Refi mortgage rates are lower than normal rates. Big advantage: Lower interest rates reduce your monthly payments. Important Note: published interest rates may differ from the actual rate that was quoted because of various factors which consider your current credit score, income ratio, repayment options, kind of mortgage loan, mortgage qualification and area. Therefore, we suggest that you use the Mortgage Rate Predictor to determine your refi mortgage rates.
Your refi mortgage rates may be influenced by two factors: the new mortgage loan amount and your financial status. Your financial status can be improved if you plan on consolidating your debt. And, if you are in the process of rebuilding your credit score, refinancing may be your best option. The new mortgage loan amount will be determined by your income and the existing balance of your debt, plus the interest rate. Here are several tips for refinancing your refi mortgage loans to achieve better refi mortgage rates.
Determine your loan amount: For refinancing, you have to know how much you can afford to pay back as your monthly payments. This includes your interest rates, closing costs, insurance, property taxes, etc. Calculate your roughly equivalent monthly income and allocate the rest as your down payment. Also, consider the refinancing cost. Make sure you get the best refinancing deal that matches your current financial circumstances.
Research for quotes: Refinance mortgage deals are available from a variety of sources. Start by researching online and comparing the quotes of various lenders. To make it easier, log on to Lending Tree and check out their free mortgage guide. You can also find one of the best refinance mortgage calculators here.
Apply, with the right lender: Find the right lender and apply for a home loan at the right time. The ideal time is after getting your credit reports and making a few payment history corrections. The refinancing when interest rates are down is even more preferred. A refinanced mortgage loan may take some time to get approved but this will only be a small cost if you can save up to fifteen-year home equity in your mortgage.
Negotiate interest rates: If interest rates are not attractive for you, do not just accept them. Try to get a competitive interest rate by negotiating with lenders. Ask your friends, family members and colleagues for tips. A good tip here is to request for multiple quotes and compare them. This way, you can easily spot the best deal in the current market and negotiate for it.
Opt for longer loan term: The best option is to opt for a longer fixed-rate home loan. Here, you will be able to lock in low interest rates as well as avoid monthly installment of additional loan amount. A refinancing plan with an adjustable-rate mortgage usually involves a higher initial payment amount. However, it offers long-term benefits such as lower percentage points on your mortgage payments and locking in lower interest rates over a longer period of time.
Switch to a longer-term 30-year loan: Switching to a shorter-term mortgage product or changing your existing mortgage provider is a better option to lock in low interest rates. You should also consider dropping an additional property that is being held as security in case the current loan defaults. It will take a couple of years for the effects of higher interest rates to show up but it will be worthwhile in the long run.
Negotiate for mortgage rate reduction: One way to get a lower interest rate, is to convince the lender to reduce the outstanding balance on the original loan. This can be achieved by reducing the size of the loan that you owe. Another option is to increase the repayment period or the level of the monthly payment. However, before negotiating, it is important to understand the pros and cons of the proposed action.
It is important to remember that even if you get a lower refi mortgage rates through refinancing, it does not necessarily mean that the cost of borrowing will be lower. There are other costs associated with refinancing, which need to be taken into account. Hence, it is important to carefully consider the costs and benefits of the entire mortgage rate reduction transaction before deciding to go ahead with it.
Refi mortgage rates can change drastically: You should keep in mind that even after locking in a real interest rate, the interest rates can go up. Therefore, it is important to take note of the market trends and fluctuations before locking in your refi mortgage loan. It helps to compare rates offered by various lenders in advance. Lenders may offer attractive interest rates at one point of time, but later they may reduce their offer. Hence, it is important to be informed about the current real interest rates before you opt for a refi mortgage loan.