by Carla Turkelton
There are several benefits in obtaining a mortgage refinancing. 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 low rate mortgage is what you are hoping to obtain, then try to consider these steps.
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. For individuals with a good payment record, they can expect a low rate on their refi especially if their credit score is high. On the other hand, a refinance lender may consider you a risky applicant if you have poor credit and have submitted several late mortgage payments.
Risky applicants may have their refinance application denied. Having the application approved would mean that the lender will likely remit an offer with a high interest rate. In this instance, refinancing is not very beneficial. Here, the ultimate goal is to save money. However, it is not worth the costs to refinance if the savings are minimal.
Attempt to submit all mortgage payments on time if you are contemplating on refinancing. You should also reduce unnecessary debts which may boost your credit rating. If homeowners have good credit, then they have a better chance of securing a low rate refi.
Comparing Various Refinance Mortgage Lenders
It is very effective to make a side-by-side comparison of various mortgage lenders. After a mortgage quote is requested, an applicant?s situation will be assessed by lenders and an offer will be made. Each offer of lenders will be different. You have the power to select the loan package with the lowest refi rate if you compare lenders. Accepting bad refinancing offer will be the risk for those who neglect comparing lenders.
Wait for the Right Time to Refinance
The mortgage rates are declining which is why a lot of homeowner are jumping on the refinance bandwagon. But still, it 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? Do you think a refinancing will create a noticeable savings? Try to determine what your credit standing is. Do you have the funds to pay closing costs?
For obtaining a low, fixed rate mortgage or lowering monthly payments, refinancing while rates are low is a great option. However, if your current rate is comparably low, or you anticipate a move in the near future, refinancing may not be the wisest choice.
Source: http://phoenixlivingnews.com/refinance-mortgage-rate-how-to-get-the-lowest-rate/2012/03/
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