Refinancing online is a great opportunity to find low interest rates. Online mortgage lenders provide information about rates and fees for easy comparisons. However, to find the lowest interest rates, you will need to do more than just surf sites. The following tips will give you the edge in your refinancing search.
Clean Up Your Credit
You make think your credit history is good, but what does your credit report say? Errors on credit reports are not uncommon. Left uncorrected, you will be forced to pay higher interest rates.
So before you begin your application process, request your free credit report from one of the three agencies. If you find any errors, file a consumer dispute with the credit reporting agency. Next, contact the creditor to resolve the error. Your last option is to file an explanation on your credit report.
Compare Closing Costs and Interest Rates
The biggest benefit to refinancing your mortgage online is the ability to compare fees and interest rates. You can save yourself thousands of dollars by searching for the lowest loan costs.
While low loan costs are important, be sure that you are comfortable with the mortgage lender. When dealing with online mortgage lenders, look for multiple ways to contact them and clear information about rates and the application process. If you need further assurance, check the companys reputation with the Better Business Bureau.
Buy A Lower Rate
Paying points for a lower rate on mortgage makes sense if you plan on keeping your home for at least three years. Before you commit, make sure you will save money by comparing your interest savings versus the cost of the points.
Consider An ARM
Adjustable rate mortgages offer lower interest rates with the drawback that they could rise. If you are only planning to be in your home only for a few years, then an ARM could save you money over a traditional mortgage.
Less Time, Less Money
A 15-year mortgage will have a lower interest rate than a 30-year mortgage. You save money with the lower interest rate and the shorter loan period. The downside is higher monthly payments with a short loan.
When choosing to refinance, pick the options that make the most financial sense for you or you and your family.
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