According to Freddie Mac, homeowners who refinanced a $200,000 mortgage in the first quarter of 2015 have already saved up thousands of dollars in their payments. However, many other people have not taken advantage of the new lower interest rates. If you believe that refinancing is worthwhile, then have a look at the following ways to assist you in getting a great deal which will help you reduce your monthly bills and total mortgage costs.
Strengthen your Credit
You must ensure that all your bills are paid on time, most importantly, your monthly mortgage payments. Doing this would ensure that you have a solid credit score when you apply for a refinance loan. Furthermore, refrain from opening any other lines of credit or apply for any credit cards. Doing this would only lower your credit score. Additionally, if you have massive amounts of credit card or any other debt, paying that off will help increase your score.
Evaluate the Short-Term Loan option
Refinancing your 30-year loan into a shorter 15 or even 20-year loan will give the possibility of having a lower interest rate on your mortgage. According to Bankrate’s weekly survey, throughout 2018, the rates on the 15-year fixed-rate mortgage were 0.60% lower than rates on 30-year fixed-rate loans. However, a shorter-term loan will increase your monthly mortgage payments. Moreover, you can also consider refinancing your existing fixed-rate home loan into an Adjustable-rate mortgage or ARM. This gives you the benefit of a lower interest rate, at least during the initial period of the loan.
We at Texas Trust Home Loans, offer competitive rates for a 15 year or a 20-year loan. We also provide the best ARM rates.
Explore your Options
Shopping with more than one lender may be the most beneficial way to get the best refinance rates. Before that, it is advisable to check with your current lender whether they are willing to offer you a better rate or not. They have an incentive to keep your business. Hence it is likely they might provide you with a good refinance interest rate.
Furthermore, check with local lenders, including smaller banks and credit unions. It is possible that they might offer you an attractive rate to win you over as their customer.
One of the most important things is to check with lenders is about the closing fees and administrative costs, so that you can analyze whether the refinance will save you money or not.
Get your Timing Right
Mortgage rates are volatile and can fluctuate. Hence it is imperative to get your timing right. Rates on 30-year mortgages are heavily impacted by actions taken by the Federal Reserve to raise or lower the rates.
It is essential to work with a loan officer who has an understanding of how rates are behaving and can assist you in the best possible way.
We at Texas Trust Home Loans, endeavor to help you in the best possible way. You can visit our website www.texastrustloans.com to get the best refinance rates and feel free to ask us any questions, and we will be more than happy to help.