I’m Looking to Refinance. What Mortgage Rate Can I Get?

How can a refinance impact your mortgage rate, and is the impact positive or negative? Click here to find out everything you need to know.

Refinancing can be a great step toward securing your financial destiny.

Since your home is your most prized asset, you’ll need to learn a little bit more about the refinancing process.

When refinancing a home, it boils down to working with lenders to create better interest rates and other terms. If you are looking to refinance, you’ll need to understand some guidelines that will help you out.

We’ve got you covered.

Read below so that you can learn about the benefits of refinancing, some points to consider and steps to take for success.

The Benefits of a Refinance

Since you’re thinking of refinancing your home, start by considering the advantages.

The most apparent advantage of refinancing your home is that you will be able to receive affordable interest rates. Since interest rates are subject to turbulent markets, locking in new rates can save you substantial money in the long run.

When you refinance, you’re able to pattern the terms of your loan in a way that suits you. With most mortgages, you’re forbidden from paying the loan off early.

What if you finally land your dream income and would like to cut a check?

This is a perfect reason to refinance, as you can change these terms to your liking and settle up with the lender.

Many people also use mortgage refinancing for business ventures. You may be able to refinance your home to include a Home Equity Line of Credit (HELOC).

With a revolving line of credit equal to your home’s value, it’ll be like having a high-powered credit card that you can use to finance your dreams.

Simply put, there are certain times in your life in which a refinance might be the best case scenario. You get to keep your home, but pattern the home loan to serve you based on your current circumstances.

With this in mind, let’s take a look at some reasons that refinancing might not be right for this time in your life.

Reasons You Might Not Want To Refinance

Credit is the biggest factor related to whether or not a refinance is right for you at the moment.

If your credit isn’t too hot, you typically won’t be able to receive better rates during a refinance than your current situation.

Your credit report and history will be the first place lender’s check, so make sure work diligently to improve your credit before applying.

You must also keep in mind that refinancing comes at a price.

There are always fees associated with refinancing a mortgage, so you must ensure they are affordable. Having your credit in prime condition will open you up to the best new mortgage interest rates.

Some of these fees include application fees, credit report fees and the cost of the home appraisal.

Before applying, consider credit counseling and shore up as many of your debts and balances as possible.

It’s also very important to wait to refinance unless you have access to an accurate and recent appraisal. If your most recent appraisal doesn’t reflect your current home’s value, you won’t be able to get great terms on a refinance.

If you’re ready to move forward with the refinancing process, let’s explore what you can do to get the best rates and terms.

What To Know About Getting The Best Rates

Getting a mortgage is a detailed process, which explores many facets of the market and your financial history. As a result, these tips below play a huge role in the interest rates you get during your refinance.

#1: Tailor The Loan To Your Desired Terms

When you look to refinance a loan, it’s critical to understand the key terms.

You’ll need to research the principal amount, how long the loan is set to last and the interest rates.

Refinancing lets you dictate these terms to your liking. For example, you might have lower monthly payments on a 30-year mortgage, but a greater amount of interest. Switching to a 15-year mortgage at lower interest rates can significantly reduce the money you owe overall while raising your monthly payments.

Make sure to decide whether you want the interest rates set in stone or fluctuate throughout the different periods of the loan.

#2: Choose The Right Financial Lender

The key to a quality refinance is working with a lender can trust.

This process boils down to finding out which lenders are most credible and also taking in quotes on mortgage rates.

As a hint, you will typically get more favorable rates at credit unions, as opposed to going with banks. By approaching these credit unions with your credit intact and a willingness to explore plenty of options, you put yourself in a position to get the most favorable refinance.

#3: Understand The Current Market

The housing market in its current state plays a huge role in the rates and terms you’ll receive. When economies are booming, you’ll receive lower interest rates and will apply with less stingy lenders.

When the economy is tight, you really need to have your credit at its best and competitive rates go by the wayside.

You don’t have to read the Wall Street Journal, but stay tuned to the markets, in order to get a clearer idea of the climate you are choosing to refinance within.

Reach Out To Lending Professionals

All in all, you’ll be in a great position to refinance using this information. Refinancing your mortgage is a win-win situation as long as you tailor it to your financial needs.

Take an honest look at your current house, finances, and reasons for refinancing before taking any further steps. This thought process informs the rest of the process, so come to some understandings on your own first.

Make sure to research and thoroughly read any refinancing agreement you are interested in signing. Treat the refinance with the same importance that you treated the initial home closing and you’ll be in good hands.

After taking account of this information, contact some mortgage lenders who can help you with the refinancing process.