements, two years of W-2’s are just some of the documents required to refinance.
Of course your North Shore lender will be able to walk with you through the process, and as a North Shore Real Estate agent; I’m always here to help answer any questions you may have!
If you’re thinking of selling your current North Shore home or looking to buy in Winnetka, Glencoe, Northbrook, Highland Park, Deerfield or any other North Shore area, I would love the opportunity to work with you! Feel free to contact me anytime to get started!
Janie Bress
Your North Shore Real Estate Expert
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