Top 3 Ways To Get the Lowest Mortgage Refinance Rates
Updated: Jan 16
If you are looking to refinance your mortgage, then you probably are looking to get the lowest possible home mortgage refinance rates. This is very understandable. However, before you hit the ground running shopping for low rates, you should make clear your objectives, prepare your finances if you are to stand a chance of even qualifying for the low rates. You should determine the best loan package that meets your financial goals before you look for the low ad competitive rates to take advantage of. With that said, the following are some tips that will have you getting the lowest refinance rate available.
Improve your credit score
Ideally, if you have a credit score that is equal to or higher than 740, you should be in the best position to get a conventional loan. However, the minimum credit score requirement for many lenders falls between 620 and 640. For these credit scores however, you will pay a higher rate than if you had a 740 and above credit score.
Clear or lower your debt
Paying your credit card balance, and ensuring that you pay your bills on time can greatly reduce your debt to income ratio, which will in turn improve our chances of qualifying for the low mortgage rate. You should not make major purchases such as buying a car or fill out multiple credit applications prior to refinancing as these will damage your credit profile.
You may have a high credit score, but still be given high interest rates or denied refinancing altogether if you have a high debt to income ratio.
Increase your home equity
Have in mind that your loan to value ratio of the property you own and your credit score have a very high impact on the rate of refinance that you are subjected to than the slight shifts in the mortgage rates (average). Having a high loan-to-value or a low credit score can make you subject to high interest rates.
However, a quick tip, if you are going under with your mortgage, your best option would be a Home Affordable Refinance Program.