Mortgage payments are a significant chunk of any homeowner’s income; in some cases, it’s the single largest monthly bill that you will pay. What you might not know is, there is actually a way to make those mortgage payments lower. When mortgage rates are low, you can refinance your own mortgage, in order to make more attractive terms for yourself based on the present market. Doing so can be a tricky situation, however. Here are a few tips to make sure you get the best rate for your mortgage refinance.
Improve Your Credit
Maybe when you first got your mortgage, your credit wasn’t so great, so you weren’t able to get the best rate. If you’ve spent the interim years improving your credit, however, then you might be able to get a loan based on your present credit rating. If your credit still isn’t great, then you should focus on lifting it up. Don’t borrow more than you can pay off, keep few credit cards, and pay all bill promptly and in full. It might cut into your finances a bit in the short term, but by improving your credit and getting you a better mortgage rate, it will save you money in the long run.
Shop Around Locally, then Widen the Net
When you’re trying to get a better rate with a refinance, you want to check with the lender who currently holds your mortgage first, and get a baseline quote for your refinance. From there, take that rate around town; if you’re looking for the best mortgage refinance rates in Raleigh, NC, then check around banks in the area, seeing how their refinances compare to your present lender. From there, check the big banks online, seeing how the refinance rates stack up.
Get a Shorter Loan
If your long-term aim is to pay less money overall, then consider getting a shorter loan. The shorter the loan is, the less time the loan has to accrue interest, which means paying less for you. Keep in mind, however, the lower payment refers to the entire payment; because you’ll be paying in less payments, each individual payment will be higher.
The truth is, the market changes. One market will offer you much better rates than another one, and the only way that you’ll be able to know when the best time for you is will be to pay attention. Read financial publications, watch the housing market, and make sure you know it’s the right time before talking to your lender.