Things to Remember When Comparing Mortgage Refinance Rates

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Taking out a mortgage loan does have its risks.  It’s not something you can get, bring home and then forget about.  To truly maximize the kind of deal you get over the long term, you’ll have to be able to watch out for fluctuations in mortgage loan rates, which, fortunately or unfortunately, change incrementally every day.  In some cases, you might even see several fluctuations in one day.  To find the best rates possible for your loan, learn to compare mortgage refinance rates.  Here’s how:

Get a copy of your credit report.
Even without a credit report, you could always get mortgage rate quotes.  However, to truly get the exact loan rate, your lender will require you to provide your credit report.  If you want the exact figures, get a copy of your report first before you start shopping for mortgage refinance rates.

Be careful of what you see.
Most consumers are reeled in by clever advertising promoting low interest rates.  However, not every consumer will probably land this rate because their qualifications vary.  Furthermore, some companies’ advertised rates may be locked in only for about 15 days.  Unless you could close within that period, it may not be worthwhile to consider comparing these rates at all.

Furthermore, if you try to compare mortgage refinance rates without having your credit report run, always study the pre-approval estimate terms of the loan carefully.  You do not want any surprises in the future, particularly if they are disadvantageous to your finances.

Ask for all fees involved.
Obtaining a mortgage loan refinanced means you will have to pay for certain fees.  If you’re dealing with a reliable lender, they will be willing to give you all the information you need.  Others, unfortunately, will simply withhold that information.  

Ask how often the lender re-calculates the outstanding interest.
The best way to treat a mortgage loan – or any loan for that matter – is to get out of it as fast as you can.  This is why it’s always a good decision to have a personal payment plan set up before you take out a loan.  A bi-monthly payment scheme, for example, will help you pay off the loan earlier and avoid additional charges.  

Check with your lender to determine how often they make loan recalculations.  Yearly recalculations are disadvantageous to you, so when comparing mortgage refinance rates, look for companies that recalculate frequently – daily if you can find them or at the very least, monthly.

Why is this important?  In the future, you could have the opportunity to get a good amount of cash from a bonus or a promotion and would like to use that to pay off your loan.  If your lender does not recalculate often, you could be stuck on the old interest rates, regardless of how much money you put in.  If your lender recalculates often, you could start paying for your loan at newer, lower interest rates.

Lock it in.
Take advantage of a good mortgage refinance rate by having it locked in by your lender.  A lock period is the period of time in which the current or agreed-upon rate is honored by the lender.  Meaning, the rate will stay that way within a specific amount of time.  This can range from a minimum of 15 days to a maximum of 60 days.  

The lock-in period you choose will of course depend on how long you want to keep the interest rate and on how much you can afford to pay.  Shorter lock periods will have more affordable mortgage rates while longer periods will charge higher rates.  When comparing mortgage refinance rates, try to compare the lock-in periods as well.

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