Thinking about refinancing your mortgage? Need to get a more affordable mortgage? Right now, interest rates are near their all time lows, but, will you be able to get them? Here are 3 factors which will determine what interest rate is offered to you.

-Your Personal Credit Rating and History.
Your credit rating will play a huge factor in figuring out how low of an interest rate you will be able to get. Besides your credit score determining if you will even get approved, it will play a role in establishing the loans terms, conditions, and limits.

One of the best things you can do to make sure everything is as good as it can be is to request a free credit report from each of the major 3 agencies. You are allowed a yearly free copy, so this will cost you nothing. Once you get your report, take your time and go over every single detail of it. Check for any mistakes, debts not removed, or inaccuracies. Even little mistakes can easily disqualify a homeowner from getting approved, or a beneficial refinancing at all.

Homeowners are often surprised about the information they find on their report. Many homeowners do in fact find errors, and paid off debts, still lingering, and negatively effecting, their credit rating. This step of double checking can easily save you a lot of money, or get you approved in the first place and save you time and heartache.

-The Homeowners Mortgage Payment History.
Regardless of the homeowners credit rating, one of the biggest factors is the history of home loan payments. Mortgage lenders and banks are much more likely to approve a homeowner with bad credit, but who always pays their mortgage. Homeowners who have made all of their payments have an established history of making their mortgage a priority in their life, and banks and lenders will see this.

If you have been able to make additional payments, or larger ones than required, the chances of you getting approved, and even lower interest rates, increases. A perfect payment history really has a lot of pull when deciding if you will get approved, and is how most homeowners with bad credit get a beneficial refinancing for their home.

-The Remaining Balance on Your Existing Mortgage.
The more equity you have in your home, the better the chances are of getting approved for mortgage refinancing at the lowest interest rates possible. Generally, homeowners need around 20% equity to be able to take advantage of the absolute lowest mortgage rates. However, this is not true all of the time. Each homeowners situation is unique, and each situation will determine the homeowners actual rate, and approval.

The less money you owe on your home loan, the easier the entire process will be. Homeowners will face less scrutiny and hassles the more equity they have. Banks and mortgage lenders are hesitant to help homeowners who have barely anything invested in their home, as they are more likely to default.

-M Petrone

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