5 Tips on How to Get The Best Mortgage Refinance Rates

How to get the best mortgage refinance rates may well be a question on the minds of lots of people right now. After all, millions of Americans have been hit hard by the Covid-19 pandemic, especially since the U.S. government has fumbled its response much worse than most other countries around the world. As a result, there is pretty much no place around the country in which people are not struggling more than they used to. And while the people who really suffer the most from the fallout of the pandemic are those who have to worry about putting food on the table for their families, the complete list of victims is much longer than that.

One example of other people who are struggling now because of Covid-19 is those who need to pay down a mortgage. Since the past few months have blown a hole in the financing plans of most Americans, as people are being fired or furloughed or are simply unable to make the same amount of money as before, lots of people are undoubtedly wondering how to go about the mortgage that they still need to pay on top of it all.

One of the most obvious options for people who are struggling with mortgage payments is to go for a mortgage refinancing deal. However, it is important to know the ins and outs of how these things work, because otherwise, you may even find yourself paying more than you otherwise would have. So, better take the time to check out this article on the 5 Tips on How to Get the Best Mortgage Refinance Rates!

1. Double-check your credit report. The best way to start if you are looking for how to get the best mortgage refinance rates is your credit report. Why? Because you would be surprised how often there are errors in it that drag down your credit score, which, in turn, affects your chances at a good refinancing deal.

Since you want to make sure that the refinancing deal you get is as beneficial to you as possible, first make sure that the information on your credit report is really accurate. It can get so bad that credit reports include state tax liens or charge-offs that really have no business being there.

But the sad truth is, if you fail to catch these mistakes, then they will just stick to you until you do. Even if you think your credit score is pretty good, finding mistakes can easily still prop it up by a few dozen points – which can, then, save you a bunch of money on monthly refinancing payments, too.

2. Push down your card balance. Yes, how to get the best mortgage refinance rates also depends on how you use your card balance. It may be more easily said than done – you are still struggling with the effects of the pandemic, after all – but if you can, try to stay below 25 percent of the amount of credit that is available to you. Because as it turns out, using all your available credit, even if you always make your payments on time, is actually not good for your credit score.

The keyword here is the so-called “credit utilization ratio”. The lower this ratio is, the lower usually the interest rate that you need to pay on your refinancing rates because you are then considered a less risky investment.

3. Having consumer credit helps. It is only understandable that you want to get rid of your consumer credit as soon as possible. The thing is, though, that if you want the best mortgage refinance rates, having a small amount of consumer credit can actually help you out by a lot. Important here is not how much of your consumer credit you are using, but that you are using it at all. This way, you are showing yourself to be a responsible user of credit, which will quickly reflect on your credit score.

4. No cost – no deal. Stay away from so-called “no-cost” loans. At the end of the day, if you are not getting money from a friend or family member, then no-cost loans are a fairytale. Remember that there is more than one way to charge you for a loan, and the lender will always get paid for lending out money to you. Otherwise, why would they do it? If you are not sure where a lender will get paid from when giving you a loan, then better stay clear of that lender altogether.

5. Tweak the loan term. Generally speaking, a great way to get the best mortgage refinance rate is to go for a shorter repayment period. Especially if you are already some years into paying off your mortgage, simply going back to its original length with your refinancing loan is not going to help you much at all. It will also do nothing for your interest rate. Instead, try to see what happens to your interest rate when you opt for a shorter loan term. This way, you could save both on your interest rate, and on your interest payments overall, as you will only need to pay interest for a shorter period of time.

If you follow these 5 Tips on How to Get The Best Mortgage Refinance Rates, you should be able to take a few percentage points out of your interest payments at least. Stay healthy, and be diligent when you get your mortgage refinanced!