Many people know that now is a great time to refinance your home loan, with mortgage rates still at their lowest in many decades. And those with good credit and with loans in good standing can certainly take advantage of these rates. Still, there are some guidelines to getting the most out of the process; these refinancing tips will help ensure the best for your new mortgage.
Refinance & Save
Here are the five most important refinancing tips for your mortgage:
- Shop around. Rates vary from lender to lender, so make sure you are locking in the best possible rate. Some lenders in the same city can vary, as much as a full percentage point, so it’s wise to do your research.
- Figure out whether it is worth it. If you already have a fairly low interest rate on your mortgage, it may not make much sense to refinance even at a slightly lower rate, since there are fees and closing costs associated with the process that can add up in a hurry. Do the math and make sure the lower rate offsets these costs.
- Beware of ‘no closing cost’ deals. All refinancings come with a fee, whether it is billed as a closing cost or not. Don’t be fooled into thinking you’ll be getting a free lunch with a no closing cost refinancing; as usual, there is no such thing.
- Take advantage of ‘cash in’ mortgages. This is one of the top refinancing tips if you can manage it: negotiating a smaller mortgage at a lower rate, and bringing some cash to the table to offset the difference. This deal will help to free up your financial future and get your mortgage paid off sooner, if you have some of the cash on hand to make the deal happen.
- Confirm that your rate is locked in. Many refinancing deals have variable rate clauses buried in the contracts somewhere, so it is always prudent to have a mortgage attorney to go over the documents and ensure that your low rate is locked in.