Mortgage Refinance Rates – How To Find The Best Mortgage Refinance Rates
If you want the best mortgage refinance rates, you have to put some effort into finding them. Refinancing a home is a big commitment, and the interest rate you receive depends heavily on your credit score. Your credit score is determined by a complex set of factors including how long you’ve held your mortgage, how much you earn, and how much debt you’re carrying. Any change in your credit score can reduce your mortgage Refinance mortgage rates if you make prompt payments.
Mortgage rates are affected by a wide range of factors, so knowing which factors will affect your mortgage refinance decision the most is crucial. For example, your credit score affects your mortgage refinance rates more than your employment history or income. Here are several tips to help you choose the best mortgage refinance rates and to save money at the same time.
Look for Mortgage Lenders that offer fixed mortgage refinance rates. You can’t predict where interest rates will be in the future, and many mortgage lenders are hesitant to change their introductory or promotional rates after they’ve been offered for several years. Thus, you may find yourself being offered a fixed rate when you could get a variable rate at a better price by another lender. While there’s nothing wrong with mortgage refinance rates that are fixed, you should look for mortgage lenders that are willing to reduce their rates to better meet current market conditions. If you don’t pay attention to what your mortgage lenders are promising, you’ll pay a lot more than you should.
Look for No-Rs or low-Rs. If you already have a fixed, low-interest rate mortgage loan, refinancing to a new one might not be worth your time or money. Why? Because real costs more than just changing to a new loan with a lower interest rate. In addition, you might be losing valuable time that you’d spend on managing your refinanced mortgage.
Check Your Credit Score. Most homebuyers know that interest rates and mortgage refinancing rates depend on your credit score. But did you know that your credit score affects your eligibility for different programs? For example, if your credit score is low, you’ll have a harder time securing a low interest rate or negotiating for a shorter term.
Compare Rates Across Lenders. A good rule of thumb for mortgage refinancing rates is to compare loan offers from at least three lenders. Before you make a decision, find out if the interest rates from these lenders are similar. This way, you’ll have an idea whether there are significant differences between the lenders, or if you’re just reading the same tall talk from each ad. The Federal Housing Commission reminds potential buyers to gather information on at least three lenders before making a decision and to use this information to choose the lender with the best mortgage refinance rates.
Lower Your Closing Costs. Some people mistakenly think that they can refinance their home for lower than the market value simply by choosing a low loan amount. While it is true that you can save money by opting for low initial payments, the fact is that you will end up paying more over the long run, even after factoring in points paid for title insurance. The best approach to lowering your closing costs is to choose a fixed rate, and then look for one with a longer amortization period that you can afford.
Lower Your Down Payment. If you have enough equity in your property, you might think that you don’t need to consider a lower down payment. However, many buyers are concerned about having enough money to cover closing costs, especially when they come around a few years from now. Instead of settling for bargain-basement mortgage purchase rates, consider negotiating to reduce your down payment and still get great mortgage refinance rates.