November 3rd, 2017 7:26 AM by Jackie A. Graves, President
mortgage rates are low, you can cut your monthly house payment by refinancing into a better interest rate.
you can shave at least one-half of 1 percentage point off your current mortgage
rate, it can be worth your while to trade in your existing home loan for a new
are some tips for getting the very best refinance rate.
Polish up your credit
sure you are paying your bills on time — especially your mortgage — in the
months before you apply for your refi loan, so you’ll have the strongest
possible credit score. The better your score, the lower your interest rate.
open or close any other credit accounts during this time, because that could
lower your credit score.
your free annual
credit reports from the three major credit bureaus (Equifax,
Experian and TransUnion) to be certain there are no errors or old debts on your
credit record that don’t belong there. Those can weigh down your credit score.
can get a free credit report and credit score from myBankrate.
bigger chunks of credit card or other debt will help boost your
typically prefer that your total debt add up to less than 43 percent of your
annual income. If you can reduce that debt-to-income
ratio, you can land a lower interest rate.
you have a 30-year mortgage that you’ve had for several years and refinance
into another 30-year loan, you’ll drag out your mortgage debt and interest rate
payments over a longer period — unless you sell the house before the end of
could choose a shorter-term refinance, such as a 15- or 20-year mortgage, and
enjoy a lower interest rate.
2017, rates on 15-year fixed-rate mortgages have been about 80 basis points
(0.8 of 1 percentage point) lower than rates on 30-year fixed-rate loans,
according to Bankrate’s weekly survey.
note that a shorter-term loan will come with a higher monthly payment.
also might consider refinancing a fixed-rate loan into an adjustable-rate mortgage, or ARM. Those tend
to come with lower interest rates, at least during the initial years before the
rate starts “adjusting.”
you think you may be staying in the home for the long haul, an ARM may not be
the right choice for you.
Shop local, then widen your net
rate quotes, starting with the lender holding your current mortgage. That financial
institution has an interest in keeping your business, so it might offer you an
attractive refi rate.
search lenders in your area, including smaller banks and credit unions.
Sometimes, a lender that’s trying to expand in your market will offer a good
deal on your rate, to win you over as a customer.
your comparison-shopping to the largest lenders, plus online lenders.
check lenders specializing in the type of property you own. Some lenders
specialize in high-rise condos or beach communities and might offer you a
better rate because they are more comfortable with your property.
lenders about fees and closing costs, so you can determine whether your refi will really save you money.
all you ask is ‘What’s your rate?’ then chances are the mortgage banker will
help you with one situation but may not get what’s best for you,” says
Bill Banfield, an executive vice president at Quicken Loans.
Know when to pounce
Mortgage rates can
fluctuate, so you have to get the timing right and know when to lock.
on 30-year mortgages tend to follow the yield on the 10-year Treasury bond and
are influenced by actions taken by the Federal Reserve to raise — or lower —
rates. Work with a loan officer who understands how rates are behaving and can
help you pounce after a news event has pushed rates down.
finding a lender, the three things most important things are: having trust, a
commitment to service and communication,” says Kerry Wirth, chief operating
officer of Waterstone
it appears that the Fed is getting ready to hike rates, you may want to make
your move quickly — to beat the increase.
By Rachel Witkowski – To view
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