If you are considering refinancing your home mortgage, there are a number of common mistakes that can be made. Rest assured that there are a number of precautions that can be taken to avoid making these commons mistakes.

The very first thing you want to do is make sure that a refinance is the right thing for you. A refinance needs to be the right thing for in you the sense that you will be saving in the long run and you plan to stay in your home for a while.

If refinancing is in fact the right move for you, follow these guidelines to make sure to avoid several common refinancing mistakes:

1. Shop for Lenders

When you are making financial decisions as large as refinancing your home, the last thing you want to do is go with the first lender you find. You want to compare the rates that a variety of lender can offer you, so you can take advantage of the best rate possible. If you miss out on a better rate because you failed to sop around, you could also be missing on hundreds of thousands of dollars of savings.

2. Factor in Costs and Fees

Even though refinancing will save you money in the long run, it often requires an investment up front. Factor in the costs and fees from each of the lenders you are comparing to determine if the savings outweigh the expense.

A general rule of thumb is to make sure you are reducing your interest rate by at least one percent in order to see the savings in the long run.

3. Consider the Benefits of a Short-Term loan

Not only do you have a choice in the lender you go with, but you also have a choice in the length your loan. For example, while a 15 year loan might have a higher monthly payment, you will be off the loan quicker and will have a lower interest rate overall. You want to be certain that you can afford the higher monthly payment, which would save you money in the long run.

4. Do Not Delay Locking In Your Interest Rate

When you are making a large decision, such as refinancing your home, you can expect a certain amount of hesitation before pulling the trigger. You want to make sure not to delay the process for too long and miss out on a lower rate. By locking your rate, you and your lender are officially agreeing on the terms of the loan, including the interest rate.

In today's marketing it is always uncertain and interest rates are always fluctuating, so when you have a good rate, do not delay too long and risk losing it. If rates get better in the future and it is beneficial for you to refinance, you can always refinance to an even lower rate again.