If all conditions remain right, looking to refinance your mortgage could make sense for very many reasons. If you opt to refinance your home for example, you are likely to end up with significantly reduced monthly payments. Mortgage refinancing could also mean that you will pay less money in terms of interest over the course of your loan repayment period. Lastly, there is the all important benefit of having the ability to ‘cash out’ some of the home equity accumulated over time to be used for such things as home improvements, it could also be used as a down payment for a high-interest debt, or better still, it can cater for a much-needed holiday.
With that said, it therefore goes without mentioning that if you want to refinance your mortgage, you will be looking to get the new mortgage loan funded at the best possible refinancing rates available in the market. The following are some important tips that will help you secure the best deal out there.
1. First and foremost, be advised that the best rates for mortgage refinancing are always reserved for only the qualified borrowers out there. In other words, the ability to get the best mortgage refinance rates mainly depends on your credit score which means that if you have a credit score of between 750 and 770 and everything above that, you will without a doubt get the best rates available.
2. If your credit score falls under the good, fair, or poor categories, you might want to do comparison shopping regardless of whether you already have an offer that seems good at hand. This is because if you applied to 4-5 more lenders, you are likely to get an even better offer thus it is worthwhile to take as much time as possible to look around.
3. It will pay over time to have a good debt-to-income ratio and subsequently extend a significant down payment. Fundamentally, the higher the income you have the higher the debt allowable by mortgage lenders. Note however that having less debt will always be perceived positively than more in the eyes of lenders. For anyone seeking to refinance a loan or mortgage regardless of their credit score, they will always want to be offered the best possible rate. Your good bet is to ensure you have a favorable Debt to Income ratio.
4. Last but not least, don’t just accept blindly whatever first offer that comes your way, always talk to the lender to find out whether they can make an even better offer than the one they already have. Quite often, you can be very surprised to discover that they could extend a better rate, especially if you make them aware that you are in communication with other lenders and have other ‘better’ offers in hand.
Factor in these important tips as you shop for the best mortgage refinancing rates in the market.