Are you looking to refinance? Want to save money every month? Interest rates are probably lower than when you bought your home, but do you qualify for them? Here are 4 things which have the biggest impact on the mortgage rate you receive:

-Your Credit Rating
Your personal credit score play a huge role in determining your mortgage rates. Credit scores affect your chance of being approved or denied a refinancing, the terms and conditions of the loan, and the interest rate.

Request a free credit report from each of the major 3 reporting agencies every year. Carefully take your time and review every line of these reports for inaccuracies and discrepancies. For example, if a bankruptcy is showing on your rating, yet is over 7 years old, that information should not be coming up in your report. This would be a great example of why knowing and being familiar with your credit report is very important.

Payment history is the biggest factor in determining a credit score. Homeowners who have been making regular, on time, payments, should only have positive gains in their credit rating. Some other things which may be accounted for are how much you owe in debts, how many credit inquiries on your file, your income, and how long your credit history goes back for.

-Your Mortgage Payment History
Refinancing a mortgage with a bad credit score is not impossible, or even as hard, as it seems. Typically, homeowners, regardless of credit, can save money through mortgage refinancing if they have been able to pay every home loan payment on time and in full. Your chances are even better if you have made payments which are more than the minimum required, or earlier than the due date. Mortgage lenders and banks will see that when it comes to your home, you are perfect on payments, and are much less of a risk. This can help you get the approval you need, at good interest rates, even with less than desirable credit.

-The Amount Due on your Current Mortgage
The balance remaining on your existing mortgage, plays a role in determining your mortgage rates. Say you are over 50% paid on your mortgage, with full and on time payment history, you are nearly guaranteed a refinancing opportunity into a lower, money saving, interest rate. Homeowners wishing to refinance a newer home loan will face more questions and scrutiny from mortgage lenders and banks. They will wish to know everything about your current finances, potential plans, and want copies of as many financial documents as possible. This is understandable as the mortgage lender or bank will be facing more financial loss by taking on newer home loans for refinancing.

-The Mortgage Lender
The mortgage lender probably is the second biggest factor in determining your mortgage interest rates. Some of the bigger mortgage lenders and banks have the size, resources, and experience needed to obtain the lowest mortgage rates possible. The big lenders can afford to take on a little more risk, and negotiate a little on the terms, rates, and conditions of the home loan refinancing. Although, without a decent credit history, getting approved for refinancing from the larger companies can be harder, especially for new home loans with little to lose. Smaller companies on the other hand tend to take less chances with their limited funding, and offer extremely competitive rates to qualified homeowners. Your personal situation will determine the best lender for you.

-M Petrone

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