3 Tips for the Best Mortgage Refinancing Experience

2010 may be the year best remembered for the best mortgage refinance rates, but to qualify you have might have to jump through some hoops.  In an effort to reduce foreclosures and loan defaults, mortgage refinance lenders have tightened refinancing guidelines for conforming and jumbo loan products.  Everytime you consider refinancing, there is an opportunity to save money. Sometimes you save money by realizing that mortgage refinancing is not the best financial move for you at this time.

1.  Before  you celebrate, make sure you qualify. Getting a pre-approval solicitation in the mail does not count.  You need a loan approval from the lender signed by the underwriter who has the authoority for the type of loan you using to refinance.  The current refinancing guidelines for FHA, VA anc conventional all require income documentation that proves your debt to income ratio is low enough to qualify.

2. Do the Math!  When considering the best mortgage refinance options you must calculate the savings monthly and then factor in the years you are adding on the loan.  Take your existing mortgage payment and multiply it by the number of months you have left.  Do the same thing with the proposed refinance loan. If the calculator indicates that the new loan will cost you more over the term of the loan, you better think twice and make sure that the monthly saving justify the long term costs.  If you absolutely can’t afford your current payment or if you are planning to move in the next 12-18 months than the long-term saving may not matter.

3. Compare Mortgage Refinance Lenders! You may have a favorite loan officer, but make him or her earn your business each time you do a loan.  In most cases if you let the loan officer know that they are in a competitive situation, they will usually go the “extra mile” to reduce the lending fees and get you approved for the lowest possible mortgage refinance rate.  Don’t forget to find out if you qualify for a no cost mortgage refinance.

Mortgage refinance rates may be at an all-time low, but if you think before you sign and consult with financial advisors you trust, then you just may uncover new opportunities to save yourself thousands of dollars over the life of the loan.  It’s your time and your money, so choose your mortgage refinance lender wisely!