It’s Not Magic, But These 3 Tricks Will Make for a Smoother Refinance

It’s Not Magic, But These 3 Tricks Will Make for a Smoother Refinance

Refinancing your existing mortgage loan to one with a lower interest rate can shave hundreds of dollars off your monthly payment. The key, of course, is to lower your rate by enough to realize these big savings.

If you’re ready to lower the rate on your loan, here are three key tips to make the process run as smoothly as possible.

1. Check Your Credit A refinance won’t make financial sense if you don’t lower your interest rate by enough. That’s the source of your savings, dropping your rate from a higher figure to a lower one. Lenders, though, won’t approve you for a lower rate if your credit isn’t strong. Before applying for a refinance, order free copies of your three credit reports from and review them. If you see plenty of late or missed payments on these reports? Lenders might not be ready to drop your interest rate.

2. Check Your Credit Score Your three-digit FICO credit score is compiled from the information in your credit reports. It gives lenders a snapshot of how well you’ve paid your bills and managed your credit. If you want to refinance, you need a high credit score. If your score is low, lenders won’t approve you for a new loan with a lower interest rate. Most lenders consider FICO scores of 740 or higher to be excellent ones. But you might see a big enough drop in your interest rate if your FICO score is 700 or higher.

3. Gather Your Papers You’ll need to prove your income when applying for a refinance. To do this, you’ll provide lenders copies of your last two months of bank account statements, last two years of federal tax returns, two most recent paycheck stubs and most recent W-2 statements. To make the process move faster, gather up this paperwork at the beginning stages of the refinance.

We have a list of outstanding lenders with whom our clients have had excellent experiences. Contact us for recommendations.

The information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
Copyright © HomeActions, LLC All rights reserved.

Related Posts

No Comments

Leave a Comment

Your email address will not be published.