How to Find the Lowest Rates to Refinance My House
With a little bit of research, a borrower can save money on his or her mortgage refinance by shopping around for the best interest rate, as well as the cheapest closing costs. Armed with some basic knowledge of the mortgage industry, a savvy mortgage-refinance shopper knows what questions to ask to get the best deal.
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Instructions
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Ask your current lender for the interest rate and closing costs associated with refinancing your mortgage. Additionally, ask for a copy of the Good Faith Estimate and Truth in Lending Statement associated with the refinance.
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Ask two other lenders to provide you with the interest rate, as well as the Good Faith Estimate and Truth in Lending Statement for a mortgage refinance. Most Internet quotes will require the disclosure of your Social Security number; in order to protect your privacy and limit the checks on your credit, ask for all quotes over the phone.
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Compare the offers from each lender. Note the total closing costs on the Good Faith Estimate. The lender with the lowest closing costs may or may not have the best interest rate. Many times, lenders charge "points" to purchase a lower interest rate, which drives up the closing costs. The Good Faith Estimate also lists the interest rate and the lock period for the rate.
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Note the APR (annual percentage rate) as listed on the Truth in Lending Statement. The APR represents the total cost of the mortgage for a full year, including both the closing costs and the interest rate. The loan with the lowest APR is the cheapest overall mortgage.
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Choose the lender with the lowest APR. However, if this lender is not your preferred lender for any reason, ask your preferred lender to match or beat the best quote found. Many times, the mortgage lender will at least match the best quote in order to keep your business.
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Tips & Warnings
To get an accurate quote, the mortgage lender will need your credit score. To limit credit checks and their negative impact on your credit score, provide your lender with a copy of your credit report and score. Purchase your credit report and score through a website such as AnnualCreditReport.com. While you can receive one free credit report per year, you will have to pay to get a credit score.
Interest rates can and often do change daily, if not more than once a day. An interest rate is not guaranteed until the rate is locked. While one lender may have the best interest rate one day, he may not the next. Keep track of your information and be prepared for it to change the next business day.
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