It’s a little bit mixed up this week. Snow was falling in the South, and it was raining in parts of the North. One thing that is for sure is that mortgage rates have fallen again. This is awesome news for homeowners who haven’t refinanced since the rates were in the 6-7% range. Here are some tips for preparing to check on refinancing options.


  1. Check your credit report.
    Once a year you are able to pull your reports from each of the credit reporting agencies. Find out where you are at with your credit score. If it is “iffy”, take about three to six months to prepare and you can actually improve your credit score enough to get the lowest interest rate possible. Even a couple months will help you out.
    It might require making some very uncomfortable adjustments right now, but if you can save a few hundred dollars a month on your refinanced mortgage, you will reap the benefits soon enough.

  2. Don’t overlook other fees.
    Interest rates are not the only thing to consider. Lenders have their own fees so be sure you are getting a complete picture of your options with the lenders you are considering. Avoid shopping with only one lender. If you can, get two or three quotes and find out what’s out there.

  3. Refinance only the portion of the mortgage that is due.
    Some people get themselves in more debt and restart themselves back at a brand new 30 year mortgage, using the additional value in the refinance to purchase more possessions or pay off some debt.

    Keep in mind that even if you use it to pay off debt, you are taking, for example, a credit card that would normally take you three to five years to pay off and putting it in your mortgage to pay off in 30 years.

    You may want to seek help of a financial advisor to help you with some of your refinancing decisions.

  4. Know the true value of your home.
    If nothing else, the last ten years of an extremely volatile home market has taught us to pay attention to values of homes versus loan financing. If you are one of the lucky few whose home has increased in value, you are in a good position to refinance and even pay your home off much quicker than originally planned. This is why financing only your remaining mortgage is important. Imagine having absolutely no mortgage in ten or fifteen years! That is definitely worth not trying to finance a new boat or car in with a new big mortgage.

 With recent interest rates falling below 4%, homeowners who have been careful with their credit can realize some significant savings. If you do not have financial goals in place, now is a great time to do that so you can make the best refinancing decision possible.