In the current real estate market, it can be hard to find the cheapest mortgage refinance rates. Though many borrowers are struggling to qualify to purchase a home, now is an excellent time for current homeowners to get a good deal on a mortgage loan refinance. With the dearth of borrowers who qualify for new mortgage loan financing, lenders are offering sweeter deals on mortgage refinance rates for current borrowers.
Reasons to Refinance
Homeowners refinance their mortgages for a variety of reasons. Sometimes, homeowners are having trouble affording monthly payments, and look for the cheapest mortgage refinance rates to lower their monthly payments and give them the ability to remain in their homes without risk of foreclosure. Other homeowners simply want to save money on monthly payments to free up income for other expenses. Finally, some homeowners may want to shorten the term of the loan to save money on interest over the life of the loan. In all of these scenarios, finding the cheapest mortgage refinance rates will help homeowners meet these goals.
How to Get the Best Rates
The cheapest mortgage refinance rates are available to homeowners who have kept current on their mortgage payments and who have had steady income with the same employer for at least one year. Lenders offer the best rates to these homeowners because they represent little risk of default to the lender. Since a home loan refinance interest rate is dependent on the level of risk assumed by the lender, the lender will give you the best possible rate if the lender perceives that you present little risk of defaulting on the loan.
Less-Than-Perfect Credit
If you have less-than-perfect credit, a few late house payments, or are unable to show a steady work history, you still may qualify for a home loan refinance. Generally, though the cheapest mortgage refinance rates are available to borrowers with good credit and income documentation, mortgage loan refinance may be a viable option for borrowers with a less-than-perfect credit and income profile. This is particularly true for borrowers who may be stuck in an adjustable rate mortgage that keeps adjusting to higher and higher rates, making these homeowners unable to afford their monthly payments. Refinancing to a fixed rate home loan may be the best solution in this situation.
Many Refinance Options Exist
Whatever credit and income situation you may find yourself in, the best way to get the cheapest mortgage refinance for your situation is to have ready documentation of your credit, income and home loan payment history. Because there are so many home loan products on the market, chances are there is a lender who has a loan product to match your mortgage refinance needs.
Source: http://www.bestrefinanceratesmortgage.net/2011/05/getting-cheapest-mortgage-refinance.html
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