If you are looking into refinancing your mortgage, there are several steps you can take to get a better mortgage rate. You will hear that comparison shopping is your best bet on getting a great new rate, but there are alternative measures you can take as well!
Here are two of those methods:
1. Boost Your Credit Score
Mortgage lenders utilize your credit score to determine how much of a risk you are for a mortgage loan. Your credit score is derived from your credit reports maintained by the three credit reporting agencies: Equifax, Experian, and Trans Union. The first step in boosting your credit score is to request copies of your credit reports and carefully check for any errors or negative information.
Your credit score relies heavily on your payment history; 35% is based solely on making timely payments to your existing creditors. If you have credit problems in your past be upfront with your lender and tell them why the payments were late. Any documentation you can provide to support your history will help your cause.
2. Consider Buying Your Mortgage Rate Down By Paying Points
Most mortgage lenders will lower your mortgage rate in exchange for points. A “point” is one percent of your mortgage rate in the form of prepaid interest due at closing. The more points you pay upfront, the more your interest rate goes down. When deciding if you will benefit from paying points determine how long it will take you to recoup the expense from the amount you are saving with a lower mortgage payment. This will tell you the “break even point” and if paying this fee makes sense for you.
For more tips on getting the most out of your refinancing efforts please call our office at 604-259-1486 and we will be happy to assist you in getting you what YOU need!
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