When you refinance you’re hoping you get the lowest mortgage refinance rates around, here are a few tips on how to get those rates.
If you’re considering refinancing your mortgage, you are likely on the edge of your seat wondering if you landed the lowest possible mortgage refinance rates. Before you start shopping for the lowest rates, there are some things that you should take care of first. You need to establish your objectives and prepare your financial situation to improve your chances of qualifying for the lowest interest rate possible.
- Raising your credit score
A credit score of 740 or higher puts borrowers in the best tier for a conventional loan. Most lenders require a minimum score of 620 to 640, but you’ll pay a higher mortgage rate unless your score is above that magic 740 score.
- Save cash for closing costs
Closing costs average about 2 percent of the home’s loan amount. You can save up and pay in cash or you can use your home equity to roll over these costs. Another option that some lenders offer is to pay a higher interest for a “lender credit” to cover these costs. This will help keep your cash to close amount lower.
- Lower your debt
One of the reasons that your credit score may be low is because you may have accumulated some debt over the years, and have not been yet paid it down. Lowering your debt is a good sign to lenders that you are taking financial responsibility and could positively affect your credit score.
Don’t let these three factors get in the way of the lowest mortgage refinance rates. Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.