Refinance Mortgage Interest Rates – 3 Tips For Getting the Best Rate

If you are like most of us, your home mortgage represents your largest monthly expense – likely requiring you to spend 20-35% or more of your income every month just to make your payments.The fact that homeowners spend so much of their hard-earned money on their home is done with good reason. The home means something unique and personal to each of us. For most people, our home is our shelter, a place to put our things, and a place to entertain and take care of those we care about… a place to be proud of. It is also a big financial investment. This investment vehicle role of the home is another aspect altogether, and one to be taken seriously.Being such a large investment, however, your home is something that you have to work very hard to financially support and maintain. Even if you exclude monthly home-related expenses like utilities and repairs, the monthly mortgage payments alone are enough to place a strain on most people’s finances.If you are feeling the pain of your mortgage payments or just would like to see if you can get a better interest rate, refinancing might be in your near future.Refinancing Your Mortgage Can Be A Smart MoveThere are a number of advantages to refinancing your home. In particular, refinancing can:a. allow you to reduce your monthly mortgage payment amount
b. reduce the total cost of your loan
c. give you the chance to cash out some of your equity for use toward other big expenses like college or home improvementsHow Does Refinancing Work?Essentially, refinancing works much like it does to get a mortgage the first time around. However, with refinancing you already own the home and have a mortgage in place. So, you are basically just swapping out one mortgage for a better one.To refinance, the process goes something like this: you will need to find a low-rate lender – one willing to offer you a better interest rate than you have now. You most likely will get your home appraised (the cost of which can often be rolled into your new loan). And, you specify the terms you want, such as a 10 year, 20 year or 30 year loan. Longer terms means cheaper monthly payments but paying more in interest costs over the life of the loan.How To Know When To RefinanceThere is no single-best time to refinance. However, for most people, the best time to refinance is when you notice that interest rates in the market are down. Or, if you have a better credit score than you did when you got your current mortgage, it could be a good time to refinance. You never know for sure, however, until you apply and get your first offer.Refinance Mortgage Interest Rates: 3 TipsHere are three tips for getting the best interest rates when you refinance your home:1. Get a quote from your current lender last: Your current lender already has an “in” with you. They have a little extra influence and they know it. That is why it is always important to ask them for a refinancing quote last. That way, when you approach them later, you will have in your back pocket 2-3 excellent alternative offers from other firms. Make your current lender work to keep your business!2. Check your credit score: Before calling around or applying online for a new loan, be sure to run your credit report first. Knowing your score before you call gives you an advantage. Also, it allows you to fix any glitches or mistakes in your credit report.3. Get quotes from at least 5 lenders: Make sure you spend the extra hour or two required to research multiple lenders. By getting quotes from multiple lenders, you will only be increasing your chances of landing an offer. You should consider accepting the best offer you get, as long as the new interest rate is at least 0.5% to 1% lower than your current rate.Follow these 3 tips to secure the best refinance mortgage rates.

Refinance Home Mortgage Rates – Should You Take the Discount Point Or No?

With refinance home mortgage rates super low right now, you are probably thinking you should take advantage of it. You already researched everything you could research on your own. So you know that your home’s value is enough to cover the whole loan in a refinancing transaction. Your credit score is over 700, which is excellent. And your income to debt ratio is very good. You make more than enough for even several house payments. Ok, so maybe that’s not the case, but that does not mean you will not quality. Working with a good loan officer, you will be able to find a solution that will let you lock in an excellent interest rate. So, as you are going through the paperwork, the topic of discount points comes up. Should you take the discount point?The answer all depends on what you are planning on doing in the future. Are you planning on selling within 5 years? Or are you planning to stay for the long term?If you are going to sell, you have to consider the real estate market. Will you be able to realistically sell and make enough money to have made it worthwhile? Right now, it is unlikely that a house will appreciate enough to make it worthwhile. You have to consider that you will be paying the realtors’ commissions which will amount to 6%. Then you may have to pay taxes and insurance so that you will have a buyer. This all adds up and if your house has not appreciated by at least 10%, then you would be losing money and thousands at that. But if you are confident that you will be able to sell, then it would be wiser to not take a discount point as it will only add to your cost. If anything, you might want to take a slightly higher rate just so you get the rebate upfront. If do some calculations, you can figure if the upfront savings will be more than what you would pay on the interest and when the break-even point is. This will let you know the deadline by which you would need to sell before you starting losing money.If you are not going to sell your property, then of course, taking the discount point is the wisest course. You will be locking in at one of the terrific refinance home mortgage rates available right now. In the long term, you will end up saving a lot in interest payments. It really is amazing how much you really do end up paying.