November 4, 2012
Are you struggling to make your mortgage payments and you’re worried about losing your home to a forced foreclosure? Did you check the current mortgage interest rates? If the rates are low enough, why don’t you consider a mortgage refinance? Well, according to recent reports, the mortgage rates are going through their record low levels and so this is perhaps the best time to take out a new loan. Although the rates on the mortgage loans are pretty low for an extended period of time, you can still be able to further grab low refinance mortgage interest rates by following certain points. If you’re not aware of them, here are some that you should consider in order to make the entire process successful.
Augment your credit score: Do you have a good credit score that speaks in your favor? Well, credit score is the 3-digit figure that speaks a lot about your financial worth. A good credit score will always mean better financial management in the past and a bad credit score will mean just the opposite. Therefore, before you take out a refinance mortgage loan, you should always augment your score so that you don’t have to be considered as a risky borrower. Go for immediate credit repair before taking out a refinance mortgage loan.
Lower your DTI ratio: Though you’ve already taken out the first mortgage loan, you have to make sure that the DTI ratio or the Debt-to-Income ratio is not too high. This is nothing but the ratio between what you earn and the total debt payments that you need to make in a month. The higher the DTI ratio is, the higher risk you’ll pose as a borrower and therefore you’ll be offered high rates on the mortgage loans.
Save enough money for the down payment: As you already have a mortgage loan, you must be aware of the fact that you need to make a down payment before you take out the loan. Most lenders will ask for a 20% down payment, which means that you have to pay down 20% of the total loan amount. Did you save enough money so as to be able to pay down the exact amount? If answered no, you should wait to refinance your home loan.
Shop around before getting the loan: You should also shop around and get multiple quotes from multiple lenders so that you’re able to choose the best loan in the market. As there is too much competition, you will be offered a plethora of mortgage options and so you need to make sure that you choose the best one in the market.
So, instead of sitting back and crying over your mortgage defaults, take solid steps to opt for a mortgage refinance. Follow the above mentioned points if you want to get low refinance mortgage rates that can even translate to low and reasonable monthly payments.