Rates for refinancing do not always align with home purchase rates.
Yet, there’s hope: Low rates for refinancing is very doable. It will just take a little extra work. Here are five ways you may be able to score a good interest rate if you’re thinking about refinancing your mortgage.
15-year, fixed-rate loan
By committing to a shorter term, lenders may reward borrowers with a lower rate than can be had with a traditional 30-year rate.
It’s important to keep in mind that a 15-year plan means monthly payments will be marginally higher. Greater budget flexibility, then, is a must.
On the flip side, a 15-year mortgage may significantly cut the amount of interest paid over the duration of the loan.
Identify low rate, lock it in
With so many unknowns ahead with the coronavirus emergency, anything can happen with respect to the economy.
Rates can fall, but they can also trend upward.
That is why it’s important to identify a low rate and lock in without delay.
Some programs will allow you to lock in a rate for a period of time, or you can always refinance if rates drop further. That decision should consider the costs in the short and long term.
Comparing refinance rates, regardless of the program, is advisable.
Customers pleased with their current lender can start by reaching out and discussing available options.
If the rate doesn’t seem too attractive, they should compare it with rates that competitors offer.
Protect credit standing
Obviously, a good credit score is essential for most loan approvals.
Your debt-to-income ratio will weigh heavily on a lender’s decision, as well.
Avoid opening new credit accounts or new loans. New accounts can reduce scores, and utilizing the credit will increase the ratio.
During this important time before shopping for a new loan, it’s vital to focus on the fundamentals, including a solid credit score and prudent money management.
Attorneys Funding Group is a full-service mortgage company. We offer conventional financing, FHA financing, VA financing, refinancing, and mortgage consultations with real estate attorneys. Contact us if you are interested in mortgage help.