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Home Refinancing At Low Cost

Both mortgage refinancing and new home loans can vary greatly in cost, so here are some tips on finding low cost financing.  Whether you are in the market to purchase a home or you are planning a mortgage refinance, you will want to know how to get low cost financing.   

One way to get the best low cost financing when you are looking for a mortgage refinance or new home loan is to have a good credit history and score, and be able to show that you have assets of value.  You will need documentation that verifies your income and employment history to give to the lender.  Also collect your past 2-3 months bank statements, paycheck stubs, credit reports and even past 2-3 years income tax returns.  These records will be needed to help determine if you can afford the loan and verify that you will be worth the risk to the lender.  

Banks and other mortgage lenders are competing for customers and would like to have you take out your mortgage loan with them, provided you don’t have bad credit.  This competition is in your favor because it means that they will offer low rates and other incentives in order to get your business.  One of the best ways to get low cost financing is to take some time and shop around.  As you do this, you should let the loan officers you are working with know that you are looking at other loan products with other lenders.  It may take a little work, but you will find that even a slightly lower interest rate can compute to huge savings over the 30 years of the life of a typical home loan. 

If your credit score is not where you want it to be, you should not despair.  There are bad credit mortgages that are available today with reasonably low cost financing.  Banks are competing for every customer they can get, so even though your interest rates won't be as low as with conventional loans, they may still be within your budget range.   

The most accurate way to compare loans at different lending institutions is to compare the APR that the different lenders quote.  Don't try to compare one lender's simple interest rate with another lender's APR.  The APR takes into account the closing costs, points, and fees, so it is a much better indicator of the actual cost of the loan.  Now is a great time to get a mortgage refinance or a home loan because interest rates are low and competition is high.  Remember to check with your current lender if you are thinking about mortgage refinancing.  They may be able to do a streamlined loan that doesn't include any closing costs because they want to keep you as a customer.