You need a 1% drop in your interest rate before a mortgage refinance is a smart play. Over the years this rule of thumb has been passed on by countless financial advisors, mortgage brokers and real estate professional experts.
What is a rule of thumb? It’s a way to fast-track something, a decision or a way of breaking down complex information in order to make a decision, take action or arrive at an understanding.
In a society where we #InstaDemand everything it’s no wonder rules of thumb, including for your mortgage, apply now more than ever.
5 key steps to maximize your refinance:
Stabilize the property
- Repair or, better yet, replace any major items -- such as a roof, HVAC, or any cosmetic work the property might need
- Create additional bedrooms: by adding a few walls around a window and putting in a closet, you’ll turn $1000 into $10,000
Simplify your documents
- Getting approved by a bank for a refinance isn’t a simple 1-2-3
- The more organized your financial documents the more willing a bank will be to work with you. Having them on a Google drive is a simple, free solution they’ll appreciate
Meet the appraiser
- People love stories – including those behind your properties
- Whether you just renovated the property or updated the HVAC, plumbing and electrical, the appraiser only can appraise what they can see
Pull comps of similar properties
- Often the most important missed step
- Pulling comps of similar properties, that are priced higher, doesn’t only sell your story but builds on the quality of your property
Keep everyone accountable
- Simply put – deadlines can make or break a deal
- As the timeline progresses the 3-2-1 strategy never fails – in the beginning check in every 3 days, during the midpoint check in bi-daily and, as you near completion, check in daily only if it’s absolutely required
Whether your property’s refinance is for completing renovations, buying an investment property or reinvesting the money; by knowing, understanding and practicing these rules of thumb you’ll be able to maximize the return on your next refinance.