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Mortgage refinancing rates are still very low (some 15 year refi rates are close to 2% and some 30 year rates are below 3% as you can see here), but because these rates depend on an individual’s personal financial situation, there is no single standard rate for refinancing. However, there are things people can do to make sure they get the lowest possible rates. Here’s what the experts say is their top tips for getting the lowest mortgage refinance rates.
Compare the rates offered by 3 to 5 lenders
Comparing three to five lender loan estimates could save you money at the closing table and over the life of your loan with a lower interest rate, says Denny Ceizyk, senior writer at Loan tree. “See what other lenders in your area are offering,” adds Greg McBride, chief financial analyst at The bank rate. You can find the best mortgage refinance rates in your area here. “Be sure to read the fine print if you are comparing rates online, the lowest rates offered often come with mortgage points, a minimum loan amount or a certain amount of equity,” says Ceizyk. .
Consider whether it makes sense to buy points
You pay points up front to reduce your interest rate. But they are often expensive and can take years to recover. Use this calculator to see if purchasing points makes sense to you.
Boost Your Credit Score
“Generally, the higher the score, the better the rate. For example, according to recent data from LendingTree, borrowers with credit scores of 760 or higher were offered an average APR 16 basis points lower than the average rate of borrowers with scores between 680 and 719, ” explains Jacob Channel, senior economist at Loan Tree. Some of the best ways to improve your credit score include paying bills on time, catching up on overdue accounts, paying off account balances, and limiting how often you apply for new accounts.
Know why you are refinancing
Ceizyk says it is wise to decide on your refinancing goal before you complete an application. “You will usually get the lowest interest rate if you just lower your monthly payment. If you use equity to get extra cash for home renovations or debt consolidation, you can expect to pay a higher interest rate than if you cut the rate or the term of your current mortgage, ”explains Ceizyk. You can find the best mortgage refinance rates in your area here.
Shorten the term of the loan
Getting a short-term loan can also help. “Typically, shorter-term refinance loans offer better rates than longer-term loans. Keep in mind, however, that shorter loan terms usually mean higher monthly loan payments, ”Channel explains.
Understand that it’s not just about prices
Don’t take a narrow view and focus only on the interest rate. “Also consider any fees and points,” says McBride. These can include origination fees, appraisal fees, title insurance fees, credit report fees, and registration fees, as some fees can be expected when refinancing a loan. mortgage.