Home Refinancing Rates – How to obtain the Lowest Refinancing Rates
When refinancing your home, you clearly want to obtain a lower interest rate than the one attached to your current loan. However, many people make the mistake of not preparing ahead of time before applying for a refinance mortgage loan. In order to obtain the lowest home refinancing rates, you should make sure of a few things before applying.
1) Be patient. There are major delays in refinancing loans right now. Many homeowners are applying for refi loans and the lenders are very backed up. Some loans can take as long as six months to go by. Be patient, and don’t get bothered by minor increases in the current rates because once your refi goes by, your rate will most likely be considerably lower than the rate on your old loan.
2) Credit score. Good or already great credit is no longer enough to obtain the best home refinancing rates. Today, you need stellar credit. A score of 720 or higher should be good enough to get you the best rates. Check your score regularly and make sure you take all the necessary steps to get and keep your credit score over the 720 mark. Pay down your credit card balances and pay off other loans if possible. Hiring a credit counselor may not be a bad investment if you need the help.
3) You will not be offered the lowest home refinancing interest rates unless you have good equity in your home. You need at the minimum 20% equity. If you don’t have it in addition, consider making a large payment to get your balance down low enough to get it. Of course, you need to weigh the loss of liquid assets against the advantages of the low interest rate to decide if this is a good idea financially.