If you’re in the market to refinance your home loan and are shopping for the best refinance rates you’ll want to avoid paying unnecessary fees for your next home loan. Mortgage rates today are at historical lows, below four percent for some homeowners. How do you get today’s mortgage rates like this without paying points or unnecessary fees? Here are several of my best tips before you refi to help you avoid paying too much for your next home loan.
Get Lower Mortgage Rates Today
If you’re refinance rate shopping you might be disappointed to find that the interest rates quoted to you are not what lenders are advertising. It used to be that refinance rates below four percent were simply teaser rates used to bait you into an overpriced home loan; however, today’s best refinance rates for a 30 year, fixed-rate home loan have dipped below four percent for some people.
What does that mean for some homeowners? Despite what you see on television not everyone will qualify for four, even five percent. Mortgage rates today depend on several factors including your credit score. See this chart to understand how your credit affects the best refinance rates you’ll get on your mortgage refi:
Aside from your loan-to-value ratio the number one factor affecting the interest rate you’re going to get at the end of the day is your credit score. Fortunately, there are steps you can take to improve your credit score before mortgage refinancing. The first step in getting the lowest mortgage rates today is to check your credit reports for errors. You can do this and get a free credit score when you check out my free underground mortgage videos or visit the website AnnualCreditReport.com. (They’ll charge you for your credit score though)
If you find mistakes in your credit reports it’s important to get them corrected before submitting your mortgage refinance application. You can also give your credit score a shot in the arm by paying down the balances on your credit cards and avoid opening any new accounts.
Clean Up Your Credit Before Mortgage Refinancing
Once you’re satisfied with the sate of your credit it’s not hard getting low mortgage rates today; however, getting a good deal comes down to how much you’re paying at closing for the new home loan. Assuming you’re mortgage refinancing to get a lower payment amount you’ll have to recoup your origination fee and closing costs before benefiting from low mortgage rates today. The more you pay at closing the longer it’s going to take to break even, plus you’ll have less cash in your pocket.
There are a number of junk fees you’ll want to avoid when comparing mortgage rates today. If you’re being charged a rate lock fee for example this is a sure sign that you’re dealing with a disreputable originator. Charging to lock your interest rate is just one of the ways originators overcharge that you’ll want to avoid on your next home loan.
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You can learn more about paying less for your mortgage refinance by avoiding unnecessary points and lender junk fees by checking out my free Underground Mortgage Videos.
- Free Underground Mortgage Videos