Obtaining a mortgage refinancing has several benefits. However, the
only way to realize these benefits is to qualify for a low rate mortgage.
Even though refinancing a home is ideal for securing a fixed rate
mortgage, without acquiring a lower rate, you may not save on your monthly
mortgage payment. If you are hoping to obtain a low rate mortgage, there
are steps you should take.
Establish a Good Payment Record with Existing Mortgage Lender
When applying for a refinancing, the mortgage lender will carefully
review your credit and assess your payment history with current mortgage
lender. Individuals with a good payment record can expect a low rate on
their refi especially if their credit score is high. On the other
hand, if you have poor credit, and have submitted several late mortgage
payments, a refinance lender may consider you a risky applicant.
Risky applicants may have their refinance application denied. If the
application is approved, the lender will likely remit an offer with a
high interest rate. In this instance, refinancing is not very beneficial.
The ultimate goal is to save money. However, if the savings are
minimal, it is not worth the costs to refinance.
If you are contemplating a refinancing, attempt to submit all mortgage
payments on time. Furthermore, reduce unnecessary debts, which may
boost your credit rating. Homeowners with a good credit score have a better
chance of securing a low rate refi.
Compare Various Refinance Mortgage Lenders
Making a side-by-side comparison of various mortgage lenders is very
effective. After requesting a mortgage quote, lenders assess an
applicants situation and make them an offer. Lender offers will vary. By
comparing lenders, you have the power to select the loan package with the
lowest refi rate. Those who neglect comparing lenders risk accepting a bad
refinancing offer.
Refinance When the Time is Right
Because of declining mortgage rates, many homeowners are jumping on the
refinance bandwagon. However, now may not be the right time to create a
new mortgage. Prior to applying for a new mortgage, you should consider
a few factors. How long do you plan on living in the home? Will a
refinancing create a noticeable savings? What is your credit standing? Do
you have the funds to pay closing costs?
Refinancing while rates are low is great for obtaining a low, fixed
rate mortgage or lowering monthly payments. However, if your current rate
is comparably low, or you anticipate a move in the near future,
refinancing may not be the wisest choice.
View our
Recommended Refinance Lenders Online.
Carrie Reeder owns ABC Loan Guide, an online resource with information about Mortgage Brokers
Online and Bad Credit Mortgage lenders online.
