With mortgage loan rates at record lows its no surprise that mortgage refinancing is the talk of the industry. While some may be able to turn this into huge savings, that is not true for every borrower. The last thing you want to do is get taken advantage of with a bad deal. There are several things you should know about the mortgage refinancing process before putting in an application.
If the mortgage interest rate is at least one percentage point lower than your current one, mortgage refinancing will likely work in your favor. It’s still important to analyze your financial position to be sure, but it’s worth considering under these circumstances. Also consider the fees associated with a mortgage refinance. The higher the fee, the more it will cut into any savings you get. You need to make sure the fees are low enough that you will earn that money back in a reasonable amount of time, usually a few years.
Be aware of the rejection rates for mortgage refinancing. Through the first months of 2008 only slightly more than half turned into loans. That means about half of the applicants took the time and money and ultimately stayed in the same position they were in before. The criteria for mortgage refinancing is getting stricter as the months go on so the number of rejected applications will likely only increase.
It has long been accepted that a great FICO score to have for refinancing is 720 but this is no longer true. Your credit score is everything when it comes to refinancing your home mortgage. Currently the lowest rates are available only to those with a 740 FICO or higher.
We have listed below articles that may help you with deciding on what kind of mortgage is right for you. You can also check Today’s Mortgage Rates
