When refinancing, most homeowners do not have any idea if they are getting a competitive mortgage rate or not. There are a lot of things that go into getting the best mortgage refinance rate available, this is not always easy, but it is definitely worth the time and money it takes to get the best rate.
Many people see mortgage rates on TV and assume that those are the rates that are guaranteed to them. When they call in, the quote they receive is usually far from the rate that was displayed on the commercial. This is because the mortgage refinance rate that was seen on TV is for super prime borrowers. A super prime borrower is someone that has a credit score that is over a 780 FICO score. This same borrower will have strong assets and can prove a very high income with their tax returns. These rates are also exclusive for refinancing a primary residence where the borrower can also put down a large amount of money, usually a minimum of 20%. Homeowners that do not fit all of these qualities will not be able to get the mortgage refinance rates that were seen on TV or heard on the radio.
In order for a homeowner to receive the most competitive mortgage refinance rates they must first contact a mortgage broker or company that is going to be able to process the loan. They will then take an application and look at the borrowers credit, income and value of the home. If approved the lender will then decided what they can offer and the type of mortgage product that works best for the given situation. The lower the term of the mortgage that the homeowner wants, the lower the mortgage rate will be. Also if a homeowner decides to go with a more risky type of mortgage, like an adjustable rate mortgage, they will receive a lower mortgage rate. There are also bad credit mortgage refinance options for homeowners with less than stellar credit.
Contact mortgage brokers, companies and local banks to see who will offer the best refinance options. If either of them can beat the current rate by a half of a percentage point then it may be time to look into switching over to that company. If they are not able to beat the current rate by that much it is more than likely not going to be worth the time to refinance.