Refinancing your home mortgage can be a stressful time but it can also very rewarding to you and your family. It is no secret that mortgage rates are at an all time low and they seem to keep getting lower and lower. This trend can not continue forever and we probably will never see rates under 4% in our lifetime. Here are a few helpful tips to make the process easy and smooth for you and your mortgage broker.
Having a current report of your credit can give you an idea of how good of a rate that you can expect. It also lets you see if there are any inaccuracies on it that you need to get addressed. It is not easy to refinance if you have poor credit with current delinquencies. Always pay your bills on time, even if you can only make the minimum payment. Of coarse, it is wise to make more than the minimum if you can afford it. Interest can really add up over the life of a loan.
Another good tip is to use a mortgage broker that has access to several different lenders. They can shop your loan for you to get you the best deal. Going to your local bank might be convenient but they will only offer you their rate, not a list of rates for you to compare. If you are serious about refinancing, don’t settle for a rate that won’t help you financially. Refinancing can get a great way to lower your monthly payments by paying less interest each month, NOT less principal.
Lastly, if you are carrying balances on credit cards with high interest rates, you can combine all you debt into one easy payment. Not only are you making only one payment each month, the balance that you were paying 19% interest on you are now paying only 5% interest. However, don’t make the mistake that some do and begin to rack up credit card debt since all your balances are at 0. You will just dig yourself in a deeper hole.
These are just a couple simple tips to help you if you are thinking about a mortgage refinance in the coming months. Keep your credit card balances at under 15% of your limits. This will increase your credit score and likely give you a better interest rate. It is usually best to take a month or two to get everything in order before you just rush into a new mortgage.