Getting the best interest rates when refinancing a mortgage is not that hard to do. Always keep in mind though that regardless of where you get your refinancing from there will be some things that change the actual interest rates you will get. Here are the major forces behind what mortgage rates are going to be available to you.

Your credit rating, mortgage repayment history, and financial situation will play a key role in determining whether or not you qualify for the lowest rates possible. If you have a stable employment history, low debt to income ratio, and a decent credit history, you may be able to get the absolute lowest interest rates available. However, things like late or missing payments and a shaky job history may hurt your chances of getting the best mortgage rates possible. This does not mean that refinancing a mortgage is not a good decision it just means that getting that qualifying for the absolute lowest interest rates will be impossible.

The Mortgage Lender or Bank.
Different mortgage lenders and banks have different mortgage interest rates. This is due to many things like overhead and the bulk rate that they get from their financial providers. Also, if you have a bad credit or mortgage repayment history, the interest rates extended to you may be higher to offset the risks of you not paying it back. This can be as much as an additional 1% - 2% which really adds up to a lot of money over the course of a 30 year home loan. Also, some banks and mortgage lenders just charge more as a bottom line number, to increase overall profits. While everything is always negotiable, the bottom line is that lenders and banks are in it for profits and interest rates are often one of the many ways they do profit. That margin though is different at each lender or bank.

Market Conditions.
As the housing market changes, and the Federal Reserve makes decisions, things change. When the market worsens, so do things for people looking for refinancing or buying a home. When the Federal Reserve decides to increase rates tat banks and lenders borrow at, the interest rates become higher for all homeowners looking to refinance. Also, the supply and demand factor comes into play. When there is high demand for housing, interest rates can increase. The market is slow though lately, and low interest rates have been in play for almost all of 2009. However, especially lately, another reason interest rates have been low is the Federal Reserve. Government stimulus programs designed to keep interest rates low have been doing their jobs.

While finding the best interest rates and refinancing deal is ultimately on the homeowner, these are some things that will effect interest rates for everyone. Getting a mortgage refinancing is not hard or impossible to do and the more research you do before, the better.

-M Petrone

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