Getting the Best Mortgage Refinance Rates
The average rate for a standard 30 year “non-jumbo” or conforming loan is at its lowest rate in over half a century.These historically low rates mean that homeowners and other real property borrowers can save a great deal, not only on monthly payments, but also interest payments over the lifetime of the loan. This means that there should be a historically high volume of new loans from refinancing, but getting a new Mortgage Refinance deal can be challenging, given the obstacles of low appraisal values and tight lending standards that are the aftermath of the credit meltdown of 2008. Here are three things that you can do to increase your chances of benefiting from today’s low rates:
1) Fix Your Credit
This may sound self-evident, but many borrowers approach mortgage refinance lenders without having a clue what their credit score is, which can lead to unpleasant surprises. To get to the Magic number” of 740, ensure all regularly scheduled payments are paid in full in a timely manner, and set reminders to ensure payments aren’t accidentally missed when for example you might be on vacation, or experiencing some other disruption of your normal routine and budget. Fixing your credit is one of the easiest ways to get low rates on your mortgage refinance.
2) Get the Best Term Loan Term
If you are already significantly into a mortgage, and in good standing, you can save monthly and total loan lifetime interest payments by shortening the term of your loan. A growing number of lenders are shortening the term length of the loans they are offering, with some as short as 10 or 15 years.
3) Shop Around
Rates are at multi-year lows, so mortgage refinance rates should not actually vary too much company to company, but you would be surprised. In addition, closing and other costs associated with initiating and processing your loan can vary widely from company to company, so it is wise to shop around for the most cost-efficient alternative. Prospective borrowers who are employed, and have been so for two or more years, with a good credit score, tend to have the most power in the bargaining channel, so don’t be afraid to ask for consideration that may not at first be offered to you. The time it takes to appraise and approve a loan or mortgage refinance can vary as well, so try to find a lender that will shorten this time as much as possible, and lock in your rate for as long as 90 days if necessary.