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Are you struggling with your monthly mortgage payments? If answered yes, you must try your best to refinance your home loan as this is the best way to get back on your current monthly mortgage payments. Most mortgage loans carry high interest rates and with the unemployment rate touching a record level, an increasingly large number of homeowners are not being able to cope up with their monthly mortgage installments. Refinancing is just taking out yet another home loan with favorable interest rates and terms so that you can repay the previous loan with ease. While there are many homeowners who want to refinance their home loans, they all love to know the ways in which they can get the best refinance rates in the market. Have a look at the ways in which you may secure low rates on the refinance loan.
1.Check your credit score: As you know that the lenders will always check your credit sore before lending you with a new line of credit, you must try your best to boost your credit score in order to get the best rate in the market. As the credit score is the best way to track the financial history of a person, you must take good care about the financial habits that can drop down your score. Most financial experts often say that one must initially go for credit repair before applying for a home loan so as to grab reasonable interest rates.
2.Shop around among different lenders: Refinancing can be done from your previous lender and from any other lender too. If you want to change the lender from whom you want to take out a mortgage refinance loan, you must shop around extensively so as to make sure that you get the most competitive rate in the market. The lenders are waiting to offer you the loans of their companies and thus you need to make sure that you’re choosing a loan that has the perfect interest rate that can help you save your dollars on the mortgage loan.
3.Pay points on the refinance loan: Even if your credit score is not enough for you to secure a loan with an affordable rate, you can still get the lowest refinance rates. This is possible by paying points while taking out the new refinance loan. A point is1% of the loan amount that has to be paid in cash during the closing. This can lower the rates.
4.Choose a different term:If you refinance your mortgage loan at a 15 year term mortgage loan, you can get low rates on the loan. However, a 15 year term mortgage loan will require high monthly payments but will also ensure low rates at the same time.
Therefore, if you want to refinance your mortgage loans at a lower rate, you can easily follow the tips mentioned above. Get a loan at a low rate and repay the loan with ease, thereby retaining your home ownership rights.
Economic times seem troubling. But they don’t have to be, not for everyone! Mortgage rates are low and can be translated into super savings for borrowers who qualify. But there are some things you must know before you decide whether or not to refinance in the current market!
Before you even consider refinancing, you have to think about what you are refinancing. Many Americans have lost all of their equity, Zillow estimates that 1 in 7 American homeowners have negative equity in their homes. Generally, you will need at least 3 percent equity in your home to refinance. If you do not have three percent, refinancing may not be an option for you.
It’s not as easy as you think. Most people’s applications will not be approved. The economy is in a state of turmoil and this trickles down and affects everyone. Many lenders are not making it easy to refinance.
Another consideration is your FICO score. You will most likely need a score of 740 and above to be able to secure some the best rates of the market. It may not be worth financing, even if you get approved and your FICO is less than 740 because you may be paying a higher rate.
Next, even though it seems that the rates are unbeatable, you will have to carefully think about your finances when you are considering refinancing. First, I suggest you take a look at your current rate. What is it? If your rate is about 6%, perhaps it may be a good time to refinance, since your rate is more than one whole point above the market’s current rates. Also, keep in mind rates for loans above the current FHA limit ($729,000) will have much higher rates than those within the FHA limit. Another thing you must consider are fees. The more you pay in fees, the less you are saving, even at a lower rate. Calculate how much you will be saving with the lower rate and if you can recover what you pay in fees in three years or less, then refinancing may be right for you.
The fees that you will have to pay vary, however you have options when it comes to paying these fees. You may want to pay cash for these fees, take a higher interest rate for lower fees, or simply add the fees into your mortgage. You will need to talk to your mortgage specialist and he/she will provide you with the best advice for your situation.
Shopping. The best way to get the best rate and the best deal is to go shopping. If one lender says "No" that does not mean that no lender will refinance you. The era of the mortgage lender who hunts you down is over. It is now time for you, the consumer, to seek out the best lender for you with the best deal for your situation.
You’re not alone. The economy may be slow, but the industry is not. Mortgage lenders are swamped! They are inundated with work and faced with downsizing and lay-offs, they often struggle. Keep that in mind when you submit your application. Be patient and realize that it may take upwards of 30 days to hear back from a lender.
Feel free to contact me with any questions you may have, we, at Crestico Realty are here to help!
